Updated on Monday, December 23, 2024: Tax season is upon us once again and as always, TurboTax has rolled out several discounts tailored to different types of taxpayers. Whether you’re filing a simple return or navigating a complex financial situation, here’s a look at the top deals available today:
1. Extra 10% Off TurboTax Federal Products
Through January 31, 2025, TurboTax is offering an additional 10% off federal tax filing products purchased directly on the Intuit website. This discount stacks with early-season savings of up to 40%, making it one of the best deals for early filers. Note that this offer does not apply to state filings and cannot be combined with other promotions.
2. Free Edition for Simple Returns
For those with basic tax situations, TurboTax’s Free Edition allows users to file both federal and state taxes at no cost. It’s designed for straightforward returns, such as Form 1040 filings, and supports limited credits, including the Earned Income Tax Credit (EITC), Child Tax Credit, and Student Loan Interest Deduction. However, only 37% of taxpayers qualify for the Free Edition. It’s not suited for individuals with more complex tax scenarios, such as itemized deductions, business income, or investments.
3. 50% Off QuickBooks Solopreneur Bundle
For small business owners or freelancers, the QuickBooks Solopreneur Bundle is available at 50% off for the first three months. This promotion reduces the cost from $20/month to $10/month and is an excellent option for managing income and expenses in preparation for tax season.
4. TurboTax Freedom Edition for Military Members
Active-duty military personnel ranked E1 through E9 can file both federal and state taxes for free with TurboTax Freedom Edition. For higher ranks, TurboTax offers a discounted rate. Eligible users must provide a W-2 from the 2024 fiscal year to access the offer.
5. Discounts Through Financial Institutions
TurboTax continues to partner with banks and credit unions to offer exclusive deals. These discounts are typically accessible through the “deals” or “partnerships” sections of financial institutions’ online portals. If you’re a member of a participating bank or credit union, check your account to see if you qualify for additional savings.
No TurboTax Discount for Vanguard Customers in 2025
In previous years, Vanguard account holders benefited from TurboTax discounts as part of a collaboration between the two companies. Unfortunately, for 2025, no such offer seems to be available (the previous offer link no longer applies a discount). Vanguard customers are encouraged to check their online accounts for potential personalized offers, but there is no general promotion this year.
This change is significant because many Vanguard users rely on tax filing software like TurboTax to handle the complexities of reporting investment income, dividends, and capital gains. While the lack of a discount may be disappointing, Vanguard customers can still take advantage of TurboTax’s other promotions or explore other tax software options.
Vanguard: An Overview of the Investment Giant
History and Background
Vanguard was founded in 1975 by John C. Bogle, who aimed to create a client-focused investment company with low fees and straightforward solutions. Vanguard is best known for pioneering the concept of index funds, which offer a low-cost way to invest in a diversified portfolio of stocks or bonds.
One of the unique aspects of Vanguard is its ownership structure. Unlike most financial companies, Vanguard is owned by its funds, which are in turn owned by its investors. This structure eliminates conflicts of interest and allows Vanguard to prioritize long-term value for its clients.
Key Features of Vanguard
- Low Fees: Vanguard is synonymous with low-cost investing, offering some of the industry’s lowest expense ratios.
- Wide Range of Products: The company provides mutual funds, ETFs, IRAs, and 401(k) plans.
- Index Fund Expertise: Vanguard’s index funds and ETFs are among the most popular in the world, known for their reliability and cost efficiency.
- Retirement Planning: Vanguard offers extensive resources for retirement savings, including target-date funds and personalized advisory services.
How Vanguard Relates to Tax Season
Investing with Vanguard comes with tax implications, particularly for those holding taxable brokerage accounts or tax-advantaged retirement accounts. Understanding these implications can help you plan better for tax season.
1. Taxable Accounts
- Capital Gains: Selling investments for a profit triggers capital gains taxes. Long-term gains (held for over a year) are taxed at a lower rate than short-term gains.
- Dividends: Vanguard funds often distribute dividends, which are taxable. Qualified dividends are taxed at a lower rate than ordinary income.
2. Tax-Advantaged Accounts
- IRAs and 401(k)s: Contributions to traditional IRAs and 401(k)s may be tax-deductible, while earnings grow tax-deferred. Withdrawals in retirement are taxed as ordinary income. Roth accounts, on the other hand, are funded with after-tax dollars, allowing for tax-free withdrawals later.
3. Tax-Loss Harvesting
Investors can use losses from poorly performing investments to offset gains elsewhere in their portfolio. This strategy, known as tax-loss harvesting, is a way to reduce taxable income.
4. Tax Forms Provided by Vanguard
Vanguard issues several key tax forms, including:
- 1099-DIV: Reports dividends earned.
- 1099-B: Details capital gains or losses from asset sales.
- 5498: Summarizes IRA contributions.
These forms are available online and can often be imported directly into TurboTax or other tax software for easy filing.
How to Sign Up for Vanguard
Getting started with Vanguard is straightforward. You can open an account online by visiting their website, selecting the type of account you want (e.g., brokerage, IRA, or 401(k)), and completing the application process. You’ll need to provide personal information, such as your Social Security number, and fund the account with an initial deposit.
Pros and Cons of Vanguard
Pros
- Cost Efficiency: Vanguard’s low fees mean more of your money stays invested.
- Diverse Options: A broad range of funds allows investors to tailor their portfolios to specific goals.
- Reputation: Vanguard is widely regarded as a trusted name in investment management.
- Tax Advantages: Its tax-advantaged accounts and low-turnover funds help minimize tax liabilities.
Cons
- Limited Features for Active Traders: Vanguard is not ideal for frequent traders or those seeking advanced trading tools.
- Interface: Some users find Vanguard’s platform less intuitive compared to competitors.
- No TurboTax Discount in 2025: This change may frustrate investors accustomed to past benefits.
Maximizing Tax Season Efficiency with Vanguard and TurboTax
Even without a dedicated TurboTax discount for Vanguard customers in 2025, there are still ways to streamline tax season:
- Organize Tax Documents: Ensure all necessary forms, like 1099-DIVs and 1099-Bs, are ready before filing.
- Use TurboTax Import Features: TurboTax allows users to directly import Vanguard tax data, reducing the risk of errors.
- Consult Advisors: Vanguard’s financial advisors can help you optimize your portfolio for tax efficiency.
- Stay Informed: Take advantage of Vanguard’s educational resources on tax-loss harvesting and other strategies.
Our Final Thoughts
TurboTax’s 2025 discounts provide plenty of opportunities to save during tax season, even as Vanguard customers face the absence of a dedicated offer. By leveraging TurboTax’s integration capabilities and understanding the tax implications of Vanguard accounts, you can navigate tax season with confidence. While the loss of a Vanguard-specific discount may feel like a setback, the overall resources and support offered by both companies continue to make them valuable partners in managing your finances and investments.