I know my wife is going to want to use Microsoft Word and Excel
Has your wife tried out the libreoffice suite or the online version of office? If not I would highly recommend the former then the later if it doesn't work out for you, as running ms office on Linux is officially impossible and unofficially a pain in the ass.
and we always use this laptop for our taxes, so TurboTax
If it must be turbotax, a VM or wine will be the move, if it doesn't need to be, there is opentaxsolver, although I have no experience with any of these software suites.
I have a feeling running from a USB drive will be way too slow.
In general it should more than suffice, the only thing is load times will be high, but not unbereably so.