Tax Software Survey

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Your organization has a wonderful program and for myself going thru this process for the first time was exciting. The best interest of a taxpayer making less than $34,000 a year is being able to easily file her taxes for free and not being presented sub-optimal options with confusing names. The most shameful part of TurboTax’s actions is that it ensnared Americans who could least afford to pay. The $119 TurboTax charged could have been used to put food on the table, save for a rainy day, or invest for long-term financial security.

The reader’s son had paid a $60 fee to TurboTax via her credit card even though he made under $10,000 as part of a summer job and therefore should have been able to file for free. If you are one of the millions of Americans who made under $34,000 last year, you should have been able to use a free version of TurboTax. If TurboTax directed you to a paid version, it’s worth giving the company a call. The report recommends a number of changes, including that the IRS promote Free File and regularly test whether tax-prep firms are complying with the program.

In April, the company was close to finally succeeding in its long-held goal to make Free File permanent. A bill called the Taxpayer First Act was sailing toward almost unanimous approval in Congress. But after ProPublica published a series of stories about the program, including a story showing that military families and students were particularly affected by Intuit’s business tactics, the bill stalled. Congress ultimately removed the provision that would have enshrined Free File in law.

turbotax survey

The alliance, guided by a lawyer who was also an Intuit lobbyist, won a series of concessions that made the program palatable to industry. Free File only required the companies to offer free federal returns. The state return was the most common, but they could also pitch loans, “audit defense” or even products that had nothing to do with taxes. “For a decade proposals have sought to create IRS tax software or a ReturnFree Tax System; All were stopped,” reads a confidential 2007 PowerPoint presentation from an Intuit board of directors meeting.

Very satisfied with my first experience using the TurboTax services this year and would like to complete survey.

Again, Bernie McKay, the lobbyist who had joined Intuit in the late 1990s and outlasted multiple CEOs, led the company’s campaign. Not only did the new product effectively meet TaxAct’s challenge, it quickly became the major driver of TurboTax’s customer growth. But TaxAct’s Free File gambit had forever transformed the industry. Advertising “free” was a great lure, so TaxAct took the battle to a different venue. Barred from making a free offer to everyone through Free File on the IRS’ website, TaxAct decided to make the offer on its own website in 2006. Intuit recognized a credible challenge from the upstart and countered the next year, launching TurboTax Free Edition on its website.

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Part of the solution was to pitch users side products like loans or “Audit Defense.” But it also meant misleading customers. Many who started in TurboTax Free Edition found that if their return required certain commonplace tax forms, they would have to upgrade to a paid edition in order to file. Last year, 104 million taxpayers met the criteria to use Free File, but only 2.5 million used it, the audit found. About a third, or 35 million, filed their tax returns through a commercial site. Via follow-up surveys with a sample of those taxpayers, the watchdog estimated that 14 million people paid a fee to file their taxes when they were eligible to file for free. Most taxpayers qualify to file their returns for free under an IRS-sponsored program known as Free File. Once you’re ready, experts recommend filing your taxes electronically.

turbotax survey

On paper, the program’s eligibility had actually increased to 70% of taxpayers, or about 93 million households, up from the previous 78 million. But in practice, because broad, easy-to-understand offers were now barred, it was clear the program’s use would decline. The new agreement, struck between the IRS and the alliance in 2005, gave Intuit what it had sought. Companies were now expressly barred from offering free tax prep to everyone through the program. Instead, only taxpayers under an income cap, then $50,000 a year, would be eligible. The consequences of Intuit’s efforts affect a huge proportion of the taxpaying public.

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Although readers may prefer TurboTax, H&R Block Deluxe is our Editors’ Choice this year. Both services received “excellent” ratings in our reviews, but H&R Block Deluxe just edged out Turbo Tax thanks to its ease of use and taxpayer guidance, among other features. If you buy through affiliate links, we may earn commissions, which help support our testing. is a leading authority on technology, delivering Labs-based, independent reviews of the latest products and services. Our expert industry analysis and practical solutions help you make better buying decisions and get more from technology.

The IRS’ customer service staff, already too thin to respond adequately to Americans’ questions about the tax code, would have to grow substantially to handle millions of software queries. Congress “will never give you sufficient funding,” Rossotti told ProPublica. Intuit has dominated the tax software market since 1993, when for $225 million, it bought Chipsoft, the San Diego-based company that had created TurboTax. Even then, TurboTax was the most popular option, but Intuit pursued a plan of aggressive growth.

