We decided to checkout the alternatives after realizing that the price of the Turbo Tax Online product has increased significantly over the years. We selected these three products to try out because they received very high ratings. Having gone through this exercise, it is clear that the products are very good but each has a set of quirks that needs getting used to. Below is a list of quirks we noticed with each product:
Turbo Tax Deluxe - $48.65 (after Fidelity click-through discount):
- Transferring info from previous year Turbo Tax was a breeze.
- Transferring W-2 info from ADP succeeded on the 2nd try - the example shows to put a ‘/’ between the number portion and the 3-letter alphabet portion of Box D, but supplying the info as is (with a space in between) succeeded.
- Trying to transfer another W-2 from Ceridian resulted in a page that asked for user name and password. But, it was not apparent how to get that info. Had to do that one manually.
- After confirming W2 info, it showed a screen about select ‘OTHERCOMP’ in box 14, but going back one screen and coming back resulted in another screen asking whether any of the items in the a list applies to the W2 – confusing…
- Many times, clicking continue button results in no action. Usually, another click got us to the next page. Similarly, when coming back from another tab in the browser, the cursor shows it is active within an single-line edit box, but typing results in nothing getting entered.
- Minor spelling in “wages and income” confirmation screen – “If you have no other information for import, selete Done”
- After entering W-2 income, Turbo Tax provided two choices – Select Specific Topics, or Guide Me Through Income. We chose the first choice.
- Transferring 1099-B from our TD Ameritrade succeeded. This is a very helpful feature. But, the information on equity option trades, margin interest, etc. did not get transferred over. These are classified "supplemental" information, but the info is needed to complete the tax return. This is an area were one could easily miss filing this information.
- The preview feature is very functional - this is a significant improvement compared to last year.
- HSA employer contribution was treated as taxable income and it did not prompt for input on 1099-SA. This resulted in a higher tax figure. We did not get to verify the functionality this year as our health plan this year was not HSA related.
- Charitable contributions allowed using a tool called ItsDeductible. This made determining the value of the articles contributed relatively painless and hopefully accurate. One minor nnuisance was having to enter address information twice if donations were made to the same charity more than once.
- Timeout at 20 minutes is better compared to TaxAct's 10 minutes. Providing this as a configurable option would have been better.
- hile trying to eFile, our CA SDI withholding figure was transferred over from W2 correctly as $693.60. But, since the max is $693.58, Turbo Tax said it was unable to eFile. Manually editing that entry to say $693.58 instead of the rounded value fixed the problem.
TaxAct Ultimate Online Bundle - $16.95:
- Signup was a breeze. But, it asks for the SSN the first time around. This was not required for other products.
- After sign-in, an info screen was sent by email – the recommendation was to print it out, scribble in the password & favorite pets name for future reference.
- Imported everything we entered last year for this evaluation even though we did not use them to file the return last year.
- Timeout is 10 minutes – a 2-minute warning appears after 8 minutes. This compares to the 20 minute timeout interval with Turbo Tax. Again, an easily configurable option would have been better.
- Estimated Tax Payments entering has improved and is now fully functional as compared to last year.
- Life Events – this is a complete list and is a really intuitive classification.
- W-2 entries had to be made manually.
- The preview features are simple and functional.
- HSA employer contribution was treated correctly and there was a step at which we could enter 1099-SA information. This resulted in the correct tax figure. We spent significant time in Turbo Tax to figure out this.
- Dependent Care Provider information entry screens are accessible - this is an improvement compared to last year. The form requires entry of the telephone number of the provider for California & Oregon tax filers. This was not required in the other products.
- Signup was a breeze.
- Option to import tax file from previous year. Couldn’t use it as we could not find the .tax file it needs. Turbo Tax’s online product only allows getting the pdf file.
- Transferring W-2 information electronically was not offered.
- The ‘Delete’ button in the W-2 form box 12 overlapped the single-line edit field and this made the page look pretty unprofessional. Also Box 18 seemed to need some info although that field was blank in our W-2. Inputting $0 made it happy.
- 1099-R form entry was clumsy with certain fields requiring $0 even when they are not applicable.
- In many of the forms certain fields (example charity name, provider name, etc.) are getting cut off after a certain number of characters are typed.
- The automatic sign-off feature is not as good as the other two products. Specifically, after 5 minutes of inactivity, it comes up with a prompt about inactivity and forces the user to click a button to sign-off as opposed to automatically doing it.
- There was no obvious way for 1040 preview.
