For the last few years, I’ve completed my personal returns top-to-bottom using each of the three most popular online tax prep providers – TurboTax, H&R Block, and TaxACT. I started my 2015 tax year returns this weekend, but each one was close enough to last year’s experience that I couldn’t bring myself to do all that repetitive data entry again. I did run through the major categories, explored the import features, and tried contacting their customer support.
The major differentiating factors remain price, time-saving features, audit support, and ability to answer specific tax questions. All three offer a “Maximum Refund Guarantee” (relative to competing software) as well as an “Accuracy Guarantee” (relative to your tax bill or refund amount) that says that they will pay any penalty and interest assessed by the IRS or your state due to calculation errors on their part (though H&R Block limits this to $10,000). Actual cost can vary widely with sales and discounts, listed here are just the everyday prices. My condensed review:
- Most expensive. Federal Deluxe regular price is $34.99 w/ e-file and supports itemized deductions. However, you need Premier at $54.99 if you have an investment gains or rental property. State return price is $36.99.
- Best import features. Imports a lot of information from last year’s return. Automatically imports W-2s from many payroll providers and (by far the most) 1099 forms directly from financial institutions, both saving time and improving accuracy. Works with free “ItsDeductible” program to help with recording charitable donations.
- Moderate audit support. You get help, but no in-person representation.
- Moderate tax advice – You can request a phone call-back, wait time given upfront (10 minutes for me). Good online question database.
- Annoying upsells. Intuit always feels like they are trying to extract the most money out of you.
Bottom line: The time-saving choice if you have a lot of brokerage transactions, W-2s, or other 1099 forms to electronically import this year. Also if you have a lot of details to import from last year’s return with TurboTax. It may be worth the extra cost to avoid tedious data entry.
TaxACT Online - Least expensive. Federal Plus regular price is $19.99 w/ e-file and supports itemized deductions, capital gains, and rental income. Federal + State return combined including e-file at $19.99.
- Limited import support (worst of the three). Free Donation Assistant® feature to track charitable donations.
- Limited audit support (worst of the three).
- Limited tax advice quality (worst of the three). The hardest to find real person help. You can get phone support, but only if you pay first. Online question & answer database is available.
Bottom line: The value choice if you just want accurate DIY tax return software and don’t need any extra assistance.
H&R Block at Home Online - Middle-of-road pricing. Federal Deluxe regular price is $34.99, which supports itemized deductions and capital gains. You need Premium at $49.99 for rental property. State return price is $36.99.
- Moderate import support for 1099s and W-2 (not as broad at TurboTax, better than TaxACT).
- Best free audit support. Only product that includes an H&R Block Enrolled Agent actually attending your audit in-person. However, consider whether you would hire your own representative in the actual event of an IRS audit.
- Easiest to get in-person tax advice. Free Live Chat included, wait time given upfront (4 minutes for me). Good online question database.
Bottom line: The most helpful choice if you don’t quite want to pay to person to do it all for you, but you are worried you might need some assistance. Based on overall experiences, H&R Block uses their brick-and-mortar experience to provide the best answers if you have tax questions. You also get the assurance that a federally-authorized enrolled agent will guide you for free through a potential albeit unlikely audit.
Tim Gray did his annual NY Times comparison as well, with very similar experiences to my own. As he puts it:
Each program’s maker has staked out a place in the market where it excels. TurboTax’s technology is the smoothest to use — the program rarely frustrates and offers a few features each year the competitors don’t match. Block’s tax help is the easiest to understand and get access to. TaxAct’s offerings are the cheapest.
I would add that although each product still has their strengths, this year the margins are getting closer. All three offer guidance throughout the filing process. In terms of price, TaxACT is still the cheapest but the total cost is higher than in previous years. In terms of online interface, all three are pretty similar, with TaxACT modernizing parts of their interview process. H&R Block remains best at one-on-one tax advice, but all three offer tax question databases (and really, there’s always Google for everything else). As the feature leader, TurboTax added a few more incremental things like a slick smartphone and iPad apps which you can use simultaneously with the traditional web browser version. Overall, the competition has made for slightly better products across the board.
All of these sites work on a “start for free” basis, so you can also try them out yourself before having to commit and pay anything.
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Your review is pretty good. I have been using H&R block for years and I had a very hard time with it last year. I had converted my previous home into a rental property and in order to get the calculations for a partial year’s rental right I had to hand edit the form. Additionally I took advantage of a Arizona tax credit, and they told me I couldn’t efile when I took this credit because they didn’t support the right form.
