Why Is TurboTax Charging Me

Why Is TurboTax Charging Me? Understanding Fees and Charges

Tax season can bring a variety of emotions — from relief at the thought of receiving a refund to stress about filing and meeting deadlines. For many, using tax software like TurboTax can simplify the process.

However, it can also be surprising to discover that you’re being charged for using the service. In this article, we’ll explore why TurboTax might charge you and how to understand these fees.

Basic vs. Premium Versions

TurboTax offers multiple tiers of their tax preparation software:

  1. TurboTax Free Edition: Designed for simple tax returns that can be filed using a 1040 form without any attached schedules.
  2. Deluxe: Suitable for homeowners, or those who want to itemize deductions. This comes with added assistance for maximizing tax deductions and credits.
  3. Premier: Aimed at those with investments and rental properties.
  4. Self-Employed: Tailored for freelancers, small business owners, and the self-employed.
  5. TurboTax Live: Offers real-time access to a tax expert for personalized advice and a final review.

The Free Edition is, as the name suggests, free for federal filing. However, the other versions come at a cost.

State Filing Fees

Even if you’re using the TurboTax Free Edition for federal filing, state filing usually isn’t free. This can be a hidden cost that users aren’t aware of when they start the process.

Additional Features

There are several additional services that TurboTax offers for an extra fee:

  1. Audit Defense: This offers representation in case you’re audited.
  2. Refund Advance: TurboTax can arrange for an advance on your refund, but this service comes with a fee.
  3. Pay With My Refund: You can opt to pay TurboTax fees with your refund, but this also entails a service fee.

Complex Tax Situations

If your tax situation involves complexities like multiple sources of income, freelance work, or investment income, you’ll be prompted to upgrade to a version that can handle these complexities, which comes at a cost.

Timing Matters

TurboTax often offers promotional prices early in the tax season. As the filing deadline approaches, these promotions may end, and the cost for the service may rise.

In-App Purchases

TurboTax apps may have in-app purchases that can add up. This is common in mobile applications where the base app is free to download.

Bundling Services

Sometimes, TurboTax bundles multiple services together at a discounted rate, but these can add up quickly if you’re not careful.

How to Avoid Unnecessary Charges

  1. Read Carefully: Make sure you understand what you’re opting into.
  2. Review Before You Submit: Before you complete the process, you’ll have the option to review all charges.
  3. Utilize Promotions: Keep an eye out for any discounts or promotions.
  4. Consult Customer Service: If you’re unsure why you’re being charged, consult TurboTax’s customer service for clarification.
  5. Check with Employer or Bank: Sometimes companies have affiliations with TurboTax and offer discount codes to employees or members.


While TurboTax aims to simplify the tax-filing process, the costs associated with its services can sometimes be confusing or surprising.

Always be vigilant about the choices you make within the software, and don’t hesitate to seek clarification on any fees you don’t understand.

Remember, tax situations vary, so the reasons for charges can differ from person to person.

ALSO SEE: Understanding the Middle-Class Tax Refund

Why Is TurboTax Charging Me

40 FAQs on Why TurboTax Might Be Charging You

General Questions

  1. Is TurboTax free?
    • TurboTax offers a Free Edition for simple tax returns, but other editions come with a fee.
  2. Why am I being charged for a free service?
    • If you have a more complicated tax situation, you might need to upgrade to a paid version, hence the charge.
  3. Is there a fee for filing state taxes?
    • Yes, state filing usually comes with a separate fee, even if you’re using the TurboTax Free Edition.
  4. How much does TurboTax cost?
    • The cost varies based on the version you choose and any additional services you opt for.
  5. Are there any hidden fees?
    • Fees for additional services like audit defense or refund advance may not be evident initially.

Premium Services

  1. What is TurboTax Deluxe?
    • TurboTax Deluxe is suitable for homeowners and those who want to itemize deductions.
  2. What is TurboTax Premier?
    • TurboTax Premier is designed for individuals with investments and rental properties.
  3. What is TurboTax Self-Employed?
    • This version is tailored for freelancers, small business owners, and the self-employed.
  4. What is TurboTax Live?
    • TurboTax Live offers real-time advice from tax experts and comes at an extra charge.
  5. Is Audit Defense worth it?
    • Audit Defense offers representation in case of an audit, but whether it’s worth it depends on your individual situation.

