How Much Does It Cost to Build An App Like TurboTax?

Building an app like TurboTax revolves around more than just offering users a platform to file taxes; it requires meticulous attention to detail, integrating deep financial systems, ensuring secure data practices, and adhering to complex regional and federal tax regulations. TurboTax, a leading tax prep app by Intuit, simplifies tax filing for millions of users by automating income tax filings through advanced tax calculations, user-friendly interfaces, and seamless integration of financial data. But the real complexity lies under the hood.

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From ensuring IRS compliance to handling sensitive financial information securely and offering real-time tax updates, there's more than meets the eye when it comes to assessing the app development cost of building a similar tax preparation tool.

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In this article, we will outline the relevant factors to consider when estimating the development costs of an app like TurboTax, including platform choices, features, legal compliance, integration points, and more.

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Platform and Device Compatibility

When developing a tax-filing app like TurboTax, one of the first crucial decisions you’ll face is which platforms you should build the app for—iOS, Android, or both. This choice will significantly affect overall app development costs, particularly in the U.S., where mobile usage is skewed toward iOS, but there’s still a considerable audience on Android.

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iOS vs. Android:

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iOS: In the U.S., iOS users dominate the market for premium apps such as TurboTax, thanks to the higher purchasing power associated with Apple users. Development for iOS may be simpler, as variations in device models are fewer compared to Android, but this also means greater expectations from users in terms of performance and interface design. The App Store’s strict guidelines also mandate further testing and compliance, which can impact development costs.

Android: On the flip side, Android app development needs to accommodate a large variety of devices, which can add time and complexity to the process. Given Android's global share—and its significant chunk of the U.S. middle-class market—you can’t overlook Android support, especially with millions of U.S. taxpayers needing access.

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Cross-platform or Hybrid Development: A TurboTax mobile app or equivalent could benefit from a cross-platform approach using technologies like React Native or Flutter. While native apps are known for better performance, hybrid solutions provide cost efficiency by enabling code-sharing across platforms, meaning you can develop for iOS and Android with a single shared codebase.

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Given that users may also prefer completing their tax forms on a bigger screen, it becomes essential to optimize the app for desktop or web usage as well. This adds layers to the development plan, increasing the overall technical scope but also ensuring a seamless cross-platform experience.

Design and User Experience (UX/UI)

Given the sensitive and complex nature of tax filing, UX/UI design takes on special importance in a TurboTax-like application.

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User-Centered Design: U.S. taxpayers, whether they’re filing simple W-2 returns or multi-state freelancer taxes, expect a smooth, intuitive interface that’s not only user-friendly but also trustworthy. Encouraging trust through visual cues such as secure logins, icons indicating up-to-date compliance, and progress tracking indicators for taxes processed in real-time is essential.

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Key UX/UI Considerations:

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Intuitive Forms: Because tax prep is inherently stressful for most users, the app’s layout must be intuitive. Forms that guide users step by step through complex tax questions (such as whether income qualifies for exclusions or credits) are necessary.

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Progressive Disclosure: Users don’t like being overwhelmed, so showing only essential information upfront while revealing additional complexity in layers can create a seamless experience.

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Branding for Relatability: The success of TurboTax is partially due to its tone—communicating complex tax issues simply and clearly. A similar app would benefit from employing a friendly, clear tone suitable to American users.

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Overly focusing on complex designs may inflate the app development cost, but balancing the design with usability will likely result in higher user engagement and retention.

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Integrations with Third-Party Services or External Systems

A critical part of development lies in integrating third-party services specific to tax management:

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Financial Integrations: To pull income sources, dividends, or mortgage interest, partnering with established financial connectors or APIs like Plaid or Yodlee is essential. This provides users with the ability to link their bank accounts seamlessly during the tax filing process.

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Government APIs: Integrations with IRS systems and state tax agencies are required for seamless electronic tax filing. Developers will need to establish secure, real-time connections with IRS e-file systems, which typically adds complexity to the overall project.

