The Tax Software Racket

By on March 27, 2006

April 15 is looming, but this year I’m ahead of the game; just zapped my e-file off this morning. Over the last several years I’ve been jumping back & forth between H&R Block’s Tax Cut and Intuit’s TurboTax (I liked the now-retired name “MacinTax” better), and this year it was Intuit’s turn. Well, actually that’s not entirely true; it was their turn last year as well, which put me on their list to receive an installer disk in the mail this year. Being the obedient consumer that I am, I put that disk to work.

The $40 price tag for the software could’ve been the end of it for me, but I went for the e-file option, which costs another $15. Intuit gives you two options to pay that $15; you can either charge it to a credit card, or you can have that fee deducted from your return. The catch is that if you take the latter option Intuit charges you an additional $30 for the favor.

And it doesn’t stop there; if you’ve got a refund coming, you can spend up to $1,000 of it with a Refund Bonus. Buy a $100 gift card for a participating retailer and pay just $85 for it. Not a bad deal, but it just seems a little cheesy for the outfit that’s helping me with my taxes to be hawking trinkets under the exit sign.

Seems like the folks at Intuit have got most every angle covered to extract the maximum amount of cash from their victims customers. I guess there is one more angle they could take, but after sharing with them all of my vitals, including the names, birthdates & Social Security numbers of all my family, as well as bank and credit card account numbers, I really don’t want to think about that possibilty.

Now I did it; went & scared myself. Somebody tell me it’ll be ok. Please?



  1. Dave, you have to switch to Turbotax Online. I’ve used it for the last 3 years, and it’s great. It works at least as well as a piece of desktop software, and it remembers my tax information from year to year. This year it already knew my usual forms, and let me compare my numbers with last year.

    I completed and filed taxes this weekend for $20, and it only took half an hour. It was a thing of beauty. H&R Block would have charged me $300, taken at least 90 minutes, and would probably have done a poorer job.

    Between Quickbooks, payroll, and taxes, Intuit squeezes a lot of money from me, but I’ve never once regretted the money spent on Turbotax online.

  2. When it comes to getting money back that I’m owed I’m a bit tight. Even tighter if I owe the government. Last year I used Turbotax online ( for free, but this year they bumped the price to $10. I don’t feel the need for tax advice so I wasn’t real eager to pay them. I found will do it for free. No income restrictions. Being a bit paranoid I ran the numbers through turbotax online and they came out the same (they don’t charge you until you are ready to file.) Ten days later I had my refund. Slick and free.

  3. I used Turbo Tax online last year and blogged about it. But I forgot this year, and just mindlessly picked up the boxed version one day in Best Buy. It was the same price — $20 — but I feel less cool.

  4. I was tempted by the online services, but used the installed version more for comfort’s sake. The one question I have about the online services is where the data from the work you do is stored, locally or on their servers? And if it’s saved locally, can other apps get at that data?

    I didn’t look very deeply into those questions; surprisingly it was my wife that brought it up. The thing I thought most interesting was how Intuit was so willing to help you spend your refund. I’d much rather get back next to nothing or have to pay something in than have a big fat check coming back. I don’t know about the rest of you, but I think I can make better use of that money throughout the year than Uncle Sam, or Intuit.

  5. I don’t know about the rest of you, but I think I can make better use of that money throughout the year than Uncle Sam, or Intuit.

    This is the argument I make with my wife, but she insists on taking steps to maximize our withholding so we get a big refund.

    She makes a good point — if you get a little more in your paycheck every month, it will just evaporate into the budget. But this is a little forced saving plan, in her mind, and — in her defense — we’re always very happy with a fat refund check, and we always do something good and productive with it.

    Yes, it defies logic, but it works.

  6. There are MANY online services that will prepare and eFile your federal tax return for free. You can find them linked from the IRS website. Most of these online services are trying to make money by charging for your state return after they do the federal return free. I don’t know what its like in other states, but here in Michigan, the state forms are almost absurdly easy (and it’s a flat income tax, so your refund or payment is always small), so I use a free online service for federal, and then do state myself.

  7. here in Michigan, the state forms are almost absurdly easy

    Our in South Dakota are pretty easy too. There’s no state income tax.

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