The question of "how much does TurboTax charge to do your taxes?" is a common one, and the answer, unfortunately, isn't a simple, single number. It depends heavily on your individual tax situation and the level of assistance you require. TurboTax offers a range of products and services, from free options for simple returns to premium packages with live expert help, all with varying price tags.
Navigating TurboTax Costs: A Step-by-Step Guide
Are you ready to tackle your taxes, but feeling a bit overwhelmed by the potential costs? Don't worry, we're here to break down TurboTax's pricing structure so you can make an informed decision and avoid any unwelcome surprises. Let's get started!
Step 1: Assess Your Tax Situation - What Kind of Filer Are You?
This is the most crucial first step, as it directly impacts which TurboTax product you'll need and, consequently, how much you'll pay. Don't skip this!
Simple W-2 Filer (Standard Deduction, No Complexities): Do you only have income from a W-2 job, take the standard deduction, and don't have any complicated investments, rental properties, or self-employment income?
This is where you might qualify for the TurboTax Free Edition. This is ideal for those with straightforward tax situations, including W-2 income, limited interest and dividend income (typically up to $1,500), the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), student loan interest deductions, and taxable qualified retirement plan distributions. TurboTax states that approximately 37% of filers qualify for their Free Edition.
Homeowner or Itemizer: Do you own a home, make significant charitable contributions, or have other deductions that require you to itemize instead of taking the standard deduction?
You'll likely need at least the TurboTax Deluxe package. This version is designed to help you maximize deductions and credits, especially for homeowners and those with itemized deductions.
Investor or Rental Property Owner: Do you have income from investments (stocks, bonds, mutual funds, cryptocurrency), or do you own rental properties?
The TurboTax Premier package is tailored for you. This tier helps you report investment income, capital gains and losses, and rental property income.
Self-Employed, Freelancer, or Small Business Owner: Do you work as an independent contractor, gig worker, freelancer, or own a small business? This includes anyone receiving 1099-NEC or 1099-K forms.
You'll generally need the TurboTax Self-Employed package (or the Premium version, as TurboTax has consolidated these categories). This is specifically designed to help you find industry-specific deductions, report business income and expenses (Schedule C), and handle home office deductions.
Need Expert Help or Review: Do you want the peace of mind of having a tax expert review your return or even prepare it for you?
Consider TurboTax Live Assisted or TurboTax Live Full Service. These options come with a higher price tag but offer varying levels of professional support.
Step 2: Understand the Core DIY Product Tiers and Their Approximate Costs
TurboTax offers several "Do It Yourself" (DIY) online products. Keep in mind that prices can fluctuate throughout the tax season and tend to increase closer to the filing deadline. The prices below are approximate for the 2024 tax year (filed in 2025) and may vary.
TurboTax Free Edition:
Federal: $0
State: $0
Best for: Simple tax returns (Form 1040 only) with W-2 income, standard deduction, Earned Income Tax Credit, Child Tax Credit, student loan interest deduction, and limited interest/dividend income. If your tax situation is more complex, TurboTax will prompt you to upgrade.
TurboTax Deluxe:
Federal: ~$59 - $89
State: ~$59 - $64 (additional per state)
Best for: Maximizing deductions and credits, especially for homeowners, those with charitable contributions, and other common itemized deductions.
TurboTax Premier:
Federal: ~$89 - $149
State: ~$59 - $64 (additional per state)
Best for: Individuals with investments (stocks, bonds, crypto) and rental property income. It helps with Schedules D and E.
TurboTax Self-Employed (often integrated into the Premium tier):
Federal: ~$129 - $149
State: ~$59 - $64 (additional per state)
Best for: Freelancers, independent contractors, and small business owners needing to report self-employment income and expenses (Schedule C). This helps uncover industry-specific deductions.
Step 3: Consider TurboTax Live Options for Expert Assistance
If you want more than just DIY software, TurboTax Live offers human support, but this comes at a significantly higher cost.
TurboTax Live Assisted (formerly "Live"):
What it is: You prepare your taxes yourself, but you have access to on-demand help from a tax expert via video or chat, and an expert performs a final review of your return before you file.
Approximate Costs (Federal, State additional):
Deluxe Live: ~$129 - $179
Premier Live: ~$209 - $219
Self-Employed Live: ~$219 - $239
State Fee for Live Assisted: Often around $64 - $69 per state.
Best for: Those who want to do most of the work themselves but appreciate the safety net of expert guidance and a final review.
TurboTax Live Full Service:
What it is: A dedicated tax expert does your taxes for you from start to finish. You upload your documents, communicate with the expert, and they handle the preparation and filing.
Approximate Costs (Federal, State additional):
Starting at ~$129, but can easily exceed $2,000 for complex returns. The cost is highly dependent on the complexity of your tax situation and the forms required.
State Fee for Full Service: Often around $69 per state.
Best for: Individuals with complex tax situations who prefer to have a professional handle everything, or those who simply don't want to deal with tax preparation themselves.
