Taxes. The word alone can send shivers down many spines. But in today's digital age, tools like TurboTax aim to simplify the process, making it less daunting. However, a common question that arises is: How much does it truly cost to do taxes on TurboTax? The answer, as you'll soon discover, isn't a simple flat fee. It's a spectrum, ranging from absolutely free to a considerable investment, depending on your individual tax situation and the level of assistance you require.
Are you ready to demystify TurboTax pricing and understand what you might actually pay? Let's dive in!
Step 1: Assess Your Tax Situation - The Foundation of Your Cost
Before you even think about opening TurboTax, the most crucial first step is to understand the complexity of your tax situation. This will largely dictate which TurboTax product is right for you, and consequently, its cost.
Sub-heading: What Makes a "Simple" Tax Return?
Generally, a "simple" tax return, which often qualifies for TurboTax's Free Edition, includes:
W-2 income: This means you primarily earn income from an employer who provides you with a W-2 form.
Standard Deduction: You're not itemizing deductions (e.g., mortgage interest, charitable contributions).
Limited Credits: You might qualify for basic credits like the Child Tax Credit (CTC) or the Earned Income Tax Credit (EITC), or a student loan interest deduction.
No other complex income or deductions: This means no investments, rental properties, self-employment income, or other specialized forms.
If your tax life is fairly straightforward, with just a W-2 and the standard deduction, then you're likely in the "free" zone!
Sub-heading: What Makes a "Complex" Tax Return?
Conversely, your return becomes "complex" (and thus, likely more expensive on TurboTax) if you have any of the following:
Itemized deductions (e.g., Schedule A for mortgage interest, property taxes, medical expenses, charitable contributions).
Investment income (e.g., stock sales, capital gains, dividends, cryptocurrency).
Rental property income or expenses.
Self-employment income (1099-NEC income for freelancers, gig workers, independent contractors, small business owners).
Business expenses.
Multiple states to file in.
Foreign income.
Certain less common tax credits or deductions.
The more complex your situation, the higher the tier of TurboTax product you'll likely need, and the more you'll pay.
Step 2: Choose Your TurboTax Product Tier
TurboTax offers a range of products, each designed for different tax situations. They generally fall into three main categories: online editions, desktop software, and assisted/full-service options. The pricing listed below is approximate for the 2024 tax year (filed in 2025) and can change, especially as the tax season progresses. Early bird discounts are often available, so keep an eye out!
Sub-heading: TurboTax Online Editions (DIY)
These are the most popular options, allowing you to prepare and file your taxes yourself online.
TurboTax Free Edition:
Cost: $0 Federal & State
Best for: Simple tax returns with W-2 income and the standard deduction. Includes Child Tax Credit, Earned Income Tax Credit, and student loan interest deduction. Approximately 37% of filers qualify.
Key limitation: If you have any income that requires a Schedule (beyond those mentioned for specific credits), you'll likely be prompted to upgrade.
TurboTax Deluxe:
Cost: Approximately $39-$89 for Federal, plus an additional $39-$69 for each State filed.
Best for: Homeowners, those with charitable donations, and individuals who need to itemize deductions. It helps maximize over 350 deductions and credits.
Common users: Homeowners, those who donate to charity, individuals with significant medical expenses.
TurboTax Premier:
Cost: Approximately $89-$149 for Federal, plus an additional $39-$69 for each State filed.
Best for: Investors (stocks, bonds, mutual funds, cryptocurrency) and rental property owners. It includes all Deluxe features plus specialized guidance for investments and rental income.
Common users: Stock traders, landlords, those with capital gains/losses.
TurboTax Self-Employed:
Cost: Approximately $119-$169 for Federal, plus an additional $39-$69 for each State filed.
Best for: Freelancers, independent contractors, gig workers, and small business owners with 1099-NEC income. It includes all Premier features and helps find industry-specific deductions for self-employment.
Common users: Uber/Ola drivers, graphic designers, consultants, Etsy shop owners.
Sub-heading: TurboTax Desktop Software (Downloadable)
For those who prefer to install software on their computer and work offline, TurboTax offers desktop versions. These often include multiple federal e-files (usually up to 5) and one state download, with additional state e-files costing extra.
TurboTax Basic (Desktop): Similar to the Free Edition online, but a paid desktop product.
Cost: Varies, but generally around $40-$60. State filing usually additional.
TurboTax Deluxe (Desktop):
Cost: Around $60-$90. Includes one state download, but state e-file is often additional ($25-$40).
TurboTax Premier (Desktop):
Cost: Around $90-$120. Includes one state download, but state e-file is often additional.
TurboTax Home & Business (Desktop): Equivalent to Self-Employed online.
Cost: Around $100-$130. Includes one state download, but state e-file is often additional.
A key difference with desktop versions is that you often purchase the software outright, sometimes allowing for multiple federal returns to be prepared from a single purchase, which can be cost-effective for families.
Sub-heading: TurboTax Live Assisted & Full Service
These options provide varying levels of expert help, significantly increasing the cost.
TurboTax Live Assisted:
Cost: Starts at around $80 for Basic, $130 for Deluxe, $210 for Premium, and $220 for Self-Employed (Federal). State filing is additional, typically $60-$70 per state.
Best for: Those who want to prepare their own taxes but want the peace of mind of having a tax expert review their return before filing, or get unlimited help as they go.
Benefit: You get access to a live tax expert (CPA or Enrolled Agent) via chat or video call.
