Deciphering the cost of using TurboTax can feel like navigating a maze, especially with its various versions, add-ons, and payment options. But don't fret! This comprehensive guide will break down how much it costs to use TurboTax for the 2024 tax year (filed in 2025), so you can choose the best option for your unique financial situation without any unpleasant surprises.
Ready to tackle your taxes? Let's start by figuring out what kind of tax filer you are!
The Cost of TurboTax: A Step-by-Step Guide
The pricing for TurboTax generally depends on the complexity of your tax situation and the level of assistance you desire. Prices can also fluctuate throughout the tax season, typically increasing closer to the filing deadline.
Step 1: Identify Your Filing Complexity - Are You a Simple Sally or a Complex Connie?
This is the most crucial first step, as it directly impacts which TurboTax product you'll need.
Sub-heading: What constitutes a "simple" tax return?
Generally, a simple tax return means you:
Only have W-2 income.
Are taking the standard deduction.
Have limited interest and dividend income (Form 1099-INT, 1099-DIV).
Claim common credits like the Child Tax Credit or Earned Income Tax Credit.
Have student loan interest deductions.
Have taxable qualified retirement plan distributions.
If this sounds like you, you might qualify for the Free Edition!
Sub-heading: What makes a tax return "complex"?
Your taxes are likely more complex if you have:
Itemized deductions (e.g., mortgage interest, charitable contributions, medical expenses).
Investment income (stocks, bonds, cryptocurrency, K-1s).
Rental property income or expenses (Schedule E).
Self-employment income or business expenses (Schedule C).
Multiple sources of income beyond W-2.
Certain deductions or credits that require specific forms (e.g., HSA distributions).
Step 2: Explore the TurboTax Product Tiers
TurboTax offers several versions, each designed to cater to different tax situations. Here's a breakdown of the popular online and desktop options and their typical costs for federal filing (state filing is usually an additional charge). Note: These are general price ranges and can vary.
Sub-heading: TurboTax Online Options (DIY)
These are web-based versions you access through your browser. You pay only when you file.
TurboTax Free Edition:
Cost: Free (Federal and generally one state).
Best for: Simple tax returns as described above. If you only have W-2 income and take the standard deduction, this is likely your go-to.
Limitations: Does not support itemized deductions or many common schedules (like Schedule A, C, D, E).
TurboTax Deluxe:
Cost: Typically around $39 - $89 for federal.
Best for: Homeowners, those with significant deductions like mortgage interest or charitable contributions, and those needing to itemize deductions. It helps maximize over 350 deductions and credits.
Key Features: Deduction Finder, Charitable Donation Calculator, Guidance for Homeowners.
TurboTax Premier:
Cost: Typically around $89 - $149 for federal.
Best for: Investors (stocks, bonds, crypto, ESPPs) and rental property owners.
Key Features: All Deluxe features, plus investment income reporting, rental property income and expense management, and automatic import of investment data.
TurboTax Self-Employed (formerly Home & Business):
Cost: Typically around $120 - $149 for federal.
Best for: Freelancers, independent contractors, gig workers, small business owners, and those with significant self-employment income (1099-NEC).
Key Features: All Premier features, plus industry-specific deductions, snap & auto-fill for 1099-NEC/K, mileage and vehicle deductions, home office expense help, and Schedule C import.
Sub-heading: TurboTax Live Options (Assisted Filing)
These options provide access to tax experts for advice and/or review. They come at a higher price point.
TurboTax Live Assisted Basic:
Cost: Starts around $89 - $129 for federal.
Best for: Simple returns where you want the confidence of an expert review before filing.
Key Features: DIY tax preparation with unlimited expert help and a final review of your return by a tax professional.
TurboTax Live Assisted Deluxe, Premier, Self-Employed:
Cost: Prices vary significantly, but expect them to be higher than their DIY counterparts (e.g., Deluxe Assisted could be $129+, Premium Assisted $199+).
Best for: Those with more complex tax situations who want expert guidance and a thorough review of their return.
TurboTax Live Full Service:
Cost: Starts around $129, but can exceed $2,000 for very complex returns.
Best for: Individuals who want a tax expert to prepare and file their taxes for them. You simply upload your documents, and an expert handles the rest.
Key Features: Dedicated tax expert matched to your situation, full preparation and filing, and virtual meetings/phone consultations.
Sub-heading: TurboTax Desktop Software (CD/Download)
These are programs you purchase and install on your computer.
Cost: Generally, desktop versions are a one-time purchase, ranging from $50 to $130+ for federal.
Key Advantage: Allows you to prepare multiple federal returns (typically up to 5 e-files) for the cost of the software, making it cost-effective for families with multiple filers.
State Filing: Usually includes one state program download for unlimited state returns in that state, but e-filing state returns often incurs an additional fee (or you can print and mail for free). Additional state software costs extra.
Versions: Mirror the online versions (Deluxe, Premier, Home & Business), offering similar features based on complexity.
Step 3: Factor in State Filing Fees
This is where many people get hit with unexpected costs.
Online Versions: State filing is almost always an additional fee with paid TurboTax online products. Expect to pay around $25 - $64 per state for e-filing.
Free Edition: The Free Edition generally includes one free state e-file.
Desktop Versions: While the software itself might include one state program, there's usually an e-filing fee per state (around $20-$25) if you don't want to print and mail.
Step 4: Consider Additional Services and Add-ons
TurboTax offers various optional services that can increase your total cost. Be mindful of these as you go through the filing process.
