TurboTax Federal Free Edition 2014 (Tax Year 2013) review

TurboTax Federal Free will serve you well if you need minimal help preparing your taxes and don't have to enter data related to more complex situations like a small business or capital gains and losses.
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TurboTax Federal Free Edition has a long history that begins with some serious innovation in the field of tax prep. A couple of decades ago, Intuit introduced a convention called EasyStep in TurboTax, which was the step-by-step Q&A “interview” approach to personal tax preparation. Other software providers followed, and it soon became the standard because it fit the applications so well. The solution providers then rushed to include all forms and schedules, state editions and program-based support.

A few years later, when all of those things were in place, the emphasis shifted from content to style and support. The required innards were there, although the form lineup continued to change as the IRS made revisions and additions. The top three contenders—TurboTax, H&R Block (formerly TaxCut) and TaxACT (formerly Personal Tax Edge) threw the bulk of their efforts into making their programs—and later, websites—as easy to use as possible, with plenty of tax help built in. Companies began to offer multiple versions of their solutions—including free ones—that looked and worked the same, but supported different configurations of tax situations and guidance.

For the last several years, though, the competition has been formidable, TurboTax has won our Editors’ Choice in the personal tax preparation category thanks to its skillful blend of tax-related content and support housed in a user interface that was both visually appealing and easy to navigate. Its language was simple and understandable overall, and its coverage of tax topics was generous. It even tackled some fairly sophisticated investment scenarios.

But when I compared the free versions offered in 2014 (for tax year 2013) by the top tax preparation solution providers—TurboTax Federal Free Edition, H&R Block Free Edition and TaxACT Free Federal—the winner was clear. TaxACT Free Federal takes the Editors’ Choice among these three free versions.

Just Questions and Answers
Even if you have a fairly simple financial situation, maybe a W-2 and some interest income, a traditional IRA and a mortgage and a child, you could still use TurboTax Federal Free Edition. Note that free refers to your federal taxes; state filing will costs you $14.99 through February 17, when it rises to $29.99. The site supports dozens of forms and schedules, though it doesn’t go as far as the paid versions in helping you understand complex topics and maximizing your deductions.

But even the free version simplifies your tax preparation tasks and works hard to ensure that you’re filing a complete, accurate return. It takes a friendly tone as it asks question after question about your income and expenses. Rather than seeing the rather dry, complicated forms and schedules that the IRS creates, you’ll see pages that ask one question or a series of them, first about your income, then deductions and credits, then taxes. You supply an answer by entering it in a blank field or choosing from a list of possibilities or simply choosing Yes or No.

In the background, TurboTax takes those answers, does any calculations necessary, and then drops them on the correct lines of the correct documents. You never have to carry a number over from one form to another. You rarely even see the number or letter that identifies a form or schedule. It’s like completing a really long questionnaire, broken down into short sections.

All three free versions work this way, and they’re all very good at it. The differences lie in other application characteristics.

Getting Around
If you wanted to, you could just keep hitting the big blue “Continue” and “Back” buttons to move through the tax preparation process (though there will be times when you’ll have another choice, like the “No, thanks” button when TurboTax asks if you want to upgrade).

But you may not have a particular number nearby when you need it, for example. Or maybe you realize that you forgot about a 1099. Unlike H&R Block Free Edition, which makes you complete any required pages before moving forward, TurboTax Federal Free puts no such restrictions on your navigational needs, and offers several ways to get where you’re going.

At the beginning of each section (Wages & Income, Deductions & Credits, etc.), there’s a page that displays every topic included there, broken down into smaller sections (Interest and Dividends, Investment Income, etc.). If you haven’t visited a section, you can click Start to begin your journey through the questions there. If you’ve worked in an area and want to return, you’d click Update. Or you can choose Visit All. TurboTax will return you to this page when you’ve finished a topic.

You can also click the Tools link in the left vertical pane and search by typing in a topic (W-2, IRS, etc.) or view a multi-level outline of the entire site. Either way, when you click on an item, TurboTax takes you to the correct page in the interview.

Help, Please

In earlier days of personal tax preparation software, developers tended to throw everything they could find at the application, which made for a lot of choice, but which was a little unmanageable. Everyone has scaled back, and TurboTax is no exception. I wouldn’t expect maximum guidance in a free version—but if you expect to need a lot of focused assistance, better to pay for your software, or even hire a professional.

TurboTax Federal Free Edition’s help seems about right for a free application. My only real quarrel is that, even though some of the help links lead you to FAQs and answers provided by tax professionals, the Qs in the Q&A lead pretty quickly to misspelled, badly-punctuated queries penned by other users. This just looks ugly and unprofessional in a commercial product from a respected company.

The site uses some of the same help conventions that competitors do, including hyperlinked words and phrases in the interview and Learn More links that open small windows with explanations. These are well-written and the right length to satisfy basic questions. Click on See More Help in a box, and the window expands to contain Q&As. Click on View All Questions, or type a word or phrase in the search box, and the TurboTax AnswerXchange opens, which is kind of a free-for-all, a sometimes-massive, multipage list of questions and answers.

TurboTax makes this more manageable by adding filters. You can see all posts by date, type, state, and product, or select a tag, which sometimes gives you many thousands of posts. That part kind of reminds me of the old kitchen-sink approach. Even on the first page of some of these, there are completely unrelated questions.

Though its represents less in terms of sheer tax volume, I think TaxACT Free Federal’s approach is less frustrating and ultimately more helpful. It’s completely context-sensitive, and you can see fairly quickly if what you’re looking for is covered. Plus, for $7.99, you get unlimited phone calls to tax experts. TurboTax Federal Free only offers live chat help.

Wrapping It Up Neatly
When you’re satisfied that you’ve completed all of the topics related to your financial situation, TurboTax reviews your return. This process is much cleaner and reliable than H&R Block’s, and on a par with TaxACT’s. When the site finds something questionable or that you’ve missed, it displays a related portion of the actual form or schedule and a field for your answer.

I can understand why a software company would minimize the scenarios supported in a free website. Their reasoning may be that complex topics require complex, in-depth help systems. But while Intuit and H&R Block have made that decision for you, TaxACT makes the same actual preparation tools available as are found in its reasonably-priced Deluxe product; it just lacks a few extras. If you have a small business or rental properties or capital losses and gains, you can still do your prep for free.

For a very simply return, any of these free products will serve you well. You may even be able to prepare it on your smartphone. But TaxACT Free Federal goes the extra mile, giving you a lot of something for nothing, and thereby earning our Editors’ Choice for free tax-preparation software for 2014.

TurboTax Federal Free will serve you well if you need minimal help preparing your taxes and don't have to enter data related to more complex situations like a small business or capital gains and losses.
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