TurboTax takes a fee from your refund if you choose to have it deducted that way, but you can also pay out of pocket to keep your full refund
TurboTax charges for its software based on which version you use—Free, Deluxe, Premier, or Self-Employed. If you owe a fee and choose the refund deduction option, TurboTax will subtract that fee from your tax refund before the IRS sends it to you. The fee does not come out of your pocket separately; it comes out of the money owed to you. If you pay the fee with a credit card, debit card, or bank transfer instead, your full refund goes to you unchanged.
The amount you pay depends on which version of TurboTax you selected and whether you added services like audit defense or state return filing. The Free version has no fee. Paid versions range from roughly $60 to $120 for federal returns, plus additional costs for state returns if you file in more than one state.
Key Takeaways
- TurboTax's Free version costs nothing and has no refund deduction; paid versions charge a flat fee based on the version you choose.
- You can pay the TurboTax fee with a card or bank transfer and keep your full refund, or you can let TurboTax deduct the fee from your refund amount.
- The refund deduction option takes a few extra days because TurboTax must wait for your refund to arrive before it can subtract its fee.
- If you use the refund deduction option, you will see the fee amount clearly before you file, and you can change your payment method up until you submit your return to the IRS.
When TurboTax deducts its fee from your refund
The refund deduction option appears during checkout after you have entered your tax information. TurboTax shows you the fee amount and asks whether you want to pay now or have the fee taken from your refund. If you choose the refund route, TurboTax does not charge your card or bank account at filing time.
Instead, when the IRS processes your return and sends your refund, TurboTax intercepts that refund, subtracts its fee, and sends you the remainder. This process adds roughly 3 to 5 business days to your refund timeline because TurboTax must wait for the IRS deposit before it can process the deduction and forward your money.
You can change your mind about the payment method at any point before you electronically sign and submit your return to the IRS. Once your return is filed, the payment method is locked in.
Paying TurboTax out of pocket to avoid the deduction
If you pay TurboTax's fee directly—using a debit card, credit card, or bank account transfer—your full refund goes to you without any deduction. This is often the faster route because you do not have to wait for your refund to arrive before TurboTax can process the payment.
Paying out of pocket also means you keep the full refund amount the IRS calculated. If you were counting on that refund to cover bills or expenses, a direct payment preserves that money. The downside is that you must have the fee amount available in your account or on a card at the time you file.
TurboTax accepts Visa, Mastercard, American Express, Discover, and direct bank transfers. The payment is processed immediately when you file, so there is no waiting period.
How much TurboTax costs by version
| Version | Federal Return Cost | Who It Is For |
|---|---|---|
| Free | $0 | Simple returns: W-2 income, standard deduction, no investments or side income |
| Deluxe | Around $60–$75 | Homeowners, itemized deductions, education credits, child tax credits |
| Premier | Around $90–$110 | Investment income, capital gains, rental property, self-employment income |
| Self-Employed | Around $120–$150 | Business owners, Schedule C filers, quarterly estimated taxes |
These prices vary by year and promotional offers. TurboTax frequently discounts its paid versions during tax season, so the price you see at checkout may be lower than the standard amount. State return filing costs extra—typically $40 to $60 per state—unless you are in a state with no income tax.
If you add services like audit defense or prior-year return filing, those costs stack on top of your base version fee.
What happens if you cannot afford the fee
If the TurboTax fee is a hardship, the Free version is genuinely free and requires no payment at any point. It covers straightforward returns: W-2 wages, the standard deduction, and basic credits like the Earned Income Tax Credit or Child Tax Credit. If your return is more complex, you may need a paid version, but TurboTax often runs promotions that reduce the cost.
You can also file your federal return for free through the IRS Free File program, which partners with multiple tax software companies including TurboTax, H&R Block, and others. The IRS Free File version of TurboTax is available to people earning under a certain income threshold (the threshold changes yearly). This version has no fee, even if your return is more complex than the standard Free version allows.
Another option is to file by paper using IRS forms, which costs nothing but requires more time and manual calculation. The IRS also offers free in-person help through Volunteer Income Tax Assistance (VITA) sites in many communities.
How to see your TurboTax fee before you file
TurboTax displays the total fee during the checkout step, before you sign and file your return. You will see the version you selected, any add-on services, state return costs, and the total amount due. At that point, you choose whether to pay now or deduct from your refund.
If the fee is higher than you expected, you can go back and switch to a lower version—for example, from Premier to Deluxe—or remove add-on services. You can also remove state returns if you filed in multiple states and only need the federal return. These changes will lower your fee before you proceed to payment.
Once you have submitted your return to the IRS, you cannot change the fee or the payment method. So review the checkout screen carefully before you electronically sign.
Refund timing with the refund deduction option
If you choose to have TurboTax deduct its fee from your refund, expect an additional 3 to 5 business days compared to paying the fee upfront. Here is the typical timeline:
- You file your return with TurboTax and choose the refund deduction option.
- TurboTax submits your return to the IRS electronically (usually within 24 hours).
- The IRS processes your return and approves your refund (typically 21 days, but can be longer if there are issues).
- The IRS deposits your refund into the account you provided.
- TurboTax receives the deposit, subtracts its fee, and sends the remainder to you (adds 3–5 business days).
If you pay TurboTax upfront, you skip step 5, so your refund reaches you as soon as the IRS sends it—usually within 21 days of filing if you chose direct deposit.
Frequently Asked Questions
Can I change my payment method after I file?
No. Once you electronically sign and submit your return to the IRS, the payment method is locked. You must choose between paying now or refund deduction before you file. If you change your mind, you would need to file an amended return, which is not practical just to change how you pay a software fee.
Does the refund deduction option affect my refund amount from the IRS?
No. The IRS calculates your refund based on your tax information alone. TurboTax's fee is deducted only after the IRS sends the money. Your actual tax refund from the IRS is unchanged; you simply receive less of it because TurboTax takes its cut.
What if I use TurboTax Free—do I pay anything?
No. TurboTax Free has no fee at any point. You do not pay to file, and there is no refund deduction. The only catch is that Free is limited to simple returns. If your return is too complex, TurboTax will tell you that you need to upgrade to a paid version.
Can I get a refund of the TurboTax fee?
TurboTax offers a 60-day money-back may provide if you paid the fee upfront with a card or bank transfer. If you used the refund deduction option, you would need to contact TurboTax support to request a refund of the fee that was deducted from your refund. Refund policies can vary, so check TurboTax's current terms or contact their support line.
Is there a way to file for free if my return is too complex for TurboTax Free?
Yes. The IRS Free File program offers free software from multiple companies, including a version of TurboTax, for people below a certain income threshold. You can also use VITA (Volunteer Income Tax Assistance) for free in-person help, or file by paper with IRS forms. Check IRS.gov to see which option fits your situation.