new pricing models for 2008 DIY tax software


M

Mark Bole

I was mildly surprised to see that Turbotax (Intuit) is implementing a
"pay per return" price in its 2008 desktop software. One federal e-file
(or print) is included, but finalizing (print or e-file) additional
returns is $10 a pop (for example, completing returns for dependent
children of the taxpayer). This is new.

The other two players in this oligopoly[1], Taxcut (H&R Block) and
Taxact, are not following suit (additional printed returns included at
no charge). All three products include one federal e-file in their base
price this year, which is new for Intuit. Additional e-files continue
to be charged separately for all three products.

Free File through the irs.gov web site still shows last year's
eligibility (AGI under $54K). The Free File Alliance agreement with the
IRS currently ends with the 2008 tax year (filing through Oct 30, 2009).

All of this information was gathered from each party's public web site,
no attempt to compare state filing products was made.

-Mark Bole

[1] my understanding, I don't have a cite.
 
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E

Ernie Klein

Mark Bole said:
I was mildly surprised to see that Turbotax (Intuit) is implementing a
"pay per return" price in its 2008 desktop software. One federal e-file
(or print) is included, but finalizing (print or e-file) additional
returns is $10 a pop (for example, completing returns for dependent
children of the taxpayer). This is new.
I am not sure if you are saying if this change is good of bad?

As far as I can see this is an improvement over last year for Turbotax
Deluxe which I have already downloaded and put to use. As I can recall _
I might be remembering wrong -- last year _every_ e-file cost $14.95
including the first one. This year the first return is e-filed for free
and additional e-files only cost $9.95 each. There is nothing in the
software that prevents me from locally _printing_ for record purposes or
paper filing as many returns that I wish.
 
M

Mark Bole

Ernie said:
I am not sure if you are saying if this change is good of bad?
I was trying to remain neutral, just reporting an interesting development.
As far as I can see this is an improvement over last year for Turbotax
Deluxe which I have already downloaded and put to use. As I can recall _
I might be remembering wrong -- last year _every_ e-file cost $14.95
including the first one. This year the first return is e-filed for free
and additional e-files only cost $9.95 each.
True, but the overall bundle price has gone up by about the same amount
as the previous initial e-file charged separately -- in fact TurboTax
explicitly promotes on their website how instead of charging separately
they now bundle the products AND the prices. It does not appear to be
any kind of discount from last year, except that additional e-files are
about five bucks cheaper.
There is nothing in the
software that prevents me from locally _printing_ for record purposes or
paper filing as many returns that I wish.

This is what I'm not clear on. From the web site, I was under the
impression that this is exactly what is no longer allowed -- you cannot
print a valid paper return for filing, after the first one, without
paying an additional charge. Are you saying you have the 2008 tax year
product already and this is not the case? (of course, whatever product
you have now surely is not valid for filing in any case). I suppose you
can still do draft returns and what-if returns, you just can't finalize
them with the extra charge (I wonder how that might apply to amendments
required for the initial return...)

If my understanding is not correct, then how exactly do you interpret
the new "pay per return" pricing? It can't just be, "pay for extra
e-file", because that is not new. BTW, Intuit's ProSeries product has a
"pay per return" option which applies to either e-filing or paper
filing, so my assumption was that the new Turbotax pricing was similar
to this.

-Mark Bole

ps. to the moderators -- I hope this is not considered too "off topic",
as I think it is of interest to the professional tax preparer community
at large, and in my initial post I tried to cover all the major players,
not just one specific product.
 
E

Ernie Klein

Mark Bole said:
Ernie Klein wrote:


This is what I'm not clear on. From the web site, I was under the
impression that this is exactly what is no longer allowed -- you cannot
print a valid paper return for filing, after the first one, without
paying an additional charge. Are you saying you have the 2008 tax year
product already and this is not the case? (of course, whatever product
you have now surely is not valid for filing in any case). I suppose you
can still do draft returns and what-if returns, you just can't finalize
them with the extra charge (I wonder how that might apply to amendments
required for the initial return...)
Of course the software that is now available is not the final version --
things might change.
If my understanding is not correct, then how exactly do you interpret
the new "pay per return" pricing? It can't just be, "pay for extra
e-file", because that is not new. BTW, Intuit's ProSeries product has a
"pay per return" option which applies to either e-filing or paper
filing, so my assumption was that the new Turbotax pricing was similar
to this.
I agree that the web site does state that additional final forms cost
extra e-filed _or_ printed.
 
