TurboTax has been around for more than 20 years, and it grew in popularity largely because it is reasonably priced, user friendly, and just works. A key factor in its success has also been its consistency. If you do something once a year, it’s nice to know you don’t have to relearn it every year. It should come as no surprise, then, that many have been using TurboTax for more than a decade.
Signs of rebellion
Apparently, that popularity changed this year. It started out as a trickle of negative product reviews on Amazon last November. To get an idea of the change, compare the consumer ratings on Amazon for the 2013 and 2014 versions of the same product:
Why the brouhaha?
TurboTax started out as a single product but, over time, has evolved into a range of products, with prices ranging from about $35 for the Deluxe version (its most popular) to $80 for the version called “Home & Business.” (There are additional costs for state filings for all products.) As with most product ranges, the more you want, the more you have to pay. TurboTax customers understood that system and, for the most part, were loyal customers that happily bought the software year after year, as their 2013 ratings imply.
Specifically, TurboTax Deluxe was popular with filers who needed to file specific forms like Form C, D or E, usually because they had some side income. This year, though, Intuit removed those forms from the Deluxe product without telling customers. The only warning customers received was a vague statement to the effect that “some changes” were made.
The only time filers found out their forms were missing was after they had purchased the software and were halfway through their filing. But by then the product was non-returnable.
As several customers noted, if all Intuit wanted to do was raise prices, they would have been okay with that if the change would have been clear up front and they would have had the opportunity to make an informed decision. However, when they discovered they had been tricked into having to buy a $30 upgrade, with no explanation as to why, they responded with outrage and anger. Hell hath no fury like a long-time, repeat customer scorned.
Consumers left to find other options
Initially, Intuit tried to address the criticisms with soft-pedaled words, which unfortunately added fuel to the fire. At this time, the criticism has escalated to the point of raucous rebellion, reverberating all across the mainstream media even. You only need to google “TurboTax controversy” to understand why Intuit went so far as to issue a public apology, complete with promises of refunds and the possibility of free upgrades.
Clearly, Intuit underestimated the betrayal their customers felt, though, as the aforementioned apology and $25 refund offer apparently come with strings attached. The net effect is that, in the future, customers will be forced to buy a product costing almost double what they are used to.
That’s when those offended customers started exploring their options, which boil down to:
1. Grin and bear it, and resign yourself to paying almost twice next year. And furthermore, resign yourself to the fact that Intuit, being a classic American corporation, will keep trying to find ways to make more money off you one way or another, meaning the cost of this route will continue to go up in the future.
2. Turn to a competitor, such as H&R Block or TaxACT. H&R Block has already offered disgruntled TurboTax customers free software with proof of TurboTax purchase and, if recent consumer reviews on Amazon are to be believed, many are taking advantage of that offer and discovering that change is not as painful as they expected.
3. Turn to a brick-and-mortar-tax-preparation professional, be it an accountant, friend or H&R Block (the brick- and-mortar version).
4. Do it themselves.
No matter what, tax filing is not going to become easier anytime soon. Intuit and other similar corporations have spent millions lobbying against all government programs which seek to simplify filing. (Kind of ironic, isn’t it: charging you more so they can pay more to Congress to make sure you will need to buy their products? America, the beautiful …)
Are you affected by the TurboTax changes? If so, which of the four options above will you adopt? If not, how do you prepare your taxes each year?
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