Why do I have to pay an extra $40 to pay with my refund.

That "pay fees out of refund" method is an optional service.  If you choose to pay your fees out of your Federal refund, you agree for a third-party company to open a temporary bank account in your name at an intermediary bank.   That intermediary bank then receives your refund from the IRS and subtracts the TurboTax fees.    Then the intermediary bank sends the rest to your bank account.   Then the third-party company closes your temporary bank account.

That process has a 39.99 service fee, except in California it is 44.99. 

Or you may see it as $40 (or $45 for Calif.)

If you don't want to use that payment method, and if you haven't filed, you can remove it and pay upfront by credit/debit card or a prepaid debit card you can buy in a store.

Here's the method to remove it in all states except California.  There's a different removal method for California filers.
https://ttlc.intuit.com/community/downgrading/help/how-do-i-remove-pay-with-my-refund-fees-in-turbotax-online-and-change-my-payment-method/00/25880