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FAQs

Why is TurboTax no longer free? ›

Federal regulators have ruled that Intuit, the maker of the tax-filing software TurboTax, must stop marketing its services as free, unless they are free to everyone or exceptions are clearly disclosed. TurboTax had for years claimed customers could file their taxes online for free.

Cons: More expensive than other tax-filing software. Just simple tax returns (including taxpayers with only W-2 income) qualify for TurboTax Free Edition. Processing state tax returns generally costs extra.

How does TurboTax make money? We want our customers to love our products and services. Because we have customers who pay for our premium products and services, we can offer free tax filing. We offer additional paid benefits that go beyond filing your Form 1040 return with limited credits, but they're optional.

In an opinion and final order issued Monday, the Federal Trade Commission ruled that Intuit engaged in deceptive practices by running ads claiming consumers could file their taxes for free using TurboTax though many people did not qualify for such free offerings.

TurboTax offers two ways for people to file for free: TurboTax Free Edition and TurboTax Live Assisted Basic, the latter of which comes with a tax expert to virtually help you. However, these "free" options aren't free for everyone, according to TurboTax — only 37% of taxpayers will qualify for the free edition.

While TurboTax does offer free services, many complaints issued about the service outline how features are often hidden behind paywalls and that many taxpayers do not qualify for the free services.

While not as well known as TurboTax and H&R Block, TaxAct offers many of the same features at even more affordable prices. If you're a small-business owner or sole proprietor who needs more robust tax software than the basic free plans, TaxAct is a great TurboTax alternative to look into.

TurboTax $141 million settlement

In May 2022, New York Attorney General Letitia James announced a record multi-state agreement with Intuit, requiring the company to pay $141 million in restitution to millions of consumers nationwide, as well as suspend its "free, free, free" ad campaign.

FreeTaxUSA offers many of the same features as TurboTax at a much lower cost in most cases. But TurboTax has a better interface and is praised for its ease of use, including digital uploads of most forms to speed the process.

The Deluxe edition of TurboTax is designed to calculate 350 line-item tax credits and deductions. With the free, online edition, you can only take the standard deduction and any above-the-line deductions and credits. TurboTax Deluxe lets you take itemized deductions and below-the-line credits.

Is TurboTax trustworthy? ›

100% Accurate Expert-Approved Guarantee: If you pay an IRS or state penalty (or interest) because of an error that a TurboTax tax expert or CPA made while providing topic-specific tax advice, a section review, or acting as a signed preparer for your return, we'll pay you the penalty and interest.

Intuit Consumer Tax Group is based in San Diego, California. Intuit Corporation, which owns Intuit, is headquartered in Mountain View, California. There are a number of different versions, including TurboTax Deluxe, TurboTax Premier, etc. TurboTax is available for both federal and state income tax returns.

If we detect that your tax situation requires expanded coverage, like deductions for owning a home, unemployment income, or self-employment income, we'll prompt you to upgrade to a version that supports the forms you need so that we can maximize your tax deductions and ensure you file an accurate return.

You can use Free Edition by selecting Tax Tools in the left menu, then Switch to Free Edition. Selecting this option keeps all the data you've entered so far. Note: TurboTax Free Edition is for customers who are filing Form 1040 and limited credits only. Roughly 37% of taxpayers qualify.

The FTC first sued Intuit in March 2022 over the ads pitching free TurboTax products. The commission said about two-thirds of tax filers in 2020 would have been ineligible for the company's free offerings, such as freelance workers who received 1099 forms and people who earned farm income.

If you select Pay with Refund to pay your Turbotax Fees, there's a $39 processing fee charged by the third-party bank that handles the transaction. Once your e-filed return is in pending or accepted status, it's too late to remove Pay With My Refund.