TurboTax Online is a web-based program that is not installed on your computer.
TurboTax CD/downloaded versions are stand-alone programs installed on your computer. The installation may be done either by purchasing an actual CD from a brick and mortar store or by purchasing a 'download' directly from TurboTax (without an actual CD).
One important difference between the two options is that you can view all the tax forms included in your return when you use the CD/downloaded version versus the online version. With TurboTax Online, you can only preview your Form 1040 prior to paying the TurboTax fees.
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