O’Connor: TurboTax ticks off users
Tax season officially is open, which means folks will soon be getting cranky. On the other hand, Girl Scout cookies just went on sale, so we’ve got Tagalongs and Do-si-dos to soothe our tax-jangled nerves.
And when it comes to high-carbohydrate comfort food, you’d better stock up if you’re a longtime user of TurboTax.
Fans of the tax-preparation program are angry over a change by parent company Intuit that forces them to buy more expensive versions of TurboTax software if they want to file schedules A, C, D or E which, respectively, cover itemized deductions, business income, capital gains and losses or rental property. So, if you’ve got a moonlighting gig that pays you on the up-and-up — and sends a 1099 statement about you to the Internal Revenue Service — you can’t use the $39.99 Deluxe edition of TurboTax, as in years past. Instead, you’ll have to cough up $79.99 for the Home & Business version.
To put it in practical terms: That forced upgrade costs you the equivalent of 10 boxes of Savannah Smiles.
Users rev up a turbo tirade
That price hike isn’t going down easy with faithful TurboTax users. Over at Amazon.com, reviews of the software have been flooded with one-star ratings and comments from users. According to one post as Mike: “If TurboTax does not reverse this policy of limiting the filing of forms — to force unnecessary upgrades — I will never use or have TurboTax on my computer again.”
Intuit points out that the change affects only us fossils who still use desktop software. Online TurboTax users — who make up 80 percent of the service’s 29 million annual customers — already made the forced switch to higher-priced versions last year. Julie Miller, Intuit’s Vice President of Communications, also points out that the upgrades come with enhanced instructions to maximize deductions.
“We believe the added value isn’t just by producing tax forms, but by the step-by-step interview to guide you through the return,” Miller says.
Maybe, maybe not. As a grudging longtime user of Intuit’s financial management software, Quicken, I don’t buy it. I’ve endured far too many obviously cynical “upgrades” couched in corporate weasel-speak that destroyed my old software’s functionality and forced me to buy new versions. I personally feel this constitutes an “upgrade” in the same way that Chrysler might sneak into the garage, pour sugar into my gas tank and then offer to “upgrade” me to a new car.
Keep calm — and Free File!
But beyond Intuit’s possible cupidity, the bigger question is: Why pay for tax software at all?
If you’re in one of the 70 percent of U.S. households with an income of less than $60,000, you can file your federal return for free through the IRS Free File program — which includes software from the makers of TurboTax. More than 3 million taxpayers Free Filed last year, and the program supports nearly all tax forms, including schedules A, C, D and E, but maybe not Schedule PP-49 which, I believe, covers certain retirement benefits to left-handed Baptist pickle-packers born after 1948.
Additionally, several states offer free e-filing on their own tax returns. My home state of Michigan, for example, offers nine options, but some are restricted to lower-incomes, veterans or by age.
And what about the lucky duckies with household incomes of more than $60,000? You, too, can get free or nearly free tax services from the IRS by using Free File Fillable Forms. That application doesn’t give you the step-by-step guidance offered by Free File or paid services, but it does handle all the calculations, which eliminates all the very common math mistakes.
One way to use Fillable Forms is to simply refer to your 2013 return to walk you through your 2014 taxes. If your tax situation has changed, then pop for a professionally prepared return this year, or pay for tax software or online services, and use that return as your guide next year. That way, you’ll be forced to pay for the privilege of paying your taxes only every few years.
Now, instead of paying an extra $40 for TurboTax, I don’t even have to pay the $39.99 I shelled out last year. That’s frees up a lot of cash for this year’s order of Thin Mints. And here’s the best part: Just like the IRS, the Girl Scouts let you go online — for free.
Brian O’Connor is author of the award-winning book, “The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese.”
Free tax-filing options
If you’ve already bought a version of TurboTax and find it won’t handle your required forms without an upgrade, Intuit says to contact the company directly and it will work with you, but doesn’t specify exactly how. Online: https://ttlc.intuit.com; phone: 800-445-1875.
H&R Block is trying to lure unhappy TurboTax buyers with a free download of its tax-prep software. Email a proof of purchase of TurboTax 2014 to SwitchToBlock@hrblock.com.
TaxACT offers free online federal tax filing, and state returns for $15-$18. Online: www.TaxACT.com.
Free, limited online filing for Michigan isn’t open yet, but information is posted. Online: http://bit.ly/michtax
Finally, there’s our very own federal government’s options for Free File (which went live Sunday) and Free File Fillable Forms, (which goes live Tuesday). Online: IRS.gov/FreeFile.