D

Dick Adams

The IRS has made some of the seminars of the 2008
Nationwide Tax forums available online with audio
accompanied by closed captio, Power Point Slides,
and transcripts. And it's FREE at:

http://www.irstaxforumsonline.com

My favorite four letter words are Love, Free, and Cash.

Dick
 
E

Ernie Klein

Ernie Klein said:
Of course the software that is now available is not the final version --
things might change.
I am starting to like this less and less. Out of curiosity I put a
protocol analyzer on my internet connection and started TT.

Upon startup TT initiates a connection to "test.intuitempowers.com" and
uploads a great deal of data from my computer to intuit including a
"Cookie" containing encrypted data to
"/ttd_payment/inproduct_pricing_service.jsp".

Probably the serial number of the software is also transmitted along
with product status.

My guess is if you print a final return intuit will know about it
through this "phone home" mechanism. If you start TT with the same
serial number from that or any other computer a second return will be
denied -- assuming that either computer is connected to the internet
when TT is started.

This "phone home" connection is in _addition_ to the automatic check for
software updates which connects to a different location and can be
disabled (in preferences - at least in the Mac version).

I think TT is going to be leaving my computer - not that I mind the
extra $9.95 to e-file additional returns - but I don't want any software
in my computer that "phones home" upon launch with unknown (to me) data,
possibly about my tax information. It is probably all innocent data,
only intended to be sure I pay for the extra returns but I have no eway
of knowing that. I don't like this at all.
 
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A

AES

I was mildly surprised to see that Turbotax (Intuit) is implementing a
As far as I can see this is an improvement over last year for Turbotax
Deluxe which I have already downloaded and put to use. As I can recall _
I might be remembering wrong -- last year _every_ e-file cost $14.95
including the first one. This year the first return is e-filed for free
and additional e-files only cost $9.95 each. There is nothing in the
software that prevents me from locally _printing_ for record purposes or
paper filing as many returns that I wish.
Could I ask: Do these (and other) DIY tax packages come with fully
adequate manuals or user guides -- preferably on paper, or alternatively
as PDF files -- either in the original package, or downloadable from the
vendor?

And are there also any third-party books or manuals for the same
packages (e.g., something like "Turbotax for Dummies") that are
developed and sold by third parties?
 
G

Gil Faver

Mark Bole said:
I was trying to remain neutral, just reporting an interesting development.


True, but the overall bundle price has gone up by about the same amount as
the previous initial e-file charged separately -- in fact TurboTax
explicitly promotes on their website how instead of charging separately
they now bundle the products AND the prices. It does not appear to be any
kind of discount from last year, except that additional e-files are about
five bucks cheaper.



This is what I'm not clear on. From the web site, I was under the
impression that this is exactly what is no longer allowed -- you cannot
print a valid paper return for filing, after the first one, without paying
an additional charge. Are you saying you have the 2008 tax year product
already and this is not the case? (of course, whatever product you have
now surely is not valid for filing in any case). I suppose you can still
do draft returns and what-if returns, you just can't finalize them with
the extra charge (I wonder how that might apply to amendments required for
the initial return...)

If my understanding is not correct, then how exactly do you interpret the
new "pay per return" pricing? It can't just be, "pay for extra e-file",
because that is not new. BTW, Intuit's ProSeries product has a "pay per
return" option which applies to either e-filing or paper filing, so my
assumption was that the new Turbotax pricing was similar to this.
I read what you read, Mark, from the Turbotax web page:

"You can use TurboTax CD/Download to prepare additional returns. It's just
$9.95 to prepare, efile, and/or print each additional federal return. You
pay only when you're done preparing each return and are ready to file."

sounds to me like printing an additional federal return cost $9.95. Ernie,
what happens when you try to print an additional federal return?
 
