When I began using TurboTax Online I never thought about what might happen if I had to file an amended return. Now that I need to do so for the 2009 tax year I wish I had installed the software on my own personal computer instead of trusting Intuit's cloud.
Here's the situation: The easiest way to file an amended return is to start with the original TurboTax data file. While the online version of TurboTax 2009 is no longer online, users can download and run the TurboTax 2009 software on their own personal computer at no additional charge.
Unfortunately, Intuit recently dropped the data files for the 2007, 2008 and 2009 tax years from its site.
That would be OK if TurboTax Online had prompted me to save a local copy of the data file when I created it. But while TurboTax Online does prompt users to download a copy of their tax return when you file, it saves the return as a PDF. It does not prompt you to save the return as a data file. And while there is a way to do so, it's not obvious that's what you're doing - at least in the 2010 version. If you're going to use TurboTax Online you need to know how to do this. More on that in a minute.
The consequence of not saving that data file is that I may have to recreate my 2009 return from scratch. This may not sound like a big deal until you have to do it. Think about the process you went through to create your original return, the answers to all of the questions. That's now unavailable to me. Yes, I have the hard copy of the return itself, but how I got there, that's the rub. Using TurboTax to recreate your original return so that every number matches up exactly can be a time consuming experience, especially if your taxes are at all complicated.
I am surely not the only one in this boat. According to a recent Wall Street Journal story, 24 million people used TurboTax last year to file their taxes, and most of them used the online version. Did most of them think to back up the data file, or even know how to do it if they did think about it? Probably not.
On the other hand, if you buy TurboTax software for your PC, at the end of the day you have both the tax return data file and the software that created it. If you need to you can go back and review all of the inputs you made that resulted in the finished return. The entire creation process is visible to you.
I am not saying that users should abandon TurboTax Online. But if you choose to use it you should make darned sure you download that data file.
What's especially bothersome is the fact that TurboTax Online doesn't publicize the fact that you can - and should - save a local copy of the data file as well as a PDF version, especially if Intuit does not plan to archive the data file for you.
While there are several places in the program where you can choose to save your return to your local computer, only one of those saves it as a data file - and it doesn't tell you that's what it's doing. According to TurboTax technical support, saving the return from the File tab or from the Print and Save tab will just create a PDF. The solution is to go to the Home tab, and select "Save return to computer." TurboTax won't tell you that it is saving your return as a data file rather than as a PDF. But you can check by going to the folder where you saved it and looking to see if the file name ends with the .taxYYYY extension.
Going forward it would be helpful if TurboTax 2011 would automatically offer to save the user's work in both PDF and .taxYYYY formats. And bring back the old tax returns, please.
But for 2009 I guess am out of luck. Or am I? Last week a helpful support technician at Intuit suggested that I wait and see if the 2009 data miraculously reappears. Apparently the data has been pulled off the site before, only to reappear again later. The 2011 version of TurboTax was slated to go online last Friday. Wait until about a month after that happens, he advised, and then check back. Last Friday was November 25th, so I'll be checking in again right about December 25th.
"They did that last year. I'm not guaranteeing it," the support technician said. On the one hand, Intuit never even kept old returns online before last year, he added. "But I'll give 2:1 odds that it will be there."
That would make for a very Merry Christmas indeed.
UPDATE: 12/7/11 -- TurboTax is now making changes and will start archiving tax data files for tax years 2010 and later, according to Bob Meighan, vice president, TurboTax. For more details -- and how to get .tax files for returns earlier than 2010-- see my latest post, Lessons from the cloud: How I got my TurboTax data back.