While you technically can install TurboTax onto a portable drive (like an external hard drive or flash drive), the program won't work properly once the drive is removed. We don't recommend installing your TurboTax program onto portable drives.
TurboTax, like most other Windows-based programs, creates entries in a database called the registry, which tells Windows where to find programs. Removing the drive breaks that path, resulting in anything from error messages to strange or missing functionality.
If you install TurboTax onto a portable drive, TurboTax will run properly as long as the portable drive remains attached to the computer.
Don't confuse your tax data (.tax) file, which contains your tax return information, with the TurboTax software, which creates and edits the tax data file.
You can save your tax data file to a portable drive. For added security, consider password-protecting your tax return by opening it and choosing Password... from the File menu.