When Absolute Zero Isn’t Absolutely Free

January 10, 2015 : H&R Block

Are you wondering – Is TurboTax Absolute Zero free? Well, let’s unpack that statement.

Free.

It has a sweet ring to it. And the synonyms to free are so fun. Nada. Zip. Zilch. Zero.

If you’ve been doing any Googling about tax prep this week, you might have come across that last one. Zero. TurboTax is offering Absolute Zero, which features a federal tax return and state tax return e-filed for free. “Totally free,” according to the company.

It’s a zinger, for sure. I bet it will make for a fancy marketing campaign, too. I’ll admit I drooled a little over those doughnut “zeros” yesterday (dang you, 2 p.m. energy slump). But I instantly had a cliché ringing in my ears, and I’m guessing you did too.

If it sounds too good to be true, it probably is.

There are a number of features and tax breaks that you will not be able to access in “Absolute Zero” until you pay TurboTax a fee. Here are some examples:

  1. You can’t transfer information from last year’s return, even if you filed it with TurboTax. You’ll have to start from scratch. Want this feature? Pay $34.99 for Deluxe.
  2. If you want to itemize deductions for medical expenses, job-related expenses or charitable donations, you can’t in Absolute Zero. That’ll be an upgrade to Deluxe for $34.99.
  3. You cannot take advantage of deductions related to your property, including the mortgage interest deduction or property tax deduction. That’s also a feature in Deluxe (pay $34.99).
  4. If you had unreported tip income, you will not be able to report it in TurboTax’s free version. That’s in Deluxe for, you guessed it, $34.99.
  5. If you work for yourself – maybe you are an independent distributor or self employed – you will likely need to file forms related to the use of your house for business and maybe even a Schedule C. Best case, you upgrade to Deluxe for $34.99 or, worst case, pay $79.99 for Home & Business.
  6. Have a Health Savings Account? Do not pass go. Just pay $34.99 for Deluxe.

See how that starts to add up?

I get it. Companies need to make money. After all, if my company didn’t make money, I wouldn’t get paid. But TurboTax seems to be encouraging you to: “Just check it out!” “It’s free!” “Give it a shot!” Then, once you spend your highly valuable time importing tax forms and filling out your data, they’re betting you will pay that upgrade fee to save yourself the headache of starting over.

In fact, they’ve been doing something similar with the TurboTax software products since November.

I’m not saying you have to choose H&R Block (bonus points if you do), but filing taxes can be confusing enough. So it seemed like it would be useful to have some background information before you jump on the “free” bandwagon. Happy filing!

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