Turbo Tax online product wins out overall. The pages load quickly, navigation is smooth, access to different parts is intuitive, and the separation of tools from the rest of the interface is a good touch. Further, electronic transfer feature from other financial institutions is a very good feature. Some of the features such as ItsDeductible are either missing or less functional in TaxAct and TaxCut. TaxAct gets the job done with a simpler interface. The compromise is that there are more manual entries when compared with Turbo Tax. H&R Block’s TaxCut on the other hand attempts to do more of a hand holding job but in the process ends up making the interface somewhat clumsy when compared to Turbo Tax and TaxCut. Further the need to enter $0 in many of the single-line edit fields made the interface less intuitive. It is a time-consuming process to enter 1099-B stock sales and dividend information in TaxAct and TaxCut while Turbo Tax allowed automatically getting the information from our broker. The Turbo Tax premium product may make this and even better experience, but for extra money.
We filed our taxes with Turbo Tax this year as well although the price difference with TaxAct made us consider switching. By not choosing the Premium product, the price difference with TaxAct comes down to $31.70. It was a tough choice, given our tax information from 2000 onwards is saved under our Turbo Tax account and moving away from Turbo Tax would mean we would have our historical information spread out between two products. Next year, we will revisit this and depending on the features and the price difference, we will consider switching out of Turbo Tax.
One alternative to consider is the desktop versions of these products. Below are links to the online and desktop versions (in parenthesis):
- Turbo Tax Online Deluxe from Intuit (Desktop Version: Turbo Tax Deluxe 2008 Bundle),
- TaxACT from 2nd Story Software, a small private software company (Desktop Version: TaxACT 2008 Ultimate Bundle), and
- TaxCut from H&R Block (Desktop Version: TaxCut 2008 Premium Bundle).
Last Updated: 03/09.
* We did not try out TaxCut online this year. Our attempt to use our login from last year failed probably because we didn't use TaxCut to file taxes. So, the information about TaxCut is current as of 3/2008.
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3 Comments::
I just finished using TurboTax Premier through Fidelity link. Fed-$37.45 and State-22.45.
It downloaded all my info from my Fidelity brokerage and retirement accounts perfectly. I had 1099-B, DIV, INT, and 1099-R info to download. Including two Rollovers, Conversion to Roth, Recharacterization, capital gains/dist etc. It streamlined the process immensely and accurately.
However, filling out Schedule C stuff was a little confusing. And, Turbotax price increased by about 50% since March 29.
I have used both Turbo Tax and Tax Act. This year I am currently filing with Tax Act. I want to point out that it is unfair to ding Tax Act for having to manually type in employer data. YOu'd have to do the same with Turbo Tax if you never used the service before. Turbo Tax and Tax Act work the same in that regard. Further, both Tax Act and Turbo Tax allow you to skip certain tax interviews.
It is also fair to point out Tax Act is free for everyone Unless they file a State Return, where the most the cost would be is under twenty dollars. Further, Tax Act doesn't bombard you with advertising after you sign up.
Turbo Tax has a slightly slicker interface, (they keep changing it every year), but Tax Act's is simple and easy to understand. Further, it has stayed the same the last two tax years I have used it.
Except for the convenience of not having to type in employer data and a slightly prettier interface, I am not sure why anybody would start off preferring Turbo Tax over Tax Act.
Very helpful review.
Unfortunately my experience with TurboTax online has been awful. Besides the problem you noted with how it doesn't prompt for enough HSA information, it mangled an IRA conversion/recharacterization and ended up with an IRA deduction to which I am not entitled. After two calls to support, each of which took nearly an hour in hold time, I finally was given the advice to just clear the entire return and re-enter ALL of the data. That's because the on-line version disabled the ability to see where a certain entry comes from -- you can see an incorrect value, but there is no way to track back to its origin. Even the support rep acknowledged that it makes troubleshooting really, really painful.
Then to add insult to injury, it won't let me clear the data because I "already paid". (Not filed, just paid) their theory is that once you've had a chance to print out any of the forms (which was the way I found out that there was an error in the first place -- their "audit" never caught it) you're prohibited from clearing it.
I've just been put on hold for the US call center (thank G*d for small mercies) since the Indian call center can't override that. (And, as far as I'm concerned, the Indian call center is a pointless effort anyway -- they have yet to be able to help with anything, and it takes them forever to walk through their scripts before they finally arrive at the decision that they don't know how to help. The woman last night had never heard of a Roth IRA and had no idea of even how to spell recharacterization.)
I used the on-line version last year without too much trouble, but I'm seriously considering just dumping this and going to Tax Act. If Intuit doesn't want to give me a refund, I guess it is time for a credit card dispute and a complaint to the Better Business Bureau.
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