In January, we were the first to call national attention to TurboTax’s nasty and inconspicuous ploy of stripping its flagship desktop income tax preparation software of key tax forms, thus forcing long-time users to upgrade to significantly more expensive versions. (See series of Mouse Print* stories.) Customers were livid and nearly 3000 of them posted one-star reviews on Amazon.
Major media picked up on the story, and after three weeks of a public pummeling, Intuit, the maker of TurboTax, finally relented (after some half-hearted attempts to satisfy customers) and offered free upgrades to everyone.
Then came the revelation that crooks were claiming income tax refunds via TurboTax’s online software before their rightful owners could. Some states temporarily stopped accepting TurboTax returns. The FBI, Congress, and the FTC all launched investigations. And Intuit finally strengthened verification of identities on its website. This dual onslaught of negative press spanned most of January and February.
One would think with the crushing and sustained negative publicity the company received over this period in the height of tax season that their sales would surely plummet. After all, consumers were mad as hell about the costly upgrades being forced on them, and worried as hell that TurboTax online was facilitating theft of their tax refunds.
According to Streetinsider.com, however, TurboTax desktop sales dropped only 6% or about 300,000 units, but online sales surged by two and a half million additional tax returns.
MOUSE PRINT*:
It is unfathomable to MrConsumer that millions felt more comfortable with TurboTax online this year than last, and that only relatively few abandoned the company’s desktop product. Wasn’t anyone paying attention except the two people who sued Intuit last week? Are all the alternatives just not up to the task? Or were those extra 2.5 million returns all filed by crooks?
Sorry, Mr. Consumer. I realized long ago that consumers felt more comfortable with their ignorance than they did being knowledgeable about products. I would only use the free version of Turbo Tax since my tax returns are relatively simple, but if I had to pay I would have tried another product.
Your work is not in vain, though. People like me visit seek out webistes like Mouseprint to stay informed about the latest market trends and deceit to look out for.
Intuit pushed TurboTax in a huge number of stores and other venues (USAA for one). It was extremely easy to buy it and most folks, I believe, just took the easy route. I have sent complaints to the pushers where I could. If enough more people did this, the pushers would have 2nd thoughts. This is strike 2 on Intuit – after the hidden bomb in the software a few years ago. I am not hopeful.
Since I have always used the Premier version of TurboTax the shenanigans they pulled with the lower priced one had no impact on me. I’ve used this product for years and it has worked well for me. Taxes are difficult enough and until I have a more compelling reason to change I will stick with the product that I am accustomed to and works for me. This doesn’t necessarily mean that I approve of Intuit’s business practices, but as far as I can see all the alternatives have problems of there own and, regardless of their business practices, the TurboTax software is still, from virtually all the annual reviews comparing tax software, the best one out there for doing your taxes. Perhaps if I was choosing a software package for the first time I would look more closely at the other products, but for now I am invested in TurboTax and as long as it works for me I see no reason to change.
The masses are uninformed idiots and prefer to stay that way. Look at the approval and re-election rates of elected representatives for proof.
I have used TurboTax for many years. The software has greatly simplified my tax preparation, and it costs considerably less than having an accountant wrestle with the details. I started using TurboTax long before I started disliking its parent company. After Intuit’s sneaky fiasco earlier this year, I disliked the company even more. Their tactics did not affect me directly, since I’ve been using their Premier version for several years. However, I was mad enough to consider changing to someone else’s product. So why didn’t I?
Well, I just didn’t want to take a risk that someone else’s product would fail to import my information from previous years. I know their literature says that their product will take information from TurboTax, but if things didn’t work out, or if there were complicated work-arounds, I’d be spending a lot of extra time at a task that already is onerous enough.
Somewhat akin to this is the fact that I am familiar with the way TurboTax works, and I’m not a great fan of learning new software.
Maybe I’m gutless. If one despises a company, ideally one should not buy its products. My only real revenge against Intuit and its nefarious business practices it that, if asked, I would recommend that a first-time user of tax preparation software purchase something other than TurboTax.
For the first time in many years I did not do my taxes with Turbo Tax this year. I was nervous after reading all your articles about them, so I did mine through my state income tax website. Worked just fine and I didn’t have to pay anything.