Fees and Charges

  1. What is the state filing fee?
    • The fee varies by state and by the TurboTax version you’re using.
  2. What is the “Pay With My Refund” fee?
    • This service allows you to pay TurboTax fees from your tax refund, usually with a small additional fee.
  3. How much does Refund Advance cost?
    • The cost will vary, so read the terms carefully.
  4. Are there in-app purchase fees?
    • Yes, the mobile app may offer in-app purchases that add to your total cost.
  5. Do military members get a discount?
    • TurboTax offers free or discounted services to military members based on their rank.

Timing and Promotions

  1. Do fees increase as the tax deadline approaches?
    • Yes, TurboTax typically increases prices closer to the tax filing deadline.
  2. Are there any early-bird promotions?
    • Yes, TurboTax often has promotions early in the tax season.
  3. Can I get a refund if I switch to a cheaper version?
    • TurboTax generally doesn’t refund for downgrades.
  4. Is it cheaper to buy TurboTax at a retail store?
    • Prices can vary, so it’s best to compare before purchasing.
  5. Are there coupons available for TurboTax?
    • Yes, coupons can sometimes be found online or through affiliate partners.

Additional Costs

  1. Will I be charged for asking a tax expert a question?
    • If you’re using TurboTax Live, the cost is included. Otherwise, it’s generally an additional charge.
  2. Are there fees for importing last year’s tax return?
    • No, importing last year’s tax return is usually free.
  3. What’s the charge for federal e-filing?
    • Federal e-filing is free with TurboTax’s Free Edition but may come at a cost with other editions.
  4. What are the costs for customer support?
    • Basic customer support is generally free, but personalized support may come at a cost.
  5. **What happens if I miss the filing deadline?** – Missing the deadline might result in penalties from the IRS, but TurboTax fees remain the same unless they’ve increased their charges for other reasons.

    Subscription and Account

    1. Is there a fee for creating a TurboTax account?
      • No, creating an account is generally free, but you’ll need to pay for the services you use.
    2. How do I cancel my TurboTax subscription?
      • You can cancel through your account settings, but you likely won’t receive a refund for services already billed.
    3. Is there a renewal fee for TurboTax?
      • TurboTax is generally not subscription-based for individual users; you pay for the tax year you are filing for.
    4. Will I be charged for updates?
      • Software updates are usually free but upgrading to a more advanced version will cost extra.
    5. Are there fees for amending a filed tax return?
      • Amending a return may require a higher-tier version of TurboTax, which may result in additional charges.

    Payment Methods

    1. What payment methods does TurboTax accept?
      • TurboTax usually accepts credit/debit cards and direct bank withdrawal. Some versions also allow you to pay with your tax refund.
    2. Can I pay in installments?
      • Generally, TurboTax requires a one-time payment.
    3. Do they accept PayPal?
      • As of my last update in September 2021, TurboTax did not accept PayPal.
    4. Is there a convenience fee for certain payment methods?
      • TurboTax doesn’t typically charge a convenience fee, but it’s best to check the latest terms.
    5. Can I change my payment method after filing my return?
      • No, payment is usually finalized when you submit your tax return.

    Data and Security

    1. Is my financial data safe with TurboTax?
      • TurboTax uses encryption and multi-factor authentication to protect your data, but no system can guarantee 100% security.
    2. Is there a fee for data import from financial institutions?
      • No, importing data from partnered financial institutions is generally free.
    3. Will TurboTax sell my financial data?
      • TurboTax states that it doesn’t sell your personal data, according to its privacy policy as of 2021.
    4. Do I have to pay to get a copy of my old tax returns?
      • Accessing your old tax returns is usually free for a certain period, but there might be a fee for older records.
    5. Is there a fee for setting up multi-factor authentication?
      • Multi-factor authentication is generally a free feature aimed at enhancing your account security.

    Feel free to consult TurboTax’s website and customer service for the most current and personalized information.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *