Turbo Tax Is No Longer ‘Free’ – Here Are Services You (Still) Have to Pay For
The Federal Trade Commission (FTC) issued a final order on Jan. 22, that Intuit, the maker of TurboTax, engaged in “deceptive advertising in violation of the FTC Act.” It added that it “deceived consumers” when it ran ads for “free” tax products and services for which many consumers were ineligible.
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In turn, the FTC is now prohibiting Intuit from advertising or marketing that any good or service is free unless it is free for all consumers.
“Or it discloses clearly and conspicuously and in close proximity to the ‘free’ claim the percentage of taxpayers or consumers that qualify for the free product or service. Alternatively, if the good or service is not free for a majority of consumers, it could disclose that a majority of consumers do not qualify,” the FTC said in a statement.
The order also requires that Intuit clearly discloses all the terms, conditions and obligations that are required to obtain the “free” good or service.
As The New York Times reported, examples of ineligible taxpayers include those claiming mortgage and property deductions, charitable donations over $300, unemployment income, investment income, rental property income and certain education expenses. In addition, The New York Times noted that gig workers who reported income as independent contractors, including many delivery drivers, were also ineligible.
“The order also sends a message across industry – “free” means free – not “free for a few” or “free for some,” said Samuel Levine, director of FTC Bureau of Consumer Protection in a statement. “Businesses can expect an FTC enforcement action if they harness the power of “free” in the dishonest way Intuit did.”
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So How Much Does TurboTax Cost?
The only “free” option is for simple returns which are for the most basic filings and have “no added tax complexity,” according to the TurboTax website. The option includes easy import and error check, plus student loan interest and child tax credit deduction prompts.
The TurboTax Deluxe costs $39 for both federal and state taxes and is “right for homeowners and for maximizing deductions.” It also comes with a charitable donations calculator.
If your taxes include investment and rental properties, TurboTax Premier is the version to use. It focuses on investment and rental property income, accurate stock reporting and refinancing deductions. It costs $89 to file federal taxes and $39 for state taxes.
Freelancers, independent contractors and other self-employed persons should use the TurboTax Self-Employed option. This filing plan costs $129 for federal taxes and $39 for state taxes.
The FTC had already sued Intuit in March 2022, claiming that it was deceiving consumers with “bogus advertisements pitching ‘free’ tax filing that millions of consumers could not use,” as GOBankingRates previously reported.
At the time, the FTC said that most tax filers couldn’t use the company’s “free” service because it was not available to millions of taxpayers, such as those who get a 1099 form for work in the gig economy, or those who earn farm income. In 2020, for example, approximately two-thirds of tax filers could not use TurboTax’s free product, the FTC said in the release at the time.
Intuit, the maker of TurboTax tax filing software, will pay a $141 million multi-state settlement “for deceiving millions of low-income Americans into paying for tax services that should have been free.”
In May 2022, following an investigation by New York Attorney General Letitia James, Intuit agreed to pay a $141 million multi-state settlement “for deceiving millions of low-income Americans into paying for tax services that should have been free.” In addition, the company was ordered to suspend TurboTax’s “free, free, free” ad campaign, New York Attorney General Letitia James announced on May 4 of that year.
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This article originally appeared on GOBankingRates.com: Turbo Tax Is No Longer ‘Free’ – Here Are Services You (Still) Have to Pay For
