When you use TurboTax Online you are using software on the TurboTax web site, and your tax return is stored on TurboTax's computers. The download that Amazon sells is desktop software that you install on your own computer. You do the work on your own computer, and your tax return is stored on your own computer
The biggest difference in features is that the desktop software has a forms mode that lets you see the actual tax forms while you are working on your tax return, and you can even make entries directly on the forms. In TurboTax Online there is no way to see most of the forms except by creating a PDF of the return. Forms mode also includes other features such as Data Source and QuickZoom that let you trace the data flow and see how numbers in the return were calculated.
With the desktop software you can prepare as many tax returns as you want, and e-file up to 5 returns. You can save multiple versions of a return with different names. A TurboTax Online account can only be used for one federal tax return and the associated state return(s). If you need to prepare another return, you have to use a separate account. TurboTax Online saves only the most recent version of your tax return. There is no way to save different versions, or to save a copy of a return with a different name. And all entries and changes are saved immediately and permanently. There is no way to exit without saving.
Only the Premium edition of TurboTax Online supports all forms and handles all tax situations. The lower editions lack certain forms. For example, you can't report investment sales (Schedule D and Form 8949) in Online Deluxe. You need Premium for that.
TurboTax Online shuts down shortly after the October 15 extended filing deadline. When it comes back up in early to mid December, it's only for the next tax year. So there's a period of about a month and a half or two months when you do not have access to your online return at all. After it switches to the next tax year in December, the only way you can access your tax return from the previous year is to download the PDF or the .tax20yy file. You can't open it to review the entries or manipulate it in any way. You are strongly advised to download both the PDF and the .tax20yy data file after you file your return and save them on your own computer in case there are any problems accessing the online copies.
With TurboTax Online your tax return is saved on the TurboTax computers. With the desktop software it is saved on your own computer, and you are responsible for making backup copies in case anything happens to your computer or the files you have saved. TurboTax does not have a copy of your tax return on its computers.
