Nearly 50% of all Americans prepare and file their own taxes each year.
This number is increasing because tax preparation software like Credit Karma Tax and TurboTax 2020 are reducing the barriers to self-prepared returns.
But, which is better – Credit Karma Tax or TurboTax 2020?
It depends.
Credit Karma Tax is better if:
- You take the standard deduction or
- You itemize just the common things like mortgage interest, student loan interest and education expenses
- You are really strapped for cash and need a solid free tax preparation solution
Check out Credit Karma Tax now.
TurboTax 2020 is better if:
- You are a business owner even if that is ownership of just a single rental property or
- Have any non-traditional tax situations like foreign income or complicated investments
Check out TurboTax 2020 now.
Let’s look at both TurboTax and Credit Karma Tax side-by-side to see why we make these recommendations.
Are Credit Karma Tax and TurboTax truly free?
Credit Karma Tax. Yes. No upsells. No additional fees. If Credit Karma Tax can handle your tax situation, then you will prepare and file federal and state returns totally free.
TurboTax. Not necessarily. They advertise a $0 product for federal and state returns, but those freebies are the just the most basic returns. Once you need an additional form included with your return, then it’ll cost you. What I don’t like is that there isn’t up front transparency about how much your return will cost as it is an ala carte type pricing model based on the complexities of your individual situation.
Can Credit Karma Tax and TurboTax handle my tax situation?
Credit Karma Tax. Maybe. Credit Karma Tax can handle a variety of tax situations beyond the most basic, but not as many as TurboTax. Standardized deduction and common itemized deductions are simple for Credit Karma Tax, but once you get into business deductions, even rental properties, TurboTax is more equipped.
TurboTax. Probably. As the market leader in DIY tax preparation software, TurboTax can handle many, many tax situations, but not every one. The good news is you don’t pay until you file your return so you aren’t financially committed if it wont work for you.
Are Credit Karma Tax and TurboTax easy to use?
Credit Karma Tax. Yes. If you are new to Credit Karma Tax you can upload a pdf of your previous year’s tax return and it will auto-populate some of the data input fields for you. Everything is written in a common person’s language, well, as much as IRS-speak can be translated into common person-speak.
TurboTax. Mostly. I find some of TurboTax’s explanations and questions during the preparation process to be a little confusing. Maybe, I am just over thinking things, but I sometimes wonder, “does that mean THIS or THAT?”
Can I file my tax return on my mobile device or tablet with Credit Karma Tax and TurboTax?
Credit Karma Tax. Yes. If Credit Karma Tax can handle your tax return, then you can use their app to prepare your return and file it.
TurboTax. Probably. The most complicated tax situations require you to use a desktop version of TurboTax.
Can Credit Karma Tax and TurboTax staff help answer my tax questions?
Credit Karma Tax. No. If you consider a knowledgebase of articles written by staff to be “staff help answering my tax questions” then sure, they can help.
TurboTax. Yes. TurboTax has live support, plus a knowledgebase of articles. But, like anything with TurboTax you pay for live support. (For a limited time, a free expert review of your return is free for those with the most simple tax situations)
Is Audit Defense included free with Credit Karma Tax and TurboTax?
Credit Karma Tax. Yes. Consistent with their “no upsell” approach, Credit Karma Tax includes Audit Defense on every return prepared and filed with them.
TurboTax. No. Consistent with their “nickel and dime you” approach, TurboTax, charges you for AuditDefense.
Can I trust Credit Karma Tax and TurboTax with my sensitive information?
Credit Karma Tax. Yes. Credit Karma Tax was recently acquired by Cash App whose parent company, Square, probably powers the checkout at your local coffee shop or farmer’s market vendor. These are reputable financial brands that I trust.
TurboTax. Yes. Owned by Intuit which is the brand behind many strong financial products like Quickbooks, the long-standing accounting software, I trust TurboTax.
I hope our analysis helps you decide which tax preparation software is best for you – Credit Karma Tax or TurboTax. Either way, happy filing!
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