H

Han

There is nothing in the
software that prevents me from locally _printing_ for record purposes or
paper filing as many returns that I wish.
That is apparently the question. From the wording I read here and at the
TT website, it /appears/ that every return is charged for. How that is
programmatically controlled, I have no idea.
 
J

JoeTaxpayer

Dick said:
The IRS has made some of the seminars of the 2008
Nationwide Tax forums available online with audio
accompanied by closed captio, Power Point Slides,
and transcripts. And it's FREE at:

http://www.irstaxforumsonline.com

My favorite four letter words are Love, Free, and Cash.
Did Beer fall off the list? :p
(Happy Thanksgiving to All, by the way)

Joe
 
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J

JoeTaxpayer

AES said:
Could I ask: Do these (and other) DIY tax packages come with fully
adequate manuals or user guides -- preferably on paper, or alternatively
as PDF files -- either in the original package, or downloadable from the
vendor?

And are there also any third-party books or manuals for the same
packages (e.g., something like "Turbotax for Dummies") that are
developed and sold by third parties?
TurboTax used to come with a small manual, hasn't for a few years now.
The help is within the program, and I've found it to be pretty good.
My TT complaints used to be regarding the cost difference between the PC
and Mac versions, they are now both on the disc. My issue 2 years back
was that the software I mail ordered would come weeks after I saw it hit
the shelves. So now I buy it at brick and mortar stores, tomorrow, and
get a head start.
Joe
 
M

Mark Bole

TurboTax used to come with a small manual, hasn't for a few years now.
The help is within the program, and I've found it to be pretty good.
It varies from year to year and product to product, but in general I
agree that Turbotax embedded help files are pretty good at providing
guidance, if you have the patience and expertise needed to use them.

-Mark Bole
 
A

Arthur Kamlet

The IRS has made some of the seminars of the 2008
Nationwide Tax forums available online with audio
accompanied by closed captio, Power Point Slides,
and transcripts. And it's FREE at:

http://www.irstaxforumsonline.com

My favorite four letter words are Love, Free, and Cash.

Brand new bride calls her mother after a few weeks complaining
that married life is terrible. He's started using those terrible
four-letter words. Words like wash, iron, cook, ...
 
E

Ernie Klein

Gil Faver said:
sounds to me like printing an additional federal return cost $9.95. Ernie,
what happens when you try to print an additional federal return?
Keep in mind that I am using a Mac so the operation on a PC may be
different. I am not saying that the software is defective, I am only
reporting the tests that I made and the result that I observed. There
will probably be several updates to TT before April, and the State
returns will not be released until January or so, so the following
observations may be different by then.

1. I installed a firewall block to prevent any connection from TT to
"test.intuitempowers.com" so that any test action I took would be
unknown to that server.

2. I made a dummy 1040 and tried to print a return for filing which
printed with a big red banner saying "FORM NOT FINAL - DO NOT FILE"
which I knew would happen because at this time of year nothing is final
and cannot be filed.

3. I quit TT then restarted, made a 2nd dummy 1040 return, and tried to
print for filing. I got a message "How do you want to pay your
preparation fee? - Before filing your tax return for mailing, you must
pay a preparation fee. Please choose a method of payment. - [Pay by
phone] [Pay Online] [Cancel]"

4. I again quit TT, restarted with dummy return #1 that printed the
first time and tried to print a second return for filing, i.e., as in
"real life" I found a mistake and wanted to redo before mailing. As
expected I got the _same_ pay up message as in #3 above so once you hit
the print for filing button, you can't even _reprint_ the first return
after correcting an error without paying.

5. I deleted the Mac file
(~/Library/Preferences/com.intuit.TurboTax.2008.plist) which put
everything back to normal. (I have no idea how you would get out of
this on a PC nor do I know if I could have backed out had I not blocked
the outgoing connection in step 1).

6. In case you are wonder what happens if I print the forms "For your
records" instead of "for filing" -- there is a big blue "DO NOT FILE"
message diagonally across each page.

Personally I think Intuit is in for a lot of flack and negative
publicity because of this choice. There is lots of room for honest
error and mistakes -- hitting the wrong button to print a return for a
pre-check and then learn you can't print again without paying, needing
to reprint to correct an error but can't without paying, etc.

