I just finished and E-filed my 2010 federal and state income taxes. They were a breeze this year. The most difficult part was tracking down all my 1099 forms!
I have been using TurboTax Deluxe Online Version for the past two years. Prior to that, I used the desktop PC version for about five years. While the functionality is similar between the two versions, I now have a strong preference for the online one.
Benefits of TurboTax Online:
There is nothing to install on your computer. Last minute software upgrades and patches are applied in the cloud. No dedicated disk space or other system resources are used by the application. There is no bloat and nothing to uninstall.
It is browser based - you can use it on computers at different locations. Since no files are stored on the computer (other than a file copy at the very end), you could prepare your taxes on a on a friend's computer, or at work or at the library.
You don't need to pay, or even provide a credit card number, until your taxes are complete. If for some reason you are not confident or happy with the results, you can go prepare them a different way instead (as long as you don't E-file or download the tax return, you don't need to pay).
General TurboTax Features:
There is a whole range of TurboTax individual tax products: Basic, Deluxe, Premier, and Home and Business.
When looking at the prices of the different products, make sure that you are comparing on an equivalent feature basis. Some of the prices shown are for federal and state tax preparation, and some are federal only. E-filing is free for all of the online products, but apparently $19.95 extra for state returns from the desktop products.
If you start preparing your taxes with the Basic, it will let you know if your tax situation might benefit from a more premium version. If you have stock sales, it will always suggest that you consider upgrading to the Premier Edition. However, if you have good records for your cost basis and sales proceeds, I don't think you need it.
All of the products allow multiple ways to navigate through the preparation of your returns. The easiest way is using 'Easy Guide' step-by-step guidance that asks questions in plain English and then puts your answers on the correct tax form. After you do an inital pass through all the questions, it is sometimes easier to navigate directly to an area of interest using subject area menus.
If you have questions during preparation of your returns, they can usually be answered by integrated help text and FAQs, or by asking a question in the TurboTax Live Community. I tend to be cautious about using the information provided by the TurboTax Live Community since you don't know how much expertise some of the contributors might really have. There are also tax experts available to answer your questions, for a reasonable fee, from 7am to 7pm Pacific time during prime tax season.
TurboTax easily transfers information from the previous year's tax return, such as bank account for direct deposit of tax refunds and capital loss carryovers. It will even import some data from the previous year's files from H&R Block at Home 2009 and TaxACT 2009. Note: It does seem that integration with Quicken and QuickBooks is better with the desktop versions of TurboTax.
TurboTax allows you to directly import data from brokerage accounts (forms 1099-B, 1099-DIV, etc.) at most of the major brokerage and investment companies (Fidelity, Vanguard, Schwab, TIAA-CREF, T. Rowe Price Brokerage, etc.).
The best prices on TurboTax software seem to be available through investment firm's customer and prospects links. Search for the name of your institution and 'TurboTax Discount'. Some firms may offer a higher discount that only applies on the federal products. My federal return was $22.45 (MSRP $29.95) and state was $27.70 ($36.95) for a total of $51.15.
Note: There is also a TurboTax Online Federal Free Edition which has more limited functionality (the free version does not allow the import of the prior year's data or support tax schedules C, D, E, and F).
All versions of TurboTax show your refund (or taxes due) in real time during the preparation of your return. This provides an ongoing reasonableness check on your data.
I love being able to E-file. I received an electronic confirmation for my federal and state returns about three hours after submission.
Preparing my taxes with TurboTax Deluxe Online is easy. When I get a refund, it is enjoyable, too.