The amount you should pay for TurboTax depends on the complexity of your tax situation, as TurboTax offers various editions designed to meet different filing needs. Costs can range from completely free for simple returns to over $100 for more complex scenarios involving self-employment or investments.
TurboTax structures its pricing based on the features and forms required for your tax return. Generally, the more complex your financial situation, the higher the cost.
TurboTax Edition Costs
Here's a breakdown of the typical costs for federal and state filing across different TurboTax editions:
| TurboTax Filing Option | Federal Cost | State Cost |
|---|---|---|
| Free Edition | Free | Free |
| Deluxe | $39 | $39 |
| Premier | $89 | $39 |
| Self-Employed | $129 | $39 |
Note: These prices are generally for online filing and may vary based on promotional offers, bundle deals, or the specific tax year.
Choosing the Right TurboTax Edition
Selecting the appropriate TurboTax edition helps ensure you don't overpay for features you don't need, while also making sure you have access to all necessary forms and support.
- TurboTax Free Edition:
- Best for: Individuals with very simple tax situations, typically those filing a basic 1040 form without itemizing deductions. This includes W-2 income and claiming the standard deduction.
- Cost: Completely free for both federal and state returns.
- TurboTax Deluxe:
- Best for: Homeowners, filers with charitable donations, or those needing to itemize deductions. It helps optimize deductions to maximize your refund.
- Cost: $39 for federal and $39 for state.
- TurboTax Premier:
- Best for: Individuals with investments (stocks, bonds, mutual funds, cryptocurrency) or rental property income. This edition includes guidance for reporting investment sales and rental income and expenses.
- Cost: $89 for federal and $39 for state.
- TurboTax Self-Employed:
- Best for: Freelancers, independent contractors, small business owners, or anyone with 1099 income. It helps you manage business expenses, depreciation, and navigate self-employment taxes.
- Cost: $129 for federal and $39 for state.
Key Considerations When Paying for TurboTax
To determine how much you should be paying, consider these factors:
- Income Sources: Do you have only W-2 income, or do you have 1099 income from freelancing, investments, or rental properties?
- Deductions and Credits: Are you taking the standard deduction, or do you need to itemize? Do you qualify for specific tax credits that require more complex forms?
- State Filing: Most paid federal editions also incur a separate fee for state filing, though the Free Edition typically includes both federal and state for no cost.
- Audit Support: Higher-tier editions often come with enhanced support features, including audit assistance or full audit defense.
- Live Assistance: If you anticipate needing direct help from a tax expert, TurboTax offers "Live" options (e.g., Deluxe Live, Premier Live) at a higher price point, which connect you with a tax professional.
By accurately assessing your tax situation, you can choose the TurboTax edition that provides the necessary features without paying for unnecessary extras, ensuring you get the most value for your money. For more detailed information on various tax filing options, you can explore resources like SmartAsset's comparison of H&R Block vs. TurboTax.
