- If you are looking for top of the line tax software
then you might be considering TurboTax
to follow your 2020 taxes this year.
But with such a big brand,
it also comes with a big price.
In this video, I'm going to be covering
a complete review and walk through of TurboTax
and give you a better understanding
of when it's best to use
a robust tax software like TurboTax,
or when you should look elsewhere.
(soft music)
Hey guys, it's Justine with The College Investor,
Investing & Personal Finance For Millennials.
We are going over TurboTax
and always the number one question
is can you file for free using this tax software?
Now it is possible to file for free with TurboTax.
If you are a W-2 income earner
and you qualify for the earned income tax credit
or the child tax credit.
What's new for this year is that if you had
unemployment income from 2020
that's also included in the free tier.
Now, if you had contributed to a traditional IRA
or a health savings account,
or you wanna deduct student loan interests,
then you won't qualify for the free tier.
You're going to have to level up to the Deluxe Edition.
Crypto traders are going to move
into that Premier level.
Know if you are just a W-2 income earner
and you have student loan interest
that you would like to deduct,
you're better off looking at H&R Block.
Because H&R Block actually includes
student loan interest deductions
in their free version.
So what's new in 2021 with TurboTax?
First TurboTax really worked on ease of use
by allowing users to connect to their accounts
and upload their documents directly to the platform.
So this really can streamline information
for you and save on time.
Plus if you've never received your stimulus check
you can apply for the stimulus tax credit.
Through your TurboTax,
you are going to need IRS letter Notice 1444
in order to make that happen but just know
that you can make it happen through TurboTax.
Now a favorite new feature in TurboTax
is the interest free refund advance loan.
So if you want to get your refund very quickly
you can do so through this program,
and those loan amounts can range
between $250 up to $2,000
based on your estimated refund.
Now there's really no strings attached to this.
The only thing is is it comes on a debit card
and no matter which filing status
you end up choosing and the pricing packages
all filers using TurboTax do have access
to product support specialists,
to help you throughout your return.
Okay, let's talk about pricing.
If you wanna pay the highest prices
when it comes to online tax software
then you're gonna find that with TurboTax.
Unfortunately, they just come with the highest prices
but sometimes that can be beneficial
because this is such a premium
and robust online tax software system.
Let's go ahead and jump over to the pricing packages
and we'll walk you through your options.
Okay so TurboTax typically adjust
their prices throughout the tax season.
So if you wanna lock in the lowest rates
you're best to do that in December, in January.
If it's past that, then you're probably
going to be paying the full amount.
So they do have that Free Edition
that I was telling you guys
about zero for your Federal, and State, and to File
so long as you meet those requirements.
The Deluxe Edition is just $40
and you'll be able to do everything in the free version.
Plus you'll get options for various tax deductions
and maximize your mortgage tax deduction among others.
Then the Premier is currently $70.
The full price is 90.
If you have outside investments
you're gonna be able to file
and report those things appropriately
using the Premier version.
And then the Self-Employed is $90.
Normal price is 120.
So if you're a freelancer or small business owner
they're going to cover those deductions
for various tax breaks,
that they might be able to find with your business.
All right so if you're hopping on board
with a TurboTax train,
let's go ahead and jump into the software
and I'll show you exactly what it looks like.
Okay, let's go ahead and get started
with filing our taxes, using TurboTax
and we're gonna start with the Free Edition
and go ahead and get started.
Now if you're brand new to TurboTax
you'll just go ahead and pop in your email address
and set up your user ID, password, and a phone number.
Once you're logged in,
you are going to be prompted
on some of these little icons
to fill in some information.
So whether you've moved, bought a home,
received unemployment income, any of these things
you can go ahead and click and highlight
and then that's going to change
the types of prompts that you will receive
throughout the tax software experience.
So make sure you thoroughly review
all of these different options
before clicking continue.
If you're brand new to TurboTax,
you're gonna want to put in your personal information,
add that in and then we're gonna go ahead
and go through the actual prompts here.
And you're gonna sign a legal disclaimer
just saying that you know you authorized TurboTax
to go ahead and file your taxes,
send this information off to the IRS.
Once you're inside of TurboTax
this is what the dashboard looks like.
So you're gonna have this left-hand menu here
where you can toggle between your info,
Federal and State Returns,
and then all the way down
to when you get to the filing status.
If you ever need to return back to the home screen
it looks like you can click this Tax Home
and then if you need to make any changes here
you can update your personal information
or go ahead and fill that out
if you're brand new and continue.
Okay then you're going to see a prompt
and typically with these tax softwares
if they have multiple options,
especially paid options
then you're gonna be prompted to upgrade.
Go ahead and just click not now
and then we can get into your Federal Return.
What I really like about TurboTax
is the dashboard really simple.
Not a lot of texts going on.
Everything is really spaced out
if you're doing this on your desktop.
And if ever you have a question on something
you can click this little Learn More button
and that's going to hopefully
pop up a help window, there we go.
A little help window that says
exactly what's going on.
Why they're asking that question.
So this setup if you are comparing TurboTax
to H&R Block they're very, very similar.
The dashboards are almost identical.
Okay so in the Federal Return,
you're gonna see this broken down
into those main categories.
Your income, deductions and credits,
any other tax situations
and then you're gonna look at the review.
What I like about TurboTax
is they've got these nice organized boxes
where you can just go through and click start.
So you know exactly where you're at
and these little not started prompts
will change as soon as you start working
on these different documents.
So you know exactly which items you've missed
and which ones you still need to go through.
Okay so what's cool about TurboTax,
is if you have a W-2
you can go ahead and upload it
or you can type it in manually.
The plus about uploading it
is that the chance of error
is significantly reduced versus typing it in.