To be fair if you get the right deal (usually modifying the CD they send you) you can get it for dirt cheap. But I am hoping that turbo tax will be better this year.
I too was able to get the Deluxe H&R Block with State + efile for $14.95, but since I had moved last year had to pony up another $36.95 for an additional state. I was pleased that I didn’t have to pay the extra charge for efiling the 2nd state. The bugs that I had found in the 2014 edition were fixed for 2015. The Deluxe version also accommodates Schedule C, whereas I understand with TurboTax, you have to get the Premium edition now to handle that. I also have been very pleased with the Deduction Pro that is built into the tax program for assigning values and handling non-cash donations to charity.
You should check out Free Tax USA (http://www.freetaxusa.com/). I had used Tax Act last year because it was free to itemize and efile, but when they added a fee this year I went looking for something else. It was mostly do it yourself, but worked without issue and supported investment sales, itemizing, and lots of other things.
I’m amazed that companies feel they need to have a “mobile” version of their software no matter how complex. I’d be curious how many people do their taxeson their phone (or apply for a mortgage via intuit’s rocket mortgage). Seems like features without real benefits for most folks.
I agree Maury, but perhaps they are aimed more towards tablet users rather than phones.
Well, I can see it working for very simple returns that qualify for 1040-EZ. Some folks essentially just have a W-2, and now you can simply take a picture of your W-2 with your smartphone and use OCR to read off all the numbers!
Nice recap!
I’ve been using H&R Block Basic version for years and have been pleased with the ease of use and price ($14.99/Amazon direct download). Our returns aren’t overly complicated, but we do itemize. I don’t have a need for the state version as the state Illinois website has an online tool where you can file and submit directly with them.
Joe-
I switched from Turbo Tax to Tax Cut over 10 years ago, both are exceptional programs with more new features every year for a great price. The problem I had with Turbo Tax was they would only support 30 entries into the schedule E (Rental Property), I have an inventory of rental homes and small multi family properties when I hit the 30 property threshold I found that I could not enter anymore into Turbo Tax, I had to combine a couple of properties to finish my tax return, I appealed to customer support and was met with deaf ears. The next year I switched to Tax Cut and found to limitations, the big problem I had with switching programs was that it was not as seamless as advertised, some things transferred over just fine others did not, especially depreciation schedules, i had to manually make corrections hope to never switch again. Tax Cut has added expense safe harbor elections for rental property this year a big plus their are many elections Tax Payers need to be aware of that the programs cannot always address.
This year I switched from TaxACT to H&R Block. While you state that TaxACT is the cheapest, in my case it was not. I always buy the desktop software without state. I purchased a basic version of the H&R Block software for half the cost of TaxAct software. The Taxact software only comes with state if you buy the desktop version, Even for states that have no income tax. So TaxACT charges for state income tax regardless of if they provide software or not for the state.
This irritated me so I switched. My experience with H&R Block software and customer support was good. I probably would not go back to TaxACT because H&R Block’s download from brokerage houses Is so much better. You really need to compare what forms each version of the program provides to make sure they meet your needs. I found that the basic version of H&R Block software covered all of my needs, but the other two vendors required I purchase a more expensive version.
I’ve been using H&R Block “best of both” for four years. Total cost is $79.99 and there is a $15 rebate from Amex this year if you sign up for it through your credit card offers. You do the input and you have a real person at H&R who does the hard work, plus answers all your questions and double checks all your work. For another $35 you can buy “Peace of Mind” (as if such a thing actually existed) whereby in case of an audit H&R will represent you. I think overall its an amazing deal.
I did a lot of price shopping this year (I have a state tax return and a small business) and I found TaxSlayer to be the best price by quite a lot. It’s been just as simple and straight forward as TurboTax and HR Block have been in my experience.
How much will the online tax tools charge for keeping / archiving your tax return and taking prior years’ number to the current one? -Thanks.
In my experience, it is free… at least for a few years.
Unbelievable: TaxAct makes you upgrade to pay version if you have capital gains from stock sales! Was completely free before for these transactions.
TaxAct Premium bundle (with state e-file included) is now only $10. Not sure how long the sale will last.
https://www.taxact.com/applications/file-now/?d=d12&product_code=15CRPRMBUN001OL
I’ve used TurboTax and TaxAct and found that there is a difference in the amount of my refund. Has anyone else encountered this? Which one gives you the best return?