These numbers don’t mean anything without comparable numbers of other online tax products. If everyone else showed an increase of more than 8%, then that shows TurboTax didn’t experience the same growth as others.
If an industry is showing an increase but one of the options isn’t showing as strong an increase, then that’s effectively a loss to TurboTax.
I, for one, took this year’s TurboTax fiasco as an excuse to finally investigate what else was out there. I’d been using TurboTax (Online) for years, but what was getting to me was the price (especially given that I have fairly simple taxes, but still have to pay to get such basic functions as “import data from last year”). In the end I used TaxAct (Online) this year and paid less than half what I’ve been paying for TurboTax. It wasn’t quite as polished as the TurboTax experience, but it still did what I needed it to do, so unless something changes I plan to continue with TaxAct in the future.
That last line is one of the most important bits, though. When I researched reviews of the big three, most of the reviews agreed that TurboTax has the smoothest UI of the group. The UI for TurboTax is really good at walking you through everything and explaining what options you should choose. The TaxAct UI is good, it just isn’t quite “TurboTax good”. Also keep in mind that my taxes are fairly simple (usually resulting in a 1040EZ after I go through the wizard), so I can only imagine this is amplified for someone with more complicated tax scenarios.
I have used the desktop Premier version of TurboTax for years and chose it again eyes wide open to the problems with the false filings — which were specific to the online version — the funny-business they had with the lower priced versions, as well as having to go to third-party merchants to get a discount that Intuit did not offer to long-time customers.
So why stick with them? Good value compared to other options. Other preparation software could not handle the sophistication I needed. The user-interface remains simple even as it handles complex tax issues. An accountant would have costed 3-5 times as much while requiring I compile the information in much the same manner as TurboTax.
So, to each their own.
In the meantime, I expect desktop sales to continue to decline year-to-year as more people switch to mobile platforms for their basic needs.
Unfortunately too many consumers don’t pay attention. That’s why companies get away with so many of the things you write about. I can’t even guess the ratio of suckered consumers to the ones who know what they are doing.
That’s because people are idiots, they see their name in the news everywhere so they buy the service. No news is bad news….
I used TT for a decade, but I switched for TY 2014 to H&R Block. It imported all my old information from TT without any problem. H&R wasn’t any harder to use than TT, although it took a few minutes to learn the new software. Parts of H&R were better. The only thing that was worse was the tax estimator for next year. H&R’s was useless, but TT’s was at least functional. Anyway, I am happy that I switched. I saved more than $50 dollars doing so. And I used my state income tax website facility so that I didn’t have to pay extra for a state program. It took me about ten minutes to do the state form once my federal form was done. My total tax software cost was $19.95.
I was happy to get the heads up from Mr. Consumer and decided to research some other methods, but many of them wanted me to pay up front so I couldn’t get a good feel for how they would work out ahead of time. I do like the TurboTax Online method of only paying when it’s time to file, plus my cost did not change and, as usual, I was able to write off the cost anyway.
I was long time TT user and sometimes bought Premier and sometimes Deluxe depending on my tax situation. This year I used both TT and HRBlock to see if I wanted to change perm to HRBlock. I did like Turbo slightly better (more import financial companies), but not enough better. So I filled using HRBlock…of course, it was an extension and so far have gotten 2 corrected 1099. It never pays to do taxes too early!
So I’ve read all the comments from those folks calling those of us who stuck with TurboTax ignorant and idiots and uninformed. I know some good names too, but out of respect for Mr. Dworsky I will politely keep them to myself. I suspect that if I was to do an investigation of your lives I would find that you also buy products and services from companies that are questionable in one way or the other. How many of you have refused to order anything from Amazon until they improve their employment practices? Are you still subscribing to Comcast? How about those bank accounts with Citi and Bank of America? Pointing fingers and calling people names accomplishes nothing and usually indicates a good amount of hypocrisy. There have been problems with Intuit for years and no one has been more aware of that than those of us who use their products. That doesn’t change the fact that for all of the company’s issues some of their products are excellent. Those of us who use those products will decide for ourselves whether or not to continue using them and we will base those decisions on our needs – not your bullying. By all means – DO NOT USE INTUIT PRODUCTS IF YOU DON’T WANT TO – but stuff the name calling.