Hi I’ve Received An Email From Turbotax Titled: “participate In Our Survey And Get A $75 Visa Gift Card”. Is It True ?. The E

But in reality, it was a group made up of two giants and a bunch of gnats. Intuit’s only significant competitor was H&R Block, and even it was a distant second. The rest of the alliance consisted mostly of tiny companies with names like

  • There was little incentive for the companies to publicize a free alternative to their paid products, and the IRS agreed that the Free File offers need only be listed on a special page of the agency’s website.
  • Under the terms of an agreement with the federal government, Intuit and other commercial tax prep companies promised to provide free online filing to tens of millions of lower-income taxpayers.
  • Even as TurboTax’s business thrived, 2019 has been a rocky year for Intuit’s long-running war against government encroachment.
  • But based on publicly available data and statements by Intuit executives, ProPublica estimates that roughly 15 million paying TurboTax customers could have filed for free if they found Free File.
  • Intuit’s QuickBooks accounting product remains a steady moneymaker, but in the past two decades TurboTax, its tax preparation product, has driven the company’s steadily growing profits and made it a Wall Street phenom.
  • ProPublica tried to fill out a tax return, for example, as an independent contractor for Task Rabbit who made $29,000 in 2018.

But after entering all the information, TurboTax displayed a page saying that she wasn’t eligible to file for free and would need to pay $119.99 to use Turbo Tax’s “Self-Employed” edition. Because in return, the IRS committed not to compete and offer its own free online tax software to consumers. In other words, TurboTax affirmatively opted in and committed to the IRS that it would offer free tax filing to lower-income Americans. At around the same time, the industry took steps to make the program more difficult to find. Both Intuit and H&R Block added code to their Free File websites that shielded them from search engines such as Google. The new deal included rules that barred Free File companies from offering extra products to the relatively small number of users who access the program. This makes it much more difficult to convert those users into paying customers.

To securely send Justin documents or other files online, visit our SecureDrop page. A reader named Derek, who asked that his last name not be used, was preparing the taxes of his mother-in-law, who lives in Ohio. She made an adjusted gross income of around $18,000 from Social Security and a modest General Motors pension, which means she easily qualified to use TurboTax Free File. In contrast, TurboTax “Free Edition” is only free for those with the simplest tax situations, such as people who only have income reported on a W-2 tax form.

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The product necessarily came on a disk, and by the end of the 1990s TurboTax boxes were nearly ubiquitous, on shelves in office supply stores across America. An internal Intuit analysis of customer calls this year shows widespread customer confusion about ads for “free” TurboTax. A marketing concept frequently invoked at Intuit, which goes by the acronym “FUD,” seeks to tap into Americans’ fear, uncertainty and doubt about the tax filing process. With Free File mostly absent in online searches, most taxpayers may be unaware the program exists.

turbotax survey

Breaking it down by age, online tax software is most popular among 25- to 34-year-olds and least popular among those 65 years of age and older, we found. Half of consumers aged 25 to 34 will use online tax software this year, compared with just 26 percent of those 65 and older. In our survey of 2,000 American tax filers conducted between Jan. 25 and Jan. 28 of this year, 39 percent of respondents said they prefer Intuit Turbo Tax above other tax software brands. H&R Block came in second with 25 percent of the vote, followed by Credit Karma Tax , TaxAct and FreeTaxUSA , and TaxSlayer . In order to increase engagement year-round, they need their TurboTax users to adopt other products in their suite. This value-adding follow-up email and simple landing page encourage users to expand to a secondary use case in a way that feels natural and logical, rather than pushy.

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By 2019, nearly 40% of U.S. taxpayers filed online and some 40 million of them did so with TurboTax, far more than with any other product. Meanwhile, the use of online tax software is up slightly this year, our survey indicated. Thirty-seven percent of respondents said they planned to use either free or paid tax software to file in 2019, up from 35 percent who said the same last year. Another 37 percent plan to file through an accounting firm, 16 percent will ask a family member or friend for help preparing their return, 5 percent will e-file manually, and another 5 percent will file manually by mail. For simple tax returns only, file fed and state taxes free, plus get a free expert review with TurboTax Live Basic. Dunn, who declined to speak with ProPublica, made these remarks during sworn testimony in 2011.