A Comprehensive Guide to TurboTax Premier vs. Free Version
There are numerous versions of TurboTax available in the market today, making it challenging to choose the one that best suits your tax situation. This guide delves into the benefits of using TurboTax Premier compared to its free counterpart and highlights which version is ideal for different taxpayer scenarios.
An Overview of TurboTax Versions
TurboTax offers four main types, each tailored to different taxpayer needs and situations. Here, we compare the free version with the Premier version.
The Free Version: Best for Basic Taxpayers
The free version of TurboTax is an excellent choice for taxpayers whose income primarily comes from W-2s and savings in the bank. This simple yet powerful software includes a straightforward filing of federal and state tax returns. According to TurboTax, the Free Edition covers W-2 income, Earned Income Tax Credit (EITC), and child tax credits, along with standard deductions, student loan interest deductions, and limited reporting of 1099-INT and 1099-DIV.
Limited Capabilities of TurboTax Free
While the free version is adequate for many taxpayers, it has its limitations. For instance, it cannot handle 1099-G unemployment income or itemized deductions. Additionally, the Federal Trade Commission (FTC) is currently involving Intuit, the parent company of TurboTax, in a legal dispute regarding misleading promotions about free tax filing. However, Intuit maintains that it adheres to IRS rules.
TurboTax Deluxe: A Step Up from the Free Edition
TurboTax Deluxe bundles all the features of the Free Edition with a few extra benefits. This makes it a great choice for homeowners or anyone who needs a bit more flexibility and guidance during their tax preparation process.
Maximizing Homeowner Benefits
TurboTax Deluxe provides step-by-step guidance for homeowners looking to turn their home investment into a major tax break by deducting mortgage interest payments. It also includes a comprehensive search of over 350 tax deductions and credits. Additionally, this version allows for online adjustments to a 2021 tax return up to three years after it has been filed and accepted by the IRS. This feature is particularly useful for those who receive late forms.
Personalized Support
Users of TurboTax Deluxe enjoy personalized one-on-one support from live TurboTax product specialists, ensuring that any doubts or concerns are addressed promptly.
TurboTax Premier: Ideal for Complex Financial Situations
TurboTax Premier is the ultimate choice for taxpayers with complex financial situations, such as those with investment incomes, including stocks, cryptocurrency, bonds, or rental properties. The software is especially beneficial for individuals who frequently engage in transactions such as buying and selling on platforms like Robinhood or Coinbase.
Effortless Reporting for Investment Transactions
One of the standout features of TurboTax Premier is its capability to import thousands of transactions directly from brokers, making the process of reporting these transactions straightforward and effortless, even for those with a large number of investment transactions.
Maximizing Tax Breaks
TurboTax Premier is designed to help taxpayers maximize their tax breaks by searching for more than 450 tax deductions and credits. It specifically caters to taxpayers with rental income, offering guidance on how to report these funds and find common deductions that can significantly reduce tax liabilities.
Why TurboTax Premier is Superior
TurboTax Premier not only covers a broader range of tax scenarios but also provides exceptional support and peace of mind. Its robust features and advanced capabilities make it the preferred choice for those with more complex tax situations.
Whether you're a basic taxpayer or someone with a more complex financial landscape, choosing the right TurboTax version can significantly impact the accuracy and efficiency of your tax filing. By understanding the differences between the free version and Premier, you can make an informed decision, ensuring your tax preparation process is as smooth and successful as possible.