Which TurboTax Version Should You Opt in 2021?
Since its inception in 1984, TurboTax has considerably attracted thousands of taxpayers in the USA. The user-friendly interface and list of advanced features make TurboTax one of the top choices of many individuals. Besides, the four different versions viz. TurboTax Basic, Deluxe, Premier, and Home & Business give the users an excellent opportunity to select the one that suits best for their requirements. However, instances occur when the users face difficulties in choosing the right TurboTax version for them. This usually happens when they don’t have a clear understanding about the software and the tax filing requirements.
In this blog, we will discuss the various features of each TurboTax version so that you can make an informed decision on choosing the correct one.
What Are The Various TurboTax Versions?
Before we start discussing which TurboTax version to choose, you should know what are the different TurboTax versions are available out there. TurboTax has four different versions viz. Basic, Deluxe, Premier, and Home & Business. Each of these has distinct features; however, as you go up in the hierarchy, you will find new additions to the feature. Also, each of these TurboTax versions allow you to convert TurboTax Tax2Pdf to PDF. So, before you proceed with the financial transaction for purchasing one of the TurboTax versions, it is essential that you have a clear understanding about the same. This will ultimately help you make an informed decision about the purchase.
Understanding The Various Versions of TurboTax
Now that you have read what are the various versions of TurboTax, read on to explore their features and differences. Here’s a detailed overview of each of the TurboTax versions:
- The Basic Edition: You can opt for the Basic TurboTax version if you have a simple tax situation where you need to claim the Earned Income Tax Credit and file a Federal Tax Return. Secondly, if your income is from W-2s and the savings interest and the deductions were less, you can opt for the Basic TurboTax version.
- The Deluxe Edition: The Deluxe version of TurboTax includes all the features of Basic along with the Plus Deduction Maximizer tool that helps you search more than 350 different deductions and credits. Also, it is deductible which gives you an excellent opportunity to value the charitable donated items. Apart from the Schedule D, the TurboTax Deluxe Edition includes many other tax forms and is recommended for the taxpayers whose kids are grown up and have various kinds of deductions.
- The Premier Edition: TurboTax Premier version includes all the features of the Deluxe version. Besides, it has useful tools that lets you deal with investments, rental properties, rental income, or stocks and bonds. You can use this version of TurboTax to calculate profit and loss on stocks, bonds, mutual funds, etc. In addition, the program automatically uploads information directly from the brokers in an effective way.
- TurboTax Home & Business: If you are self-employed or own a business, you can opt for this version. The program helps you complete Schedule C and lets you maximize the deductions for various expenses such as your home office, vehicle, and other business expenses. Also, the program offers you a hassle-free way to fill the income and expense details. You can use the program to create W-2 and Form 1099 for your contractors and employees.
Opting A TurboTax Version? Points To Consider!
Choosing the right version of TurboTax could be challenging; however if you have a clear overview of each of the versions, things get easier. Below-mentioned are the list of some pointers that will help you choose the right version:
- If your yearly income is less than $34,500 and you have kids, it is recommended that you go for the TurboTax Freedom Edition.
- If you are a businessman and your annual income is less than $34,500, you can still use the TurboTax Freedom Edition as the Home & Business Edition ($75-120) might not be affordable.
- If your annual income as a businessman is over $34,500, you can opt for the TurboTax Home & Business Edition. Alternatively, you can use the Deluxe Version.
- Irrespective of your income source (self-employed or an employee), if your annual income is over $34,500 and you prefer using a cheaper version of TurboTax, it is recommended that you refrain using the online versions. Instead, use the CD/download versions. These TurboTax versions offer you an excellent opportunity to print out the forms you require and file them using paper.
- You can opt the TurboTax Free Edition online if your annual income is more than $34,500; however, you don’t make your earnings from any business, rentals, or complex investments.
TurboTax Version For A Businessman
The American tax system needs you to declare your income on a Schedule C if you are a businessman and make your income. In this case, you can opt for TurboTax Home & Business edition, also known as the TurboTax Self-Employed. It is because no other version of TurboTax offers this option. Your business can be anything ranging from a taxi service to selling items on any ecommerce site. If you need to file the Schedule C of TurboTax Self-Employed version, you can create W-2s and 1099 for all your employees. Moreover, this version of TurboTax helps you in fulfilling self-employment taxes along with any business-specific deductions. Instances where you might start wondering how to start over on TurboTax can be effectively dealt with, using this version.
So, these are the various insights into the various versions of TurboTax. Before opting for any of the available TurboTax versions, you must have a clear picture about their features and your requirements. Things like yearly income and the income source acts as the deciding factor for choosing any of the TurboTax versions. Remember, the price associated with each TurboTax version keeps on increasing as you go up in the hierarchy because you will get additional features with every upper version. Hence, it is recommended that you carefully go through each and every information and then make an informed decision on your purchase.