Stealth Price Hike Riles Up the TurboTax Faithful

By Pedro Hernandez | Posted January 14, 2015

Intuit's popular TurboTax software is under fire for changes that essentially mean that freelancers and rental property owners have to pay more to file their taxes this year.

The Deluxe version of the software (retail: $59.99; widely available for $50), no longer includes Schedule C. Self-employed filers use the form to report profit or loss from a business to the U.S. Internal Revenue Service (IRS). Also gone: Schedule D (Capital Gains and Losses) and Schedule E (Supplemental Income).

This year you'll find Schedule C in the Home & Business edition ($99.99), while Schedules D and E are available in the Premier ($89.99) and higher packages of the home tax preparation software. Needless to say, many Intuit customers don't like the prospect of paying nearly double this year to square away their finances with Uncle Sam.

TurboTax 2014 Backlash

Last week, Reddit's Investing category lit up with news of the changes. A link to Amazon reviews of the TurboTax Deluxe revealed that people are not happy with Intuit's new direction Intuit.

As of this writing, the TurboTax Deluxe 2014 scores a 1.5-star rating (out of five stars) out of nearly 1,300 reviews. The bulk of those reviews (more than 1,100) issued the software a 1-star rating, the lowest possible under Amazon's rating system.

Irate customers: Intuit TurboTax

Many long-time customers are angry; they feel betrayed and view the move as a shameless money-grab by Inuit. Others, while taking a nuanced examination of the issue—Premier edition and higher offer more perks, after all—have a hard time justifying the added expense for functionality that was previously part of the Deluxe package.

Sensing an opportunity, H&R Block is rolling out the red carpet by offering TurboTax users free software. On Jan. 12, the company announced that it is offering its Deluxe + State software to anyone who purchased TurboTax Basic or Deluxe 2014.

"DIYers who have small-business or self-employment income and need to file a Schedule C can now switch to H&R Block's Deluxe + State software for free as they will no longer have access to Schedule C forms with TurboTax Deluxe software," said the company in a statement. "H&R Block Deluxe + State also covers stocks, bonds, ESPPs and other investment income (Schedule D), which TurboTax Deluxe software no longer includes." Ouch.

The Price of Personalizing TurboTax?

Intuit asserts that its market-leading TurboTax software portfolio is evolving to better fit the needs of individual taxpayers.

"We have made changes to TurboTax desktop software because we aspire to deliver the best, Interview-based experience for a customer's unique tax situation," Julie Miller vice president of Communications for Inuit, told Small Business Computing in an email. "Our interview—which simplifies tax preparation and breaks down the federal tax code into simple, easy to understand questions—is how we provide real value to our customers."

Miller also noted that upgraders also get personalized tax guidance. "Customers who need to move up to Premier or Home & Business this year will find that we have added a key benefit to these products—personalized, expert answers to your toughest tax questions. Our credentialed tax experts, all CPAs and EAs, are available via phone and chat at no extra charge (a $19.99 value)," she said.

"The changes we made this year to TurboTax desktop were already part of TurboTax Online," Miller continued. "As more customers move from TurboTax desktop to Online to mobile solutions, this change creates a more consistent experience across TurboTax products and platforms."

Miller also assured that Inuit is listening. "We encourage customers to contact TurboTax directly, and we'll work with them on a case-by-case basis," he said. "We're sensitive to customer feedback and encourage those who want more information to contact us directly."

Pedro Hernandez is a contributing editor at Small Business Computing. Follow him on Twitter @ecoINSITE.

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