Audit Defense (via TaxAudit):
Cost: Around $40 - $60.
What it is: Provides representation and assistance from a tax professional if you're audited by the IRS or state.
Important Note: Some users have reported that the coverage might be for only one year, not the full statute of limitations, and that buying directly from TaxAudit might be cheaper. Always verify the terms.
Pay With Your Refund (Refund Processing Service):
Cost: An additional fee, typically around $40.
What it is: This service allows you to pay your TurboTax fees directly from your federal tax refund.
How to avoid: You can avoid this fee by paying your TurboTax fees upfront with a credit or debit card.
TurboTax PLUS or MAX Bundles:
These are bundles that combine several add-ons, often including audit defense, identity theft protection, and priority support. They come at a higher price than individual services.
Step 5: Look for Discounts and Deals
Early Bird Discounts: TurboTax often offers lower prices earlier in the tax season. Filing closer to the April deadline usually means higher prices.
Promotional Codes: Keep an eye out for promotional codes or discounts through various channels (e.g., credit card companies, financial institutions, employee benefits).
Affiliate Offers: Some financial institutions or organizations may partner with TurboTax to offer discounts to their members.
Military Discounts: TurboTax often provides free federal and state filing for active-duty military and veterans, regardless of the complexity.
IRS Free File: If your Adjusted Gross Income (AGI) is below a certain threshold (e.g., $84,000 for Tax Year 2024), you may qualify to use TurboTax through the IRS Free File program, which is completely free for federal and often state filing. This is different from the regular TurboTax Free Edition.
Step 6: Review Your Order Summary Carefully Before Filing
Before you hit that "file" button, always review your order summary. This is where you'll see a final breakdown of all federal and state fees, along with any add-on services you've selected. It's your last chance to deselect any unwanted features and confirm the total cost.
Summary of TurboTax Pricing Factors:
Tax Complexity: Simple returns (W-2, standard deduction) are cheapest, complex ones (investments, self-employment, itemized deductions) are more expensive.
Assistance Level: DIY is cheapest, Live Assisted is mid-range, and Live Full Service is the most expensive.
Online vs. Desktop: Desktop software can be more cost-effective if you file multiple returns.
State Filing: Almost always an additional cost for paid versions.
Add-ons: Services like Audit Defense or "Pay With Your Refund" add to the total.
Timing: Filing earlier in the season can result in lower prices.
By understanding these factors and following the steps above, you'll be well-equipped to determine "how much is it to use TurboTax" for your specific needs and avoid any financial surprises this tax season!
10 Related FAQ Questions
How to choose the right TurboTax version for me?
The right TurboTax version depends on your tax situation's complexity. If you have only W-2 income and take the standard deduction, the Free Edition or Basic Desktop might suffice. If you own a home or itemize, go for Deluxe. For investments or rental properties, Premier is best. If self-employed, choose Self-Employed. If you need expert help, consider the "Live" options.
How to get TurboTax for free?
You can use TurboTax for free if you qualify for the TurboTax Free Edition (simple Form 1040, basic credits), or if your Adjusted Gross Income (AGI) is below the IRS Free File threshold (check IRS.gov for the current year's limit) and you access TurboTax through the IRS Free File program. Active military personnel often qualify for free filing as well.
How to avoid state filing fees on TurboTax?
With paid TurboTax online versions, avoiding state e-filing fees is difficult unless you print and mail your state return yourself, which is generally free. The TurboTax Free Edition typically includes one free state e-file.
How to get a discount on TurboTax?
Look for early-bird discounts at the beginning of tax season, promotional codes from financial institutions or credit card companies, and check for military discounts if applicable. Prices tend to increase closer to the tax deadline.
How to know if I need TurboTax Deluxe, Premier, or Self-Employed?
Deluxe: For homeowners, those with significant deductions (e.g., mortgage interest, charitable donations), or who need to itemize.
Premier: For investors (stocks, bonds, crypto) and rental property owners.
Self-Employed: For freelancers, independent contractors, gig workers, and small business owners with Schedule C income.
How to pay for TurboTax without a refund processing fee?
To avoid the approximately $40 "Pay With Your Refund" fee, simply pay for your TurboTax services directly with a credit card or debit card before you e-file your return.
How to understand TurboTax Live pricing?
TurboTax Live options are more expensive because they include direct access to tax experts. "Live Assisted" means you do your taxes with expert help and a final review. "Live Full Service" means a dedicated expert prepares and files your entire return for you. The complexity of your return will drive the final "Live Full Service" cost.
How to choose between TurboTax Online and Desktop versions?
Choose Online if you prefer cloud-based software, want to pay only when you file, and only need to file one federal return (plus state). Choose Desktop if you prefer software installed on your computer, want to prepare multiple federal returns (up to 5 e-files) for a single price, or want access to "forms mode" for direct input.
How to remove unwanted add-ons from my TurboTax bill?
Before you e-file, go to your "Review Order" or "Fees" section within TurboTax. You should see an option to deselect or remove any additional services or add-ons you don't wish to purchase, such as Audit Defense or the "Pay With Your Refund" option.
How to get audit support from TurboTax?
Audit support is typically offered through an add-on service called Audit Defense, powered by TaxAudit. You can purchase this service within TurboTax. It provides a tax professional to represent you if you face an IRS or state audit. Ensure you understand the terms and duration of coverage when purchasing.