TurboTax Live Full Service:
Cost: Starts at around $130 for Basic, $190 for Deluxe, $290 for Premier, and $390 for Self-Employed (Federal). State filing is additional, typically $60-$70 per state.
Best for: Individuals who prefer to have a tax expert handle their entire return from start to finish.
Benefit: You upload your documents, and a dedicated tax expert prepares and files your taxes for you.
Step 3: Factor in State Filing Fees
This is often where the "free" suddenly becomes "not free." While federal filing can be free for simple returns, and sometimes included with paid federal products, state filing almost always comes with an additional cost if you're using a paid TurboTax product.
Typical Cost: State e-filing generally ranges from $39 to $69 per state for online editions. For desktop versions, you might get one state download included, but e-filing that state will still incur a fee.
Important Note: Some states may not have a separate state income tax, or their filing requirements might be different. Always verify for your specific state.
Step 4: Consider Optional Add-Ons and Services
Beyond the core product tiers and state filing, TurboTax offers several optional add-ons that can increase your overall cost.
Audit Defense (from TaxAudit):
Cost: Typically around $40-$60.
Benefit: Provides year-round audit assistance from a tax professional in case you receive an IRS or state audit letter. This is a third-party service offered through TaxAudit.
Refund Processing Service (Pay with your Refund):
Cost: Approximately $40-$50.
Benefit: Allows you to pay your TurboTax fees directly from your federal tax refund, so you don't have to pay upfront. This is essentially a convenience fee.
TurboTax MAX (bundle):
Cost: Adds to the price of your chosen TurboTax product. The total cost varies significantly.
Benefit: Often includes Audit Defense, Identity Protection, and sometimes priority support. It's a bundle designed for maximum peace of mind.
Step 5: Look for Discounts and Special Offers
TurboTax, like many software providers, frequently offers discounts, especially early in the tax season or for specific groups.
Early Filing Discounts: Prices are generally lower at the beginning of tax season (January-February) and tend to increase as the April deadline approaches.
Returning Customer Discounts: Sometimes, returning users might receive special offers.
Military Discounts: Active-duty and reserve military members often qualify for free federal and state filing with TurboTax, regardless of complexity. This is a significant benefit!
Promotional Codes/Bundles: Keep an eye out for promotional codes from financial institutions, credit card companies, or other partners.
Step 6: Finalize Your Price and File
Once you've navigated the various options, TurboTax will clearly display your final federal and state filing fees before you submit your return. You won't pay anything until you're ready to file, which is a convenient feature. This allows you to explore different options within the software without commitment.
Always review the final charges carefully before authorizing payment and filing.
10 Related FAQ Questions
Here are 10 frequently asked questions about TurboTax costs, starting with "How to":
How to Get TurboTax for Free?
You can get TurboTax for free if your tax situation qualifies for the TurboTax Free Edition. This typically means you have W-2 income, take the standard deduction, and only claim common credits like the Child Tax Credit or Earned Income Tax Credit. Active-duty and reserve military members also often qualify for free filing regardless of complexity.
How to Determine Which TurboTax Product I Need?
Determine the complexity of your tax situation. If you have simple W-2 income and take the standard deduction, the Free Edition may suffice. If you itemize, own a home, or have significant deductions, consider Deluxe. For investments or rental property, Premier is likely needed. If you're self-employed, choose Self-Employed.
How to Avoid Unexpected TurboTax Fees?
To avoid unexpected fees, accurately assess your tax situation before you start. Be aware that adding forms for investments, self-employment, or itemized deductions will likely trigger an upgrade. Also, remember that state filing is almost always an additional cost. Don't opt for additional services like Audit Defense or Refund Processing unless you truly need them.
How to Save Money on TurboTax?
File early in the tax season when prices are often lower. See if you qualify for the Free Edition. Consider using the desktop software if you need to file multiple federal returns. Check for military discounts or other promotional offers.
How to Pay for TurboTax?
You can pay for TurboTax directly with a credit card at the time of filing. Alternatively, for an additional fee (Refund Processing Service), you can choose to have your TurboTax fees deducted directly from your federal tax refund.
How to Know if I Qualify for TurboTax Free Edition?
You qualify for the TurboTax Free Edition if you file a simple Form 1040 return only, with W-2 income, the standard deduction, and potentially the Earned Income Tax Credit, Child Tax Credit, or student loan interest deduction. The software itself will guide you and inform you if your situation requires an upgrade.
How to Handle State Taxes with TurboTax?
Once you complete your federal return, TurboTax will prompt you to start your state return. Your federal information will automatically transfer, and you'll then answer state-specific questions. There will be an additional fee for each state you file.
How to Get Expert Help without Paying for Full Service?
If you want some expert guidance but don't want to pay for the full service of having someone do your taxes, consider TurboTax Live Assisted. This option allows you to prepare your own return while having access to a tax expert for questions and a final review.
How to Compare TurboTax to Other Tax Software Costs?
Many tax software providers offer similar tiers and pricing structures. To compare, identify your tax complexity and then look at the equivalent products from competitors like H&R Block, TaxAct, TaxSlayer, or FreeTaxUSA (which offers free federal and low-cost state filing). Pay close attention to state filing fees and any optional add-ons.
How to Get Audit Defense with TurboTax?
You can purchase Audit Defense as an add-on service through TurboTax, which is provided by a third-party company called TaxAudit. It offers assistance and representation in case your tax return is audited by the IRS or state tax authorities.
