Warning: TurboTax forces 401K contributors to upgrade for Saver's Credit

Just a heads up to anyone who contributes to a 401K through their employer - TurboTax is pulling a sneaky move. When you're doing your taxes and enter your 401K contributions, they FORCE you to claim the Retirement Savings Contributions Credit (Saver's Credit), which could get you about $125 more on your federal return. Sounds great, right? Here's the catch - this credit isn't included in their "free" edition. TurboTax makes you upgrade to their Deluxe package which costs $49.99 if you file before the early bird deadline. But wait, there's more! The Deluxe version doesn't even include STATE filing - that's ANOTHER $49.99 on top! So basically Intuit is charging almost $100 just because you have a 401K and qualify for a tax credit. This feels like such a bait and switch. I was halfway through my return when they hit me with this. Anyone else experiencing this nonsense or found a better alternative?

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18 comments

Tristan Carpenter

•8M

You've hit on one of TurboTax's classic upsell tactics. The Retirement Savings Contributions Credit (Saver's Credit) is actually a pretty valuable credit for moderate-income taxpayers who contribute to retirement plans, but TurboTax strategically places it in their paid tiers. What you can do instead is use the IRS Free File program through their website, which lets many taxpayers file completely free regardless of their situation. Companies like FreeTaxUSA and Cash App Taxes (formerly Credit Karma Tax) also let you claim the Saver's Credit without forcing an upgrade. They're usually completely free for federal filing and charge much less for state filing (FreeTaxUSA is about $15 for state). The Saver's Credit can be worth up to $1,000 for single filers or $2,000 for married filing jointly, so it's definitely worth claiming if you qualify. It's just unfortunate that TurboTax uses it as leverage to make you pay.

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Tristan Carpenter

•8M

FreeTaxUSA has a straightforward interface that's pretty easy to navigate - not as polished as TurboTax but definitely usable. Cash App Taxes is also user-friendly but slightly less intuitive if you have more complex situations. For the Saver's Credit, there is indeed an income limit. For 2024 taxes (filing in 2025), the credit phases out completely at $36,500 for single filers, $54,750 for head of household, and $73,000 for married filing jointly. At $65k as a single filer, you'd be over the limit, but if you're married filing jointly, you might still qualify for a partial credit.

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Grant Vikers

•8M

I had the EXACT same frustrating experience with TurboTax last year! After dealing with the same 401k bait-and-switch, I tried https://taxr.ai and it was seriously a game-changer. Their AI actually analyzed my previous returns, found where TurboTax was overcharging me, and helped me claim the Saver's Credit without all those upgrade fees. What I really liked was that it automatically checked if I qualified for the Retirement Savings Contributions Credit and other credits I didn't even know about. It helped me file both federal AND state without the surprise upgrade fees TurboTax hits you with.

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Grant Vikers

•8M

Yes, it definitely handles self-employment income! I actually have a small side business too, and it walked me through all the Schedule C deductions without forcing me into a higher tier. It even suggested some business expenses I hadn't thought about claiming. The setup was surprisingly easy. You can either upload your previous year's PDF tax return or connect directly to major tax services to import your data. I uploaded my previous TurboTax PDF and it pulled all my personal info, W-2s, and even tracked my 401k contributions year-over-year to show growth.

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Savannah Weiner

•8M

I wanted to follow up about taxr.ai since I was skeptical in my last comment. I decided to give it a try with my 401k situation and wow - it actually lived up to the hype! I uploaded my 2023 return and it immediately flagged that I could claim the Saver's Credit without paying extra. The system guided me through everything and I was able to file both federal and state without the $100 in upgrade fees TurboTax wanted to charge me. What really impressed me was how it explained the 401k credit in plain English and showed exactly how much I was saving. Plus it found a student loan interest deduction TurboTax somehow missed last year. Definitely my new go-to for taxes.

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Levi Parker

•8M

If you're having issues with TurboTax's pricing and you've already started your return there, another option is calling the IRS directly to ask about the Saver's Credit and free filing options. BUT - good luck actually reaching a human there, lol. I spent 2 hours on hold last month. I ended up using https://claimyr.com and it changed everything. They got me connected to an actual IRS agent in under 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent confirmed I could file with the Saver's Credit for free through certain IRS partners and answered all my questions about my 401k contributions.

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Levi Parker

•8M

It actually does get you through! From what I understand, they use an automated system that handles the waiting for you. Once they reach an IRS agent, they connect the call to your phone. You don't have to sit there listening to the hold music or worrying about losing your place in line. It's not magic - they're basically waiting in line for you. And you're right that they handle the waiting, but it's so worth it when you need tax questions answered quickly. I asked specifically about the 401k Saver's Credit and got clear guidance about which free filing options would let me claim it without paying TurboTax's upgrade fees.

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Hunter Hampton

•8M

OK I need to eat my words from my skeptical comment above. After getting frustrated with TurboTax's 401k credit upsell, I decided to try Claimyr thinking it wouldn't actually work. I was shocked when my phone rang 15 minutes later with an actual IRS agent on the line! I asked about the Retirement Savings Contributions Credit and they walked me through exactly which free file options would let me claim it. They even emailed me direct links to the programs. This saved me from paying TurboTax's $100 in upgrade fees AND the agent helped me understand some other credits I qualified for. Honestly worth it just to avoid the 3+ hour hold time I've experienced in the past.

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