Let's go ahead and see
if I can upload my dummy W-2 here.
Okay this is awesome
and I like it's a lot better than H&R Block.
Now obviously this W-2 is fake
but I was able to get this W-2 uploaded
when I was doing this with H&R Block
they wanted me to type it in manually.
So I'm very pleased with that.
It looks like I have to go ahead
and just do a quick check to make sure
this information uploaded correctly.
And I already see a zip code missing.
So I'll go ahead and add that in.
And then we gotta make sure
that this information translated.
Okay so they got my salary wrong
and I think it's because they added
some cents and change
of which I didn't have in my example.
So I'm just gonna quickly change this
but it's always a good idea to check
that you have all of the numbers uploaded correctly.
So even though this was a handy feature
I'm still having to go in and correct this.
And then it looks like my Box 12 codes
did not upload either.
So I'm gonna go ahead and add those in manually.
Okay after making those quick changes,
it looks like they have a refund in place for me.
And then we'll go over
the deductions and credits section,
and look for any uncommon situations.
These typically won't apply to normal W-2 earners
who don't have a lot of other credits.
But you'll wanna make sure just to go
through this quick checklist,
to see exactly whether or not
these situations apply to you.
All right so just a double-check
that this is what we entered and click continue.
And let's see, they're asking for any 1099-INT forms
or if we had a health savings account.
These are items of which you would go ahead and start.
So let's say we did have a health savings account
all right so if you had a health savings account
that's gonna bump you out of the Free Edition
and it's gonna bump you into the Deluxe Edition.
If you are trying to file your taxes early
you can lock in a discounted rate
for $40 for Federal
and then your State is gonna be additional.
So let's say if we do that.
All right did you use
your health savings account
to pay for anything in 2020?
Yes.
Okay, so you can see how the refund
the Federal Refund had updated
based upon what I put on the a 1099-SA form.
So what I like about TurboTax
is that you're gonna see this number
fluctuate as you fill things out,
which is kind of a cool feature
if you wanna keep tracking that.
Cool and that bumped up the refund again.
So in adding my HSA form,
the refund adjusted.
So wages and income are done
let's go ahead and wrap that portion up.
And then we're gonna get
another prompt to upgrade, no thanks.
What I've been noticing
with some of these tax platforms
is they are being extra diligent
about making sure you are reporting cryptocurrency.
And if you do any sort of crypto trading
they're gonna prompt you about this.
So if that's you,
then you'll go ahead and click yes
and go through those prompts.
But if you ever have questions on that
and you can go ahead and click this question box
that question box is gonna pop up and help.
Then we're gonna go into the Deductions & Credits.
Finally, I'm gonna opt for the Standard Deduction
which I think most people
are going to find themselves in.
And then we can say, okay sounds good.
All right so if you had student loan interest
that you paid on in 2020,
you wanna go ahead and click that button
and go ahead and go through these prompts.
Okay, so if you're trying to do this early,
it looks like TurboTax
is not letting you fill out those forms.
So as soon as they're ready
you're gonna be able
to go back in and update that.
But for now, it's going to say not started
which is a good indicator
that you can go back in and finish that up.
And we're gonna go through other tax situations
and go through all of these questions.
All right so what's new for 2021?
Is you're gonna see
the stimulus payment section here,
to make sure that you report that correctly to the IRS.
Okay, so this is also a new area for TurboTax.
It looks like the tax laws have changed
and we're not required to report
our health insurance coverage status
on your Federal Return.
But if you do have this form 1095-A,
then you'll need to go ahead
and enter the information on it.
If you don't, then just click I don't have it.
Then we'll do State Returns.
If you are filing your taxes early,
you're going to notice that your State Returns
won't be available until later.
So you can go ahead
and just leave your return where it's at
and then go back into your State.
What's nice about using TurboTax
is all the information that you entered
in on your Federal side of your return,
can be copied over to your State Return.
And it's just an additional five minutes
just to go over and make sure
everything transferred correctly.
Now, if you are getting a headstart
on filing your taxes,
you can set up notifications
for when some of these tax
return forms are available to you,
so that you can go ahead and input them.
All right one thing about TurboTax
that I'm not really digging
is that I think we've gone through
at least three if not four prompts now
to upgrade again and again.
So I can see how this can quickly
get really pricey when TurboTax
is already one of the highest priced
tax software that you will find out there.
But you can go ahead
and lock in your price for where you're at
and review your order, your refund info,
and then file your returns
once the IRS in your state
is ready to accept those returns.
Okay, just going back
to the home screen real quick.
TurboTax their dashboard,
really easy to use, very simple.
I like how clean the navigation is.
There wasn't a whole lot of texts
everything's spaced out.
And all of the different sections
of your return were clearly organized
which made filing your taxes
with TurboTax really simple.
And that's how you follow
your 2020 taxes with TurboTax.
Okay so obviously TurboTax
is really easy to use.
They deliver a really great user experience.
So if you are wanting something
that is big brand label,
you're gonna have a really easy time
navigating through TurboTax.
Just know that there is a premium price
to using this tax software
but maybe that might be worth your time.
Knowing that you don't have
to figure things out on your own.
It's just very intuitive.
Now, if you are a W-2 earner
and you wanna report
that student loan interest deduction,
you're better off using
the Free version with H&R Block.
If you are a bargain hunter
but you still want a great user experience,
you're better off looking
at something like FreeTaxUSA or TaxSlayer.
Where you're going to pay a cheaper amount
and still have a great experience
filing your taxes online.
Now we cover a bunch
of online tax software on the website.
So be sure to check out
all of our complete reviews
before you make your decision
at the collegeinvestor.com.