Tax season is once again upon us and it’s time to begin thinking about filing again. You might be debating whether to buy TurboTax software at Costco or take advantage of the current 10% off deal directly from TurboTax. In this article, I’ll compare the two options to help you decide which might be the better fit for your needs. As always, keep in mind that this is not financial advice.
TurboTax at Costco: What You Need to Know
Costco offers TurboTax desktop products in-store and online. These products are generally sold as CD/DVDs or digital downloads. While Costco is known for competitive pricing, here are some specifics about what they offer:
Products Available at Costco
- Deluxe: For homeowners and those with standard deductions.
- Premier: Designed for those with investments and rental properties.
- Home & Business: Ideal for small business owners or self-employed individuals.
- Business: Tailored for corporations, partnerships, and LLCs.
Discounts at Costco
When purchasing TurboTax at Costco, you’ll often find discounts such as:
- A one-time $10 credit toward specific add-ons, including:
- State e-file fees (excluding TurboTax Business).
- Additional state products.
- Audit Defense services.
- Early-season discounts, which can make Costco a tempting option for early filers.
Costco’s TurboTax offerings are well-suited for those who prefer desktop software and need to file multiple returns (up to five federal e-files are included). However, there are some limitations, which I’ll address later.
TurboTax Online: What’s the Current Deal?
TurboTax’s online products come with a current promotion that adds extra savings to their already-discounted early-season pricing. Here’s what you need to know:
Extra 10% Off TurboTax Online Federal Products
This promotion applies across all service tiers and provides significant savings:
- Free Edition: Best for simple returns (1040EZ).
- Deluxe: For homeowners and those claiming deductions.
- Premier: Ideal for investments, rental income, and cryptocurrency transactions.
- Self-Employed: Tailored for freelancers and small business owners.
Combined with their early-season sale, this 10% discount can lead to total savings of up to 50%. The promotion is valid through January 31, 2025, giving you ample time to take advantage.
Pricing: Costco vs. TurboTax Online
Let’s dive into the cost differences, as pricing is often a deciding factor.
TurboTax at Costco
Costco generally offers competitive pricing for TurboTax desktop products. For instance:
- Deluxe: Typically $59.99 (plus $50 per state e-file).
- Premier: Usually $79.99 (plus $50 per state e-file).
- Home & Business: Around $99.99 (plus $50 per state e-file).
These prices may vary slightly depending on location and season, but they’re generally among the lowest available for desktop versions.
TurboTax Online
When applying the 10% discount to TurboTax’s early-season pricing, the costs are:
- Deluxe: Around $39 (regularly $59).
- Premier: Approximately $55 (regularly $85).
- Self-Employed: About $80 (regularly $120).
Like Costco, TurboTax Online charges an additional $50 for state filing unless you qualify for free state filing by completing your return early (before March 15 in some cases).
Key Cost Differences
While TurboTax desktop products at Costco can be cheaper for those filing multiple returns, the online version often comes out ahead for individual filers, thanks to the extra 10% off promotion and the potential for free state filing.
Features: TurboTax Desktop vs. TurboTax Online
Beyond pricing, the functionality and features of each platform play a significant role in determining which is better for you.
Why Choose TurboTax Desktop (Costco)?
- Multiple Returns: File up to five federal returns with one program, making it cost-effective for families or small businesses filing multiple returns.
- Forms Mode: Desktop software allows users to view and edit specific tax forms, providing greater flexibility for advanced users.
- Offline Access: Since desktop software is installed on your computer, you can work without an internet connection. This is ideal for those in areas with unreliable or unsecured internet access.
- Discount Credit: The $10 credit offered by Costco can offset costs for add-ons like state filing or audit defense.
Why Choose TurboTax Online?
- Convenience: With TurboTax Online, you can access your tax return from multiple devices, including your smartphone, tablet, or laptop. This flexibility is invaluable for those who work on their taxes incrementally or from various locations.
- Cloud-Based: All progress is saved automatically in the cloud, minimizing the risk of losing data due to hardware failure or accidental deletions.
- Free Edition: Simple tax returns (1040EZ) can be filed for free, which isn’t an option with desktop software.
- Live Assistance: TurboTax Online offers live support from tax experts, a feature not available with desktop products.
- Up-to-Date Software: Online users benefit from automatic updates, ensuring they’re always using the latest version with current tax law changes.
Convenience and Usability
When comparing TurboTax at Costco with TurboTax Online, convenience is a crucial factor to consider.
TurboTax Desktop (Costco)
While the desktop version provides flexibility for those filing multiple returns or working offline, it requires:
- Installing software on a computer.
- Managing updates manually.
- Using a single device to complete the return.
TurboTax Online
The online version is designed for ease of use:
- No installation required—simply log in and start.
- Accessible from any internet-connected device.
- Automatic updates ensure compliance with the latest tax regulations.
- Ideal for those who value mobility and want to avoid being tethered to a single computer.
Which Option Is Better for You?
Choose TurboTax Desktop (Costco) If:
- You need to file multiple tax returns and want to save on costs.
- You prefer working offline or have unreliable internet access.
- You’re an advanced user who benefits from Forms Mode.
Choose TurboTax Online If:
- You’re filing a single return and want the most cost-effective option.
- You value convenience and flexibility to work from various devices.
- You’re eligible for the Free Edition or other promotions.
- You prefer automatic updates and live assistance from tax experts.
The Verdict: TurboTax Online Offers More Value
While Costco offers competitive pricing on TurboTax desktop products, the extra 10% off promotion for TurboTax Online in January 2025 makes the online option a better value for most individuals. The convenience of cloud-based access, combined with features like live expert assistance and automatic updates, provides a seamless and efficient tax preparation experience.
That said, if you’re filing multiple returns or need offline access, the desktop version from Costco may still be the better choice.
With these considerations in mind, you can make an informed decision that best suits your tax preparation needs. And if you’re leaning toward TurboTax Online, now is the perfect time to take advantage of their early-season discount and save up to 50% on federal filing products.