First, be sure you are comparing the Desktop version in both cases. (Desktop is the version installed on your own computer from a CD or download; instead of using Turbotax Online which is web-based and can be used from any computer with a web browser.)
None of the products is showing $129; I am seeing $99 for Premier desktop, $59 for Premier Online, and $139 for Preimer Live Online. Live Online allows on-demand live chat with a CPA to help you, that is not included in the desktop program at all.
Turbotax online has different capabilities and pricing structure than Turbotax desktop (CD or download). In addition, third party retailers are allowed to sell the product at a discount if they want to, Turbotax is not allowed to set mandatory prices. And Costco is a special case because they make all their profit on membership fees and almost no operating profit on actual sales, so they price very aggressively to attract and keep members.
Here are the differences between the CD product (desktop) and the Online program.
Turbotax online is a different product from Turbotax Desktop (which comes as a download or CD to install on your own computer). They have different prices and different capabilities. The key differences are:
1. Most Turbotax desktop products include one free state module. With turbotax online, each state is $39 extra. (With turbotax desktop, e-filing a state return is an extra fee in most states, but it is still cheaper in the end than the online product. Or, you can avoid the fee by mailing your state return.)
2. Turbotax desktop allows direct access to all forms and worksheets. This is good for troubleshooting, error checking, and making manual adjustments in rare cases where they are needed. Turbotax online hides the forms and worksheets, and only allows you see them after you pay. The worksheets and forms are never directly editable.
3. Turbotax desktop version Deluxe and higher all include schedule C for self-employment, schedule D for investments and schedule E for rentals. The higher priced versions have more help and support, but the forms are available in the lower priced versions if you know what to look for. With turbotax online, you must upgrade to Premier or Self-Employed to get those forms.
4. With turbotax online, each tax return requires a separate user account and password and will charge a separate fee. Turbotax desktop can prepare an unlimited number of tax returns, with e-filing allowed for the first 5, all for the same initial price for the CD or download. (Each state e-file has a separate e-filing fee, but you can avoid that if you prefer to mail your state return.) Each return is in a separate document like having different Word or Excel documents. This allows to you prepare test returns for tax planning, or to prepare returns for family and friends (however, charging people to prepare returns in Turbotax is a violation of the license and of IRS regulations.)
5. With Turbotax online, your tax return is stored on Turbotax’s servers (in the “cloud”); with the desktop program, only you have copies. It can’t be hacked as easily, but you are responsible for your own backups and security.
6. Turbotax online can only be purchased directly from Turbotax. Discounts are not always available and the price goes up the closer you get to April 15. No matter what price you see advertised, the price you pay is only locked in when you actually file your return, or you can pay early to lock in the price and then return to work on your return. Turbotax Desktop can be purchased as a download from several discount retailers (like Staples and Amazon) and the CD can be bought from many more (including Target, Walmart, Costco, Best Buy); and usually at a significant discount compared to the Turbotax direct price. (But avoid web sites you've never heard of, they are probably selling pirated or infected copies.)
7. Turbotax Online offers Live help from a CPA (by chat) for an extra fee. This is not available with the desktop program.
I recommend the desktop version unless you qualify to file for free, or you want the Live Online assistance at extra cost.
If you want the features of Turbotax online your only supplier is direct from Turbotax. If you want the desktop installed program, buy wherever you get the best deal. The desktop program is superior as far as I'm concerned, unless you qualify to file online for free.