Edgar replies: Some of you may wonder what MrConsumer did this year. Although Intuit gave me my money back, and a free upgrade, out of principle, I got H&R software. Initially, it was okay, but them I discovered that it did not import eveything from TT, like prior details of Section 179 deductions. Over my dead body was I going to back through prior returns to figure out when and if and hiw I deducted my prior computer. So, reluctantly, I went back to TT.
I do agree with Jim, however, that we need to keep the discussion civil.
I was one of those that got hit. My wife gets some royalties from a gas well in TX. Last year this amounted to about 150.00. However this need to be reported to the IRS. As Taxes not taken. Total amount of taxes owed was 22.00. Had I not gotten the free upgrade. I would have just gone out and got the competitors. The upgrade price would be one third of the amount that we received I would pay the upgrade price if it had been several thousand. I would go for it. For taxes on 150.00. Time to go looking
FWIW, I’ve been using H&R Block software for several years, after jumping ship from TurboTax the last time they pulled some shenanigans. Don’t ask when, as I’m too old to remember or care.
This year the Deluxe Federal Version cost me $10.79 including five free electronic filings.
My taxes have never been complex, but this year I was glad to have the support and guidance of the software when trying to wade my way through the extra reporting requirements of the Affordable Care Act. Without that support I would have totally missed an extra $602.00 premium overpayment refund.
Perhaps others flocked to software and/or online reporting choices for this same reason, and, amazingly enough, the majority of them were probably not as well informed as you about the TurboTax “scandal”.
It’s so easy to judge others from your high horse, isn’t it?
I’ve been a TT user since day 1. I’m a career tax dude and current VITA volunteer and often reviewer, so I have some tax smarts and return feel. One year I shifted over to HRB. Not quite the same thing.
This year, the surprise when I was forced to use a higher priced version. Seriously, I know that the 8949 process is complicated, but 200% more complicated and software developer needed than 2013 return version???
I really need a software return because I just plain have a complicated return (everything but earned income). So, for our 2015 return, I will be looking at the likely 90-100% best product. I have “TaxWise” at the tax location, but I cannot lock out others for privacy, I believe.
Righteous indignation aside, the essence of a business transaction is best value obtained for the cost. I dislike Intuit for a variety of reasons, but in the end TT best meets my needs and minimizes my tax preparation pain. Suck it up and drive on!
I never saw this until I had already done mine!
Well, I would take any info from Intuit with a grain of, wait, make that a ton, of salt. First, the major issues affecting the consumer backlash were related to the desktop version; which shows a sales decrease. I suspect that it may not include all the units sold that were returned by customers. As such, the actual net sales may be far less than the -6% reported.
Second, the dramatic -11% in the free file alliance does show that taxpayers, even those who can get free software via the alliance, were abandoning Intuit.
Third, the on-line sales figures that show +9% are, I believe, misleading. Intuit introduced free mobile e-filing for very basic returns. Snap a picture of your W-2 and away you go. None of these taxpayers were affected by the backlash issues, and Intuit generated little profit from them. So, while more folks may have used their very basic on-line filing, I doubt that this was a money maker for them; espeically when, during this fiasco, they started giving free basic filing (which may also be why the alliance figures dropped and their on-line “sales” figures increased. That +9% figure does not translate to additional 9% profits, just younger filers who have had little to no experience with tax software and have very simple returns.
I believe that Intuit lost money and customers, and that these “unit sales” figures don’t even come close to telling the whole story of how this fiasco affected them.
Repeating what John said:
Since I have always used the Premier version of TurboTax the shenanigans they pulled with the lower priced one had no impact on me. I’ve used this product for years and it has worked well for me. Taxes are difficult enough and until I have a more compelling reason to change I will stick with the product that I am accustomed to and works for me. This doesn’t necessarily mean that I approve of Intuit’s business practices, but as far as I can see all the alternatives have problems of there own and, regardless of their business practices, the TurboTax software is still, from virtually all the annual reviews comparing tax software, the best one out there for doing your taxes. Perhaps if I was choosing a software package for the first time I would look more closely at the other products, but for now I am invested in TurboTax and as long as it works for me I see no reason to change.