The inability to print a "copy" of my return for my records that does
not have a big blue "DO NO FILE" printed across it, is not, in my
opinion, a real "copy" of my return. I would not want to walk into an
audit with it. Legally it might not matter but I prefer an actual look
alike, exact copy, of what I filed with the IRS, thank you. I am sure
that if I had to produce my return to obtain a loan or for other legal
reasons and I produced a return that said "DO NOT FILE" I would be told
that they want to see a "real" copy of the return that I did file.
 
E

Ernie Klein

Ernie Klein said:
6. In case you are wonder what happens if I print the forms "For your
records" instead of "for filing" -- there is a big blue "DO NOT FILE"
message diagonally across each page.
without paying, etc.

The inability to print a "copy" of my return for my records that does
not have a big blue "DO NO FILE" printed across it, is not, in my
opinion, a real "copy" of my return. I would not want to walk into an
audit with it. Legally it might not matter but I prefer an actual look
alike, exact copy, of what I filed with the IRS, thank you. I am sure
that if I had to produce my return to obtain a loan or for other legal
reasons and I produced a return that said "DO NOT FILE" I would be told
that they want to see a "real" copy of the return that I did file.
One more thing---

When you print the return for filing the software only prints those
forms required for filing. It will not print worksheets, supporting
details, etc.

You can only print that information if you choose the "Print Returns for
your Records" or "Print Selected Forms" options which both put the large
(1 1/2 inch high), block, "DO NOT FILE" message diagonally across the
page.

What I didn't note before, because I didn't look close enough at the
printed page, is that the DO NOT FILE message is not transparent. It
obscures the data under it. I defy you to tell if the entry 17056 is
17656 or 17856 because I can only make out part of the '0'. It could be
a 0 or a 8 or a 6. I sure can't tell. Thats just one example - I can't
be sure what much of the data was. And this is the _only_ paper record
of your return and supporting data that TurboTax will allow you to
print. It is useless if you can't read the numbers. If this is what
Intuit intended, it is as useless and as unreadable as a blank page.
 
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D

Dick Adams

Brand new bride calls her mother after a few weeks
complaining that married life is terrible. He's
started using those terrible four-letter words. Words
like wash, iron, cook, ...
Looks like he thought he was marrying to get another
four-letter word "Maid".

If he thought she was a maid who does taxes, this won't
be off-topic. ;)

Dick
 
V

Vic Dura

I think TT is going to be leaving my computer - not that I mind the
extra $9.95 to e-file additional returns - but I don't want any software
in my computer that "phones home" upon launch with unknown (to me) data,
possibly about my tax information.
I dumped TT for TaxAct five years ago (when they tried to implement
that hideous copy protection scheme) and haven't looked back. For my
needs TaxAct is much easier and less intrusive to deal with, and
continues to improve each year.

The only Intuit product I allow on my computer is Quicken v6.0 which
runs just fine on WinXP.
 
S

Stuart A. Bronstein

Ernie Klein said:
The inability to print a "copy" of my return for my records that
does not have a big blue "DO NO FILE" printed across it, is not,
in my opinion, a real "copy" of my return. I would not want to
walk into an audit with it. Legally it might not matter but I
prefer an actual look alike, exact copy, of what I filed with the
IRS, thank you. I am sure that if I had to produce my return to
obtain a loan or for other legal reasons and I produced a return
that said "DO NOT FILE" I would be told that they want to see a
"real" copy of the return that I did file.
There are programs (I have a free one for the PC and I've seen them for
the Mac) that, when you tell it to "print" will make a pdf. I imagine
you'd be able to print all the copies of the pdf you want without
intuit being notified.

This does not solve the error correction problem, of course.

Stu
 
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G

Gil Faver

Stuart A. Bronstein said:
There are programs (I have a free one for the PC and I've seen them for
the Mac) that, when you tell it to "print" will make a pdf. I imagine
you'd be able to print all the copies of the pdf you want without
intuit being notified.
I bet not. Or, I bet that pdf file will have a legend "DO NOT FILE".
Somebody give it a try . . .
 

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