Filing taxes can be confusing. Can you deduct healthcare expenses? What are the rules about claiming dependent children? With all of the highly specific regulations, tax preparation is its…
Online tax services give you step-by-step instructions that prompt you to enter information about your income, investments, expenses and other factors that may affect your tax burden. As you follow each step, the website’s software begins to calculate how much you owe the state and federal governments. Many websites will also use your information to help you find deductions that will save you money.
The amount that you pay will depend on which company you choose and what type of services you want. TurboTax can cost anywhere from $0 to $134. H&R Block charges from $0 to $114. Since the prices vary, you should look at the specific type of services that you need before you decide which company you want to use.
For the most part, online tax services are very easy to use because they translate complicated forms into simple questions. You can make the process even easier by gathering and organizing all of your tax documents, including things like W-2 forms, 1099 forms and business receipts. Ideally, you should save these and other items throughout the year so you can reference them quickly.
Many companies claim that they offer free federal tax services. In reality, you only get the free service when you file simple forms. If you have a single source of income and don’t have many investments, then you may be able to get your federal taxes filed for free. If, however, you want to itemize your deductions or you have multiple sources of income, then you will need to pay for the service.
Practically anyone can use online tax services. There are exceptions, though. For instance, you need a reliable Internet connection and a computer or smartphone. You also need good reading comprehension skills to make sure you understand what information the software needs from you. It isn’t too complicated, but some people may not have the right skills to do their own taxes.
Most of the major online tax preparers offer customer services that can answer your questions. You won’t necessarily talk to someone on the phone, though. For instance, TurboTax has a product called SmartLook that connects you to a TurboTax expert online. Once connected, the expert can guide you by drawing directly on your screen.
All reputable online tax services have forms for federal and state taxes. You may, however, have to pay extra for state tax preparation. Even if you get to file a simplified federal return for free, you will have to pay for your state tax services.
For the most part, online tax services guarantee their work. For example, TurboTax provides a 100-percent Accurate Calculations Guarantee and an Audit Support Guarantee. H&R Block offers similar guarantees. Note, however, that these companies only guarantee their work. If you provide inaccurate information that skews your tax payment, then you have to face the responsibilities on your own. Even if the online tax preparer helps, you will need to pay for the additional service.
TurboTax and H&R Block might have the most name recognition, but there are dozens of companies that offer reliable online tax services. With so many options, you need a plan that will help you choose the right one for you.
When exploring online tax services, make sure you compare the prices so you can find an affordable option. Many tax services will let you file simple federal documents for free. If you want to take deductions or file state taxes, though, you will need to pay.
Ideally, an online tax service should make it easy for you to complete all of your forms. Unfortunately, you can still encounter problems or phrases that you don’t understand. When those issues occur, you need a company that offers strong customer services.
Read online customer reviews to help you decide which companies will give you the help you need.
Most online tax services will give you the biggest refund guarantee. That’s great, but you should look for deeper guarantees that will make your life easier. For instance, will the company help you get through an audit? Will it save this year’s information to make next year’s taxes even easier? Those are the types of guarantees that make an online tax service excellent.
H&R Block and TurboTax have a lot of similarities, so many people find it difficult to choose between the companies. A close look at each service could help you decide that one of the services is a better fit for you. Breaking the differences into categories may also help you understand how the companies differ from each other.
If you want to file your federal taxes for free, then H&R Block will give you a better deal. TurboTax’s free federal tax service will only use information needed for the 1040EZ or 1040A. If you want to take any deductions, then TurboTax wants you to pay for the extra information. H&R Block, however, will accept all of the information needed to complete your 1040 and Schedule A. By adding schedule A, you get to accept some tax deductions without paying H&R Block.
TurboTax and H&R Block both offer good levels of support that will help you complete your taxes without making mistakes. The difference depends on how you prefer to access support. TurboTax stands out as the better option for filers who prefer doing everything online. If you feel comfortable communicating with people online, then you will probably like TurboTax’s support services.
H&R Block, however, may work better for people who prefer face-to-face learning. The company has thousands of brick-and-mortar locations throughout the country. If you need someone to walk you through something that you don’t understand, then you can also visit one of these locations for help.
A lot of people prefer TurboTax because the website uses a basic Q&A interface to gather information. Instead of answering complicated questions from tax forms, you answer simplified questions written in plain English.
TurboTax also does a good job of breaking your tax forms into small pieces. Because of this, you don’t have to complete your taxes at one time. You can always complete a section, save it and return to the software at a later date.
Finally, TurboTax has an in-depth knowledge base where you can find answers to most questions. Instead of spending time waiting for an expert to help, you just search the knowledge base for the answers you need.
H&R Block also has an intuitive interface, but it doesn’t feel as warm and personal as TurboTax’s. It does excel in a few ways, though. For instance, the software pays attention to your activities. If the website senses that you have run into a problem, then it will send you to its knowledge base, where you can find a solution.
H&R Block also hyperlinks potentially confusing words and phrases, which can make answering questions much easier for inexperienced filers.
Advertising Disclaimer: Simple. Thrifty. Living. does receive compensation for some of the services that we recommend, although we only recommend services that we truly believe are the best.