TurboTax vs. H&R Block
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Tax time is no fun for most Americans, but you can take steps to make it easier. You should always keep your financial records organized throughout the year, and you should use a reputable tax preparer. But finding the right one can be difficult since you are accosted by hundreds of tax ads each year.
To protect your financial situation, you need to choose an affordable but reliable tax service. Many people gravitate toward the big two: Turbo Tax and H&R Block. Both are huge in the field of tax preparation and have good reputations for quality. So how do you choose the right one for you? Before deciding, you should consider several important aspects of excellent tax service.
You want maximum convenience and reliability from your tax professionals. H&R Block offers you four ways to prepare your taxes. You can visit one of their thousands of local offices, buy their software, DIY on their website or have a professional help you online. Turbo Tax offers the same online and software options but does not have tax preparation offices. They never have. If you want to meet with a tax preparer in person, then H&R Block is the right choice for you. However, many people prefer the convenience of doing their taxes online, so the lack of Turbo Tax offices may not deter you from becoming a client.
Neither company costs a fortune, but there are some important differences in pricing between them.
Free Option
Both TurboTax and H&R Block offer a free tier of service for qualifying customers. A simple 1040 federal filing, 1040 e-filing, state filing and state e-filing are free on both services. Turbo Tax offers customers a free review of their return if they file by a certain deadline, but H&R Block has expanded their free option to include student loan interest, education credits and child tax credits. The free option from Turbo Tax and other tax preparers is more limited and excludes many taxpayers with relatively simple returns.
Other Tiers
TurboTax and H&R Block also diverge in their deluxe, premium and small business offerings. On average, filing with TurboTax will cost you around $40- $70 more than the H&R Block version will. For instance, a federal filing in the Turbotax Deluxe version will cost around $60 compared to approximately $30 for H&R Block. The TurboTax state return cost on this tier is $50 and H&R Block’s is $36.99. The same differences hold at the premium levels as well. There a federal return costs around $50 from H&R Block while TurboTax charges $90.
You will usually pay more to file with TurboTax, but you need to consider more than just the cost of each service.
Reviewers tend to give TurboTax the edge when it comes to ease of use. Those customers new to online tax preparation find the Intuit company’s system easy to conquer. The program asks questions that help steer users to the best tax prep package for their needs. They then carefully lead the taxpayer through all the federal and state return sections so that all income, expenses and deduction questions are answered. The system works well for both first-time users and experienced ones.
TurboTax makes it easy to import and upload tax documents so that you do not have to fill in important information and risk making a mistake. They also offer an easy way for you to ask questions about your tax situation.
H&R Block also lets you upload and import documents and provides easy ways to access answers to your tax questions. Both tax services let you upgrade to a different tax package or switch to a professionally-aided return online. H&R Block is not necessarily a difficult service to use, but TurboTax has the edge in user-friendliness.
Every taxpayer fears that the IRS tool called the audit, even though most people’s chances of being audited are below one percent. Both tax preparation services offer you the option of audit protection for an additional fee. H&R Block’s Peace of Mind service includes help with any notices that you receive from the IRS and promises to provide representation at your audit. If you incur any fees or penalties due to an H&R Block mistake, the company will cover the amount up to $10,000. TurboTax’s program, Audit Defense, offers much the same benefits as H&R Block but it does not put a limit on the amount the company will pay for penalties and interest caused by its mistake.
Both companies offer qualifying members the option of an advance interest-free loan on their tax refund and the choice of having that money loaded onto their debit cards. H&R Block uses the Emerald Card, while the TurboTax version is a Visa card. Both cards are reloadable, so you can use them throughout the year.
Both tax preparers have some advantages over the other. If you are comfortable with online filing and want to save money, then H&R Block may be the best choice for you. If you are not quite as online savvy as some, TurboTax might be your better bet. It specialized in gently leading you through the tax prep process. And anyone who uses Intuit’s Quickbooks will be right at home with TurboTax.
Finally, if you want that in-person experience, TurboTax can’t help you. The company does not have offices all around the country where you can sit across the desk from a tax pro.
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