Beware while filing taxes with Turbo Tax

Tax season is here. Millions of folks in the US have filed taxes or are going to and I suspect that thousands will use Turbo Tax’s services like myself. If you qualify for free file programs, check this website out from Turbo tax or this list of other services from the IRS. The reason why I called out this version of Turbo Tax is that I couldn’t find it from their main website.

If you have any income, be it interest, capital gain or dividends from your stock portfolio, chances are that you’ll pay at least $80 ($40 for Federal tax and $40 for State tax) to use an upgrade service from Turbo Tax. The “free” version on Turbo Tax doesn’t cover it at all. In fact, they design their website in a way that tricks users into paying more buy labeling the “free” version (I don’t believe you can access the free version on Turbo Tax main site) “Not Now” as you can see below

Source: Propublica

It’s bad enough that the company uses color effect to trick users. They also label it manipulatively so that users are discouraged to pick an option that screams “Not now”. Worst, that is not the only trick Turbo Tax has to get more from your wallet. Upon finishing your tax filing, you will be prompted to pay for the service fees by either using a credit card or paying with tax refund. After minutes or probably hours of preparing all the documents and information, a taxpayer is likely tired and likes to finish up so quickly that he or she won’t notice that using tax refund to pay Turbo Tax will result in a $40 fee

turbotax pay refund fee
Source: Mighty Taxes

PLEASE DO YOURSELF A FAVOR AND PAY WITH A CREDIT CARD

I came across an alternative that I personally will try next year: Credit Karma. The service claims that its free version covers dividends and capital gains, supports federal & state taxes and can import tax returns, even when you filed taxes with a different preparer.

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