Take Care of Your Taxes with TurboTax 2012

For people like me that hate paperwork, tax season can be a terrifying time of year. The tediousness of entering a slew of financial information and the fear of a potential audit makes the whole process one that I dread. For the past few years, I’ve been content to just dedicate a weekend to organizing my information and doing it all myself via the TurboTax website. When I saw that TurboTax offered a desktop version of their service via the Mac App Store, I decided to use it this year instead of the web app.

How does the app stack up against its own web-version and the competition?

Getting Started

The first surprise I found was the fact that the app didn’t offer to let me log in with my TurboTax account. The web app lets you import your information from previous years, but the desktop app skipped this feature the first time I opened it, (more on that later). Consequently, you may find that you need to devote a few more minutes than you might have expected to filling in personal information.

Importing data from previous years seems to work for some users but not for others.

Tax law is a dynamic area, so rules and procedures change frequently. As a result, the app automatically checks for updates as soon as you open it. I spent a few days using this app, and each time I opened it back up it had new updates. They don’t take long, and it is reassuring to know that the folks at TurboTax are staying on top of the latest information for you.

I had updates every time I opened the app. Fortunately they run quickly.

Interface

The desktop app is set up in much the same way as the web app. At the top left you get an updated count of your refund for both state and federal taxes. Below that counter is a “flag” feature, which lets you mark a section that you are unsure about for future reference. The top of the window gives you quick access to a few features that help you understand your tax situation, and what areas you have yet to fill out. There are buttons for the Help Center, as well as a slide-out for community discussion which allows you to post questions for other users to help you out with.

The navigation bar missed the opportunity to help users jump to sections with greater accuracy.

Overall, the interface is very functional and intuitive but does have certain usability drawbacks. Navigating between sections is easy using the links at the top of the window, but getting to specific parts within each section requires a bit more clicking than I would have liked. Having nested navigation would have saved me quite a bit of time.

The insight that the app offers isn’t always very visually appealing or useful.

The information you get from the Tax Data and Tax Summary is useful, though not presented in a way that helps neophytes like myself understand what all the information means. There are no charts or graphs that give any insight into your taxes, such as the bracket you are in or how much you are paying compared to last year. In many ways, the information you get ends up just mirroring what you see on many of your standard forms, such as your W-2.

Features

I have a lot of respect for people who can stare at spreadsheets of numbers all day without losing their mind, but I’m sure not one of them. I’d hate to have to stare at spreadsheets any longer than I have to when filing my taxes. Fortunately, TurboTax is able to automatically import much of the information that it needs from the financial forms your employers and investment managers send you. Using some numbers from these forms, including your Social Security number and your employer ID number, it will automatically fill in information for you. I found that this worked well, but only after making sure that I entered dashes and spaces exactly as they appeared on my forms.

The import features work very well, but you’ll have to be careful about dashes and spaces.

One of the most confusing parts of my taxes always stems from investment information. TurboTax eliminates that confusion by allowing you to enter your login info for your investment company and it will fill out your 1099-DIV and 1099-INT. If you own more than a couple of stocks and mutual funds, this will save you loads of time. I use a large investment firm, but the list seems to show support for many smaller, regional firms as well. For the most part, it seems that if your firm is supported by Mint.com, it will work fine with TurboTax.

TurboTax walks you through deductions and credits by asking you a number of straightforward questions in order to determine which ones you qualify for. I ended up having a question and clicked on the Help Center button, which redirects you to your browser. Getting good answers to your questions on TurboTax seems to be hit-and-miss, but I fortunately was able to get some clarification regarding a deduction related to my student loans.

The app will let you know what your chances are of being audited.

As you complete each section, an error checker runs to make sure you haven’t missed anything. I found it to be very accurate, as it caught fields that I had skipped several times. Once you are finished entering your information, TurboTax gives you a few options regarding how you receive your tax refund money. You can either enter your checking account information or have a check mailed to you. I opted for the electronic transfer, and used a check to get my routing and account numbers.

Pros and Cons

The whole process of using TurboTax as an application was quite similar to my past experiences of using the website. The folks who structure the questions take great care to dumb it down for people like me, and they demystify the tax code.

As you move through the application, you can always save your progress. Rather than just save your progress internally, you export the save file to wherever you’d like. This does have the benefit of giving users the flexibility to move the save file around, but it seems like having the file saved inside the app with the option to export it would be a simpler solution for the most novice of users.

As I mentioned, importing your information isn’t quite as straightforward as it could be. When I first downloaded the software, it opened right up without asking about last year. Many reviewers in the MAS also found that to be a disappointing surprise. However, after opening up the app again, a “Startup Assistant” popped up and asked about importing data from last year. I’m not sure whether this was part of those aforementioned updates that occur every time you start TurboTax, or whether its some glitch that prevents it from happening when you first launch it. Either way, you can apparently import data from previous returns, but it didn’t work for me.

What I found to be most troubling was the apparent lack of security. With the web app, I was sure to have 1Password create a long, complicated password to protect my sensitive personal information, such as my Social Security number. The Mac app oddly has no such protection. Of course, you can stick the saved file in an encrypted disk image, but this is a feature that should be part of the app.

The pricing structure is simple, but you don’t get a good sense of what you will be charged with the Mac app like you do with the web app.

TurboTax is a textbook example of how to use fine print when it comes to advertising your prices. They plaster the words free all over their website, but users quickly find out that they use that word to refer to some very basic features, and that you will almost certainly end up having to pay for something. When you use the website, they seem to be a bit more upfront about what each feature will cost you, (and push those deluxe packages pretty hard). But with the Mac version, I made it all the way to the very end before it alerted me to the cost of my state and federal tax filings.

So, while the app is free to download, it’s best to remember that you’ll likely end up spending at least $29 to file your taxes.

Conclusion

I never had much to complain about the last few years when I would file my taxes using the TurboTax website. For the most part, their Mac version of the software mimics the best parts of the web experience, especially the sense that they are holding your hand as you navigate through the many sections. However, all of the advantages that one might expect from having a desktop version of a web app, (namely, convenience), seem strangely absent here.

While it gets the job done just fine, however, when you compare the overall experience to the web app, it is hard to recommend using this.


Summary

A Mac version of the popular tax filing software brings many of the best features but fumbles some of the details.

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  • Ian C.

    Interesting … since coming to USA in 1996, I’ve always used the program – but from your comments, I think I’ll try out the online version this year. Thanks

  • Ryan M

    I think you are missing a MAJOR advantage of the desktop version (unless they changed the webapp in recent years) is that if you buy any of the desktop versions (yes, any paid version) it includes 5 federal e-files automatically, then you just pay for the state e-file. I do taxes for a few family members and this comes out to a huge savings, at least $20-40 a return because I only pay for the software once vs the webapp I pay for every return.

  • http://www.itrush.com/ IT Rush

    Thanks for this review.. hope to hear other related product with lots of cool features..

  • Scott

    I used both web and software versions, and had my results verified by TurboTax, and bought the protection plan; but when I got audited, TurboTax protection was useless, so I hired a tax accountant. He offered to have a look at my previous three tax returns, all done via TurboTax. Then, he pointed out numerous errors on them, including many instances of TurboTax putting values in the wrong columns. I paid him to file amendments, and I netted thousands of refund dollars on each return! I even got through my audit with a refund plus interest! During those years, I averaged $42k for a family of five with both parents working, no complicated investments or businesses; just basic 1040 stuff. Now, maybe I did the data entry wrong, but the verification step should have thrown flags and it didn’t. So, I recommend paying a good accountant instead of using TurboTax.

  • Mike Walter

    When did you shut down your Turbo Tax on line?

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