Fintech solutions providers and entrepreneurs are always trying to introduce new solutions for facilitating the consumers.
From budgeting apps to online banking, online investment to tax filing, everything has been a fruit of efforts put in by the fintech entrepreneurs. Tax filing has become easier and simplified with advancements in technology.
Tax software and online platforms let users file their tax returns without diving into complicated rules and regulations. Besides the e-filing at the national level, this software and solutions let the users understand the tax return filing requirements and do their own taxes.
These solutions have eliminated the need for accountants and professionals to tidy up the accounts of individuals and businesses.
Small businesses and individuals are majorly dependent on these online tax filing software. Besides, tax accountants and CPAs also use tax filing solutions as an aide during the busy tax season.
Turbotax is also tax software that conveniently lets users file their tax returns. However, many people get concerned about online solutions’ fees and charges policies.
TurboTax has also been under the red light for not having a clear policy about how they charge the clients. Therefore, many clients ask why TurboTax is charging them.
Therefore, we have come up with an article to help you understand the top reasons why TurboTax might be charging you without your knowledge.
What Is TurboTax?
Turbotax is a product of Intuit to facilitate the taxpayers, CPAs, and businesses by giving a convenient method of filing returns backed by final expert review. Intuit is not only behind Turbotax but many other software like Mailchimp, Mint, Quickbooks, etc., are also on its credit.
Turbotax has been there for decades, and it’s as old as the mid-1980s. In 2022, the software has earned the repute of top software for tax returns.
The clean interface, ease of use, interview method for tax deductions, and several products available within the suite are what make Turbotax unique. You can answer different questions to make the right choices about tax deductions and get an expert review of the finalized return.
It wouldn’t be wrong to say that Turbotax has become a market leader as compared to other tax software like H & R Block, Cash App Taxes, etc.
The software has paid and free versions for the customers that they can choose from according to their requirements. The mobile app of Turbotax is also available making it an even more convenient method for return filing.
Is TurboTax Free?
No. Unlike popular belief, all services of TurboTax are not free. Whether you’re using the self-filing service of TurboTax or getting advice from professional CPAs, there are charges for it. It’s also one of the reasons why many individuals and small businesses get frustrated when they’re charged by TurboTax.
However, there is a TurboTax Free edition as well. This service is most suitable for students or people making less than $34,000 per year.
It’s for basic tax filing, and not everyone is eligible for the service. Therefore, you must be clear before getting on board with TurboTax. It’s not a free solution, and you will have to pay to file your tax return with TurboTax.
Different suites and packages like deluxe, self-employed, live, etc., are available for individuals and people with different needs.
Why Is TurboTax Charging Me? Reasons To Know
Now to the real question of why you’re being charged by TurboTax when it said there are no charges for filing. Here are the common reasons that you might have ignored during the process of tax return filing.
1. Standard Fee Of TurboTax
The standard fee of TurboTax is applicable to every individual who uses the solution for filing tax returns. As mentioned earlier, the free edition of TurboTax is only for eligible users.
You can only claim the free tax return filing once you qualify for it by satisfying the service providers about your eligibility. Therefore, you will be charged a standard fee of TurboTax whenever you file a State or Federal return.
Online users usually face this issue because they are not charged until they file a return. The charges are usually different if you’re using a Desktop version after downloading the software.
2. Pay-By-Refund Option
Pay-by-refund is a very popular service of TurboTax for its customers. The customers can choose to pay the fee of TurboTax from their refund in the future.
When customers are filing the return, they’re asked if they want to pay for return filing fee from the future proceeds of their refund. This service is provided by TurboTax in collaboration with Santa Barbara Tax Product Group.
Check out our article about the TPG Pay-By-Refund Option.
You must be aware that refund claims in returns are not always honored. There might be amendments, reforms, or discrepancies resulting in lower-than-expected refunds.
As a result, your refund might not be enough to cover the fees of TurboTax. In that case, the company might charge your credit card or debit card to cover their fees.
3. Refund Processing Fee
The refund processing fee corresponds to the previous point. When you’re filing a tax return, you agree to let TurboTax take care of your refunds. Therefore, TurboTax will charge you a refund processing fee of around $39.99.
This option also applies when you choose the option of Pay-By-Refund. As a result, you will pay an additional amount that is actually charged by Santa Barbara Tax Product Group.
4. Upgradation Of TurboTax Edition
Did you upgrade your TurboTax Edition from Free to Deluxe or Live? Or you’re a self-employed person who had mistakenly subscribed for Deluxe?
You will need to upgrade to the TurboTax edition. As a result, TurboTax will charge you an additional fee to settle the amount. A common cause of this can be a student who was using the free edition of TurboTax previously.
However, he had taken a student loan and was receiving credits. As a result, he will require the Deluxe edition of TurboTax to file according to the new Schedule. Therefore, he will be charged a fee by the company.
5. Separate Charges For State Return
You are wrong if you believe that the amount you’re paying for Deluxe will cover your State and Federal return.
Let us break it to you you’re charged separately for the state and Federal returns when filing with TurboTax. For instance, you will pay $40 for subscribing to the Deluxe Edition of TurboTax. However, these $40 are only for filing your Federal Tax Return.
If you have to file a State Return as well, it will require you to pay an additional $40. As a result, you’re paying $80, which is double what is advertised. Not only this, the rates can differ depending on where you’re residing. For example, California filers have to pay a $45 refund processing fee instead of $40 for State Tax Return
6. You Don’t Qualify For TurboTax Free File Program
As we mentioned earlier, everyone is not eligible for the free program of TurboTax. You might be thinking that you’re qualified to use the free edition of the software.
However, it turns out that you must pay for the higher edition in order to file a tax return. As a result, Turbotax will charge you a fee. However, none of the cases goes without the consent of the users to upgrade their subscription.
How To Fix It?
Now the question is, how can you fix the problem if you’re not sure why you’re being charged by TurboTax? One thing should be made clear for you to have a better understanding. Every filer who has to file a return other than Form 1040 is not eligible for a free edition of TurboTax.
Therefore, if TurboTax is charging you an amount that you’re unsure of. The best thing is to review your fees and identify why you’re being charged. After reviewing your fees, you can choose any of these options that might result in additional charges.
Remove PLUS Help & Support
If you haven’t paid yet or the amount has not been deducted, you can remove PLUS Help & Support by following the given steps:
Open your return in your TurboTax account and select File from the left menu. Review your order > Remove> Remove PLUS Benefits. That’s all you need to do.
Remove Pay With Your Refund
If you’ve selected to pay with your refund, you’re going to pay a whopping $40 as an additional processing fee. Therefore, you can remove the option until your e-file is in pending mode.
You have to change the Payment Option from Pay-From-Refund to Pay Now.
Remove A State
If you’re not required to file a State Return, but it’s already there, you can fix it by removing the state from your TurboTax account.
Go to your TurboTax Online Account and select State from the left menu. Hit continue and select delete from the status of your state. Confirm deletion, and you’re good to go.
Clear & Start Over
You can clear all the previous settings and start over from scratch to vigilantly select what options you’re choosing.
It’s true that you can easily identify and rectify the reasons why TurboTax is charging you without your knowledge.
We have shared the top reasons why you are being charged by the tax software. However, it should be clear in your mind that the fixation methods only work if you have not been charged already or for future transactions.
None of the fees is refundable. Therefore, if you think that removing the options from TurboTax will give you your money back, it’s not true. All changes take effect for future transactions.