Step 4: Factor in State Filing Fees and Other Potential Add-Ons
Beyond the federal filing fee, there are other costs to be aware of:
State Filing Fees: For most paid TurboTax products, there's an additional fee for each state return you file. This is typically in the range of $59 - $69 per state for online versions. For desktop software, the state download might be included, but there's often a separate fee (e.g., $25) for e-filing the state return. You can usually print and mail your state return to avoid the e-file fee if using desktop software.
Audit Defense/Assurance: TurboTax often offers add-on services like "Audit Defense" or "MAX Defend & Restore." These provide additional support in case of an IRS audit. These can add anywhere from $40 - $60+ to your total cost.
Pay With Your Refund Fee: If you opt to have your TurboTax fees deducted directly from your federal tax refund, there's usually a processing fee associated with this service (often around $40).
Prior Year Filing: If you need to file a prior year's tax return, this will incur separate fees for that specific tax year's software or service.
Step 5: Desktop Software vs. Online Versions
TurboTax also offers desktop software downloads (CD/Download versions). The pricing structure differs slightly:
Basic Desktop: Generally includes federal filing and some guidance.
Deluxe Desktop: For itemizers and homeowners, includes federal and usually one state download. State e-file is an extra fee (around $25).
Premier Desktop: For investors and rental property owners, includes federal and one state download. State e-file is an extra fee.
Home & Business Desktop: For self-employed individuals, includes federal and one state download. State e-file is an extra fee.
Desktop versions often allow for multiple federal e-files (e.g., 5 federal e-files included) and one state download, with additional state e-files costing extra. Prices for desktop versions can range from $50 to $130 (federal), plus state e-file fees.
Step 6: Tips for Saving Money on TurboTax
While TurboTax can be pricey, there are ways to potentially reduce your costs:
File Early: Prices often increase as the tax season progresses and the filing deadline approaches. Filing earlier can sometimes secure a lower price.
Check for Discounts: Look for promotional offers, especially from financial institutions (like USAA for military members) or retailers where you might purchase the desktop software.
Be Honest About Your Needs: Don't automatically opt for a higher-tier product if your tax situation doesn't warrant it. Carefully review what's included in each package.
Avoid Unnecessary Add-ons: Deselect services like "Audit Defense" or "Pay With Your Refund" if you're comfortable without them or prefer to pay upfront.
Consider Free Alternatives: If you truly have a simple return, explore other free tax filing options like IRS Free File (if you qualify based on income) or other free tax software providers.
Double-Check Your Fees Before Filing: TurboTax will show you a breakdown of your fees before you finalize your return. Always review this carefully to understand exactly what you're paying for. You can often remove add-ons from this screen.
By following these steps, you can better understand the potential costs of using TurboTax and choose the option that best fits your tax needs and budget.
Frequently Asked Questions (FAQs) about TurboTax Charges
How to determine which TurboTax product I need?
You determine the TurboTax product you need by assessing your tax situation: simple W-2 income and standard deduction often qualify for the Free Edition; itemized deductions usually require Deluxe; investments or rental property income typically need Premier; and self-employment or business income generally requires Self-Employed (or Premium).
How to reduce my TurboTax fees?
To reduce TurboTax fees, consider filing early, checking for discounts or promotions, avoiding unnecessary add-on services like Audit Defense, and opting to pay directly with a credit card instead of having fees deducted from your refund.
How to use TurboTax Free Edition?
You can use TurboTax Free Edition by starting your tax return online and entering your information. If your tax situation remains simple (e.g., W-2 income, standard deduction, common credits), TurboTax will keep you in the Free Edition.
How to avoid state filing fees with TurboTax?
For online versions of TurboTax, state filing fees are usually unavoidable unless you qualify for the Free Edition (which often includes state filing). For desktop software, you can typically print and mail your state return to avoid the state e-file fee.
How to tell if I qualify for TurboTax Free Edition?
You generally qualify for TurboTax Free Edition if you have a simple Form 1040 return with W-2 income, claim the standard deduction, and only have certain common credits like the Earned Income Tax Credit or Child Tax Credit, or limited interest/dividend income.
How to upgrade or downgrade my TurboTax product?
TurboTax typically allows you to upgrade to a higher-tier product as you enter more complex tax information. Downgrading is generally more difficult once you've entered data that requires a higher-tier product, though you might be able to clear your return and start over.
How to see a breakdown of my TurboTax fees before paying?
You can see a breakdown of your TurboTax fees before paying by navigating to the "File" section or "My Fees" option within the program or online interface, usually under "Tax Tools" or "Tools Center."
How to get expert help with TurboTax without paying for Full Service?
You can get expert help with TurboTax without paying for the full "Full Service" option by choosing "TurboTax Live Assisted," which allows you to prepare your own taxes with on-demand expert advice and a final review.
How to know if the desktop version is cheaper than the online version?
The desktop version can sometimes be a more cost-effective option, especially if you need to file multiple federal returns or prefer to avoid per-state e-file fees by printing and mailing. Compare the federal and state costs, and any included e-files, between the online and desktop versions for your specific needs.
How to find current TurboTax discounts or promotions?
You can find current TurboTax discounts or promotions by visiting the official TurboTax website early in the tax season, checking major retailers (like Amazon, Costco, Best Buy) for software deals, or looking for special offers from financial institutions.