Turbotax Online - Software Review

Turbotax Online is a competent website, and easier than downloading software on your PC -- if you count the constant updates from the company that are needed. I think that online tax software is the way to go.

The online service works well, and I am able to pull in data from last year's online return easily. The online product really does not work at all with the desktop product -- they are distinct. Also the Online Turbotax does not work with the Online Quicken. If you want to use Quicken with Turbotax -- you need the desktop versions.

It is a high priced service. I paid $78, and it still took me at least six hours. In previous years, I have tried free and cheap alternatives, and I think you get what you pay for. Turbotax tries a low "come-on" price, and then there are multiple adders until you get to a much higher price. You need to get used to that.

They pile on the high priced services . I certainly was not going to pay $29.95!!! so that they could deduct the $78 fee from my refund.

Consumer tax software does not tell you what it is doing, and that creates the potential for errors. That is, it does not educate about the tax law, it just asks questions, and then fills in forms for you.  [An exception is the HR Block Taxcut has educational videos, so it is better.] This means that you are subject to problems -- for example, I thought that it would automatically decide my son was no loner deductible and take him off-- but no, I had to take him off manually. That is the most serious problem. You can't really trust it; in the end you need to understand every line of your return.

There are a number of animations intended to make it look the computer is working. An animated bar will cross the screen with the script "Looking for additional deductions." That is not really happening while you wait -- it is like a little TV show to keep the client satisfied. The little animations provide a "fit-and-finish" to the product. In past years, I liked them, even though some were a little corny. I suppose it depends on your mood. This year it struck me as too slick.

My other issue is that the 2009 software goes away in 2010. If you get audited for 2009 in the future, you can't access the online software anymore -- unlike having a version on your PC. (They will let you download the desktop version however. But you need to type in your return from the pdf's -- no automated input.) You can download all the forms as pdf though.

Full disclosure: My wife has little business, and we don't use the Turbotax product for that, because it is too expensive and does not interface with her accounting software.  I actually file that using the fill-in pdf forms from the IRS, and mail in the paper.

Highpoints: Nice design. Almost all the odd tax details are addressed. Good question and answer FAQs. Good technical support. Fast response time.  Nice printed documents and lots of supporting pdf forms for your records; I could input forms from my bank.

Lowpoints:  You need to proof-read the return for errors; Always trying to extract another fee; Limited access to the software for prior year audits;

Bottom line:  For simple tax situations, it is easiest to file with the file-in forms from IRS. In my situation, that would take at least a whole weekend to prepare. I can compress the time to half that with this software. At $78, it is a luxury, but I have decided it is worth it.