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Payment Processor Integration: Offering users the ability to directly pay their tax bill or receive their refund through direct deposit integrates third-party payment solutions such as Stripe or PayPal.

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Since such integrations demand significant testing—especially in handling API communications for transactional data—this part significantly impacts development time and cost.

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Database & Back-End Infrastructure

The backbone of an app like TurboTax involves solid back-end infrastructure designed to support:

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Data Security and Encryption Standards: Your app will be storing highly sensitive legal and financial data, including social security numbers and banking information. U.S. tax regulations (such as IRS Publication 1075) place stringent requirements on how this data must be encrypted and stored on servers, both in transit and at rest.

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Real-time Data Processing: Hosting calculations and forms instantly—along with provider integrations—demands a robust infrastructure that can process large volumes of data in real-time, especially during tax season crunch times.

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Scalability: Each tax season, especially during deadlines (mid-April being the U.S. federal tax deadline), app server loads skyrocket. To handle this traffic without downtime requires scalable cloud-based systems like AWS, Google Cloud, or Microsoft Azure.

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A solid backend, paired with encrypted data channels and distributed cloud systems, ensures both scalability and high performance for U.S.-based consumers, but it also pushes up the overall app development cost.

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Ongoing Maintenance and Updates

Once your TurboTax app alternative goes live, ongoing maintenance isn’t just optional—it’s critical. Tax filing apps are legally bound to keep their tax forms, codes, and refund calculations up-to-date with both federal and state regulations.

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Data Compliance and Law Updates: The U.S. tax code changes yearly, affecting everything from deductions to payroll brackets. Continuous updates to reflect these changes are needed, ensuring the app stays legal and accurate.

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App Store Updates: Both Google Play and the Apple App Store regularly update their guidelines, which apps must follow to remain listed.

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Given the rigorous regulatory landscape and high pressure for updates leading up to every tax season in the U.S., you can expect long-term incremental costs linked to compliance updates and server maintenance.

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Team Expertise and Location

Building an app like TurboTax requires working with a team highly versed in:

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• Backend developers skilled in complex data handling, including tax codes and calculations.
• Frontend and UX designers able to craft an easy-to-navigate interface for users unfamiliar with tax jargon.
• Data scientists and policy experts, particularly versed in U.S. tax regulations, ensure that your loophole-free app remains compliant.

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Location plays an important role too. While hiring a U.S.-based team may better align with local tax knowledge and app compliance needs, developing offshore could lower upfront costs but might require stricter compliance oversight on the developer’s side to account for the U.S. tax system.

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Hidden Costs & Miscellaneous Factors

QA and Testing: Testing for a tax app is intensive. It involves practical testing for usability and rigorous compliance checks to ensure accurate tax form filling, tax compliance laws, and financial security encryption.

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App Store Fees & Guidelines: In the U.S., listing your app on Google Play and the Apple App Store requires adherence to strict guidelines—and comes with costs. Apple charges an annual $99 developer fee, while Google Play charges a one-time fee of $25.

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Legal and Compliance Costs: You’ll also need to incorporate legal fees to ensure that your app complies with IRS filing requirements and state-specific tax codes. Additionally, if you offer tax services, your app may fall into regulations involving financial services.

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What Makes Building a Tax App Like TurboTax Unique?

Tax apps like TurboTax are unique because they must deliver, in real-time, complex calculations and e-filing options while maintaining bulletproof security and compliance with ever-shifting tax laws. U.S. consumers expect ease of use but also demand a product that simplifies financial interactions. A substantial amount of time and cost goes into compliance, IRS partnerships, security testing, and the incorporation of evolving tax systems.

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Want to see your tax app idea brought to life? 

At Scrums.com, we specialize in delivering custom tax recommendations and filing systems developed for U.S. audiences. From security compliance to full-scale financial integrations, we're here to help craft seamless tax filing experiences like no other. Reach out today for a custom development estimate!