Decoding TurboTax: Which TurboTax version is best for you in 2023?
Time is starting to run out on the 2023 tax season -- your federal income tax returns must be filed by April 18. If you haven't started your taxes yet, a program such as TurboTax can help you find extra deductions and calculate your taxes for you. TurboTax can even autofill your address and employer information from last year, making it that much easier and faster.
Don't put starting your taxes off any longer: You can get your tax refund in less than three weeks if you file today.
Top products in this article:
TurboTax Free Edition (For simple tax returns only. Not all taxpayers qualify.)
In 2020, more than 195 million tax returns and other tax forms were filed electronically; 14 million of those tax returns were filed with a version of TurboTax. The tax software aims to simplify the tax filing process and find customers big tax breaks they otherwise would't find on their own. If you are one of the many Americans considering TurboTax as a tool to help file taxes correctly and on time, there are a few things you need to know about filing your taxes via the software.
When are taxes due in 2023?
Tuesday, April 18, 2023, is the tax filing deadline for most Americans.
On Jan. 11, the IRS announced that California storm victims now have until May 15, 2023, to file various federal individual and business tax returns and make tax payments. The IRS is offering the extension to people in areas designated by the Federal Emergency Management Agency (FEMA). Included areas cover much of the state. Think you might qualify for an extension? Click here to see the full list.
Need more time to file? According to the IRS, you should request an extension of time to file. To receive an automatic 6-month extension of time to file your return, you must file Form 4868. An extension of time to file is not an extension of time to pay. You may be subject to a late payment penalty on any tax not paid by the original due date of your return.
According to the IRS, most refunds are processed in six to eight weeks when you file by paper, or as fast as three weeks when you choose to have your refund direct deposited.
Which version of TurboTax is right for you?
There are four main types of TurboTax to choose from.
Your choice should correspond with your lifestyle. For instance, if you are a taxpayer with investments in cryptocurrency, there is a clear TurboTax version for you. Are you self-employed? Then don't pick the option for taxpayers who document all their income with a W-2.
TurboTax Free Edition
This free version of TurboTax is a great option for taxpayers whose income is largely from W-2s and savings in the bank. The tax software includes a free filing of your simple federal and state tax returns. According to TurboTax, the Free Edition covers W-2 income, Earned Income Tax Credit (EIC) and child tax credits, plus your standard deductions, student loan interest deductions and limited interest and dividend reporting (1099-INT, 1099-DIV).
It's worth noting that TurboTax Free Edition can not handle 1099-G unemployment income or itemized deductions.
The Federal Trade Commission (FTC) is currently suing TurboTax parent company Intuit, claiming the software company is misleading people with its promotions over free tax filing. (Intuit, for its part, says it follows IRS rules and has called the allegations "simply not credible.")
Users get anytime assistance from TurboTax's online community of TurboTax specialists. Worried about something going wrong? TurboTax Free Edition includes guidance in case of an audit, backed by TurboTax's audit support guarantee.
The deadline for filing through TurboTax Free Edition is March 31, 2023. For simple tax returns only, not all tax payers qualify.
TurboTax Deluxe
TurboTax Deluxe includes all the features of TurboTax Free Edition, plus a few extras. It's a good option for homeowners. This TurboTax version offers homeowners step-by-step guidance on how to turn their home investment into a major tax break. (If you're hoping to deduct the interest you paid on your mortgage, you'll want to go with TurboTax Deluxe.)
TurboTax Deluxe includes a search of more than 350 tax deductions and credits to find all qualifying tax breaks. And should an unexpected form arrive late, this software lets you make changes to your 2021 tax return, online, up to three years after it's been filed and accepted by the IRS.
TurboTax Deluxe includes one-on-one support from live TurboTax product specialists.
TurboTax Deluxe can be upgraded to TurboTax Live Deluxe. The upgrades gives customers access to unlimited tax advice and an expert final review.
TurboTax Premier
TurboTax Premier has all the features of TurboTax Deluxe, but is also great for taxpayers with investment incomes, such as stock, cryptocurrency, bonds, ESPPs, robo-investing and income from rental properties. If you've been buying and selling on Robinhood or Coinbase -- especially selling, which is a taxable event -- TurboTax Premier is likely the version for you. It makes reporting these transactions easy, even there are a lot of them -- the software can import thousands of transactions directly from brokers.
Similarly, if you own your house and are renting a spare room to a friend or family member, this version will help you report the income and locate common deductions that can save you hundreds or even thousands of dollars.
Like all TurboTax software, Premier aims to give customers the biggest tax break possible. TurboTax Premier searches for more than 450 tax deductions and credits to find qualifying tax breaks.
TurboTax Premier can be upgraded to TurboTax Live Premier. The upgrades gives customers access to unlimited tax advice and an expert final review.
TurboTax Self-Employed
TurboTax Self-Employed includes all of the features of the other TurboTax versions as well as some important extras for taxpayers who work for themselves. If you've got a freelance job or Doordash delivery side hustle, for example, this is the TurboTax version for you.
Ideal for 1099-NEC incomes, this TurboTax version helps you complete all relevant self-employment tax forms and will also let you know if a Schedule SE or "Self-Employment Tax" is required by the IRS.
This version of the tax software looks through your transactions for industry-specific deductions, including real estate, ride shares, delivery driving, online retail and personal or professional services. If your business has employees, this tax software allows you to prep and print unlimited W-2 and 1099 forms.
TurboTax Self-Employed can be upgraded to TurboTax Live Self-Employed. The upgrades gives customers access to unlimited tax advice and an expert final review.
TurboTax Live Self-Employed, $209
