TurboTax vs. H&R Block

A lot of people stress about filing their taxes. Luckily, there are various tax filing services available to make the process simpler and quicker. Two of the most well-known services available are TurboTax and H&R Block. Both of these services offer a user-friendly experience. They provide users with information along the way so they can easily understand what they are doing. And perhaps the most important factor is that they both offer affordable options for filing.

H&R Block 

H&R Block started providing services for consumer tax filing way back in 1955. It has become one of the most popular filing services because it combines helpful guidance and simple tools that are considered to be useful whether you have never had an experience with filing taxes or whether you have been filing for so long. Of course, the guidance and tools will come at a price.

Listed below are the four digital (online) filing options that are currently offered by H&R Block:

The cheapest option for filing is the More Zero, which is the the free option. It allows users to file their one state returns and federal returns for free. However, the catch is that this option does not support all the documents that the user might need. The major forms that it supports are the 1040EZ, 1040A, and the 1040 with Schedule A. When you would want to file other forms, you will be required to upgrade to a paid plan. 

The physical stores of H&R Block is one of its standout features. If you do not want to file your return online, you can just stop by one of H&R Block’s 10,000+ tax offices in the United States. Their tax professionals will be able to help you with your filing.

TurboTax

TurboTax has been established during the mid-1980s. It is partly popular because of the fact that it is owned by Intuit. Intuit offers a software called Quickbooks used by millions of companies to manage their accounting. TurboTax offers a straightforward step-by-step guidance with user-friendly design.

Similar to H&R Block, TurboTax offers free filing options that enable you to file your federal returns and one state returns free of charge. However, the free option only supports forms 1040A and 1040EZ. If you want to itemize your deductions with schedule A (or if you are required to use any other types of forms), you will be required to upgrade to a paid plan.

Listed below are the four digital (online) filing options that are currently offered by TurboTax:

Below is a point-by-point comparison that is aimed to help you sort out whether TurboTax or H&R Block will be suitable for you and your needs.

Price

In general, TurboTax and H&R Block have similar list prices. The top-tier of TurboTax, throw-it-all-at-us version costs approximately $200; the corresponding top-tier product of H&R Block is only slightly cheaper when you include the human review to make it an apples-to-apples comparison at the high end.

Earlier in the tax season, the expanded free version of H&R Block worked with the Schedule A and 1040 (as opposed to only the 1040A or 1040EZ for the free version of TurboTax), which could be a huge factor for some filers. Currently, the free version only works with the 1040A and 1040EZ. Members of the military receive a discount from TurboTax depending on their ranks while H&R Block has a partnership with Military One Source.

Both of these providers offer various versions of paid products that can accommodate complex tax situations. Itemizers may find the Deluxe versions as an excellent choice as the Premier/Premium versions are usually tailored towards investors and people who have rental property. (You must remember that you will have to pay additional fees to get your state return done.) If you are self-employed, the Self-Employed versions can do the heavy lifting.

If you are an early starter, the free version of H&R Block works with Schedule A and the regular Form 1040, which could mean huge savings for most filers (however, when it is closer to the deadline of filing, the free version will only work with the 1040A and 1040EZ). Nonetheless, the products of H&R Block are slightly less expensive compared to its TurboTax counterparts.

Ease of Use and Features

The IRS is the only entity that determines how the math works on a tax return. So unless there is an error in programming, you should receive the same numerical “answer” no matter what tax software you choose to use. However, you still need to feed all of your information to the software, and there are a million means to do just that.

TurboTax 

TurboTax is considered as the most user-friendly tax software provider available on the market. The interview-style Q&A interface of TurboTax has things in simple English, and you can skip some questions if you get sick of the process of the interview (or you can even go straight to the forms if you are the confident type).

H&R Block 

The interface of H&R Block is also easy to use and straightforward, and help is readily available within the process of the preparation — most terms are hyperlinked so you can easily read a definition and get additional information. As with the majority of software packages, a banner keeps track of where the user is in the return process.

Both of these providers offer photo and other options for import for W-2s to accelerate the process. The paid users of TurboTax can use ItsDeductible, a feature that lets you see the value of the deduction for donated household items, clothes, other things. The Self-Employed version of TurboTax offers a great expense-tracking feature via QuickBooks, which includes the ability to keep photos of your receipts and track the mileage from your phone.

If you want an all-cutting-edge bell and whistle on the market, TurboTax will be the better choice. However, H&R Block is not far behind. Both of them have solid options that have intuitive interfaces, offer guidance where required, and keep the process running in a logical manner so that you can get things done quickly.

Support

Support is one of the most important factors you must consider when determining the better option.

TurboTax

TurboTax flaunts a wide knowledge-base and a huge community of active users. Users that have paid versions also receive real-time help with the use of SmartLook which connects the users to a tax specialist through one-way video. With one-way videos, the user can see the specialist, and the specialist can see your screen.

It can be used with your computer or the TurboTax mobile app. You can ask questions, and the specialist can highlight the areas you need to address or point you to where you will need to enter additional information.

TurboTax Live is a new feature launched by TurboTax. It is a high-end package that offers a one-on-one review with an Enrolled Agent or a certified public accountant before you file, as well as an unlimited live tax advice given by an on-screen EA or CPA.

You can make appointments or talk on the go to the advisors via one-way videos. In general, the hours of operation are 5 a.m. to 9 p.m. (local time), though that may be lengthened during tax season. All of the agents of TurboTax are EAs or CPAs; If you want, they can even sign and e-file your return. Help is also available via chat.

H&R Block

The online tax packages offered by H&R Block have a second line of defense in the enormous band of human tax preparers at approximately 12,000 offices. Help offered at any of these locations is not given for free. Users of all the paid packages can avail of a free online chat done with a tax expert.

If you would wish to have a human review your work, you can avail the Tax Pro Review add-on feature, which will cost between $49.99 and $89.99 depending on the type of software package you purchase. This directly competes with TurboTax Live.

H&R Block says that the people who give tax support and check the tax returns submitted for Tax Pro Review are graduates of the 60-hour Income Tax Course of the company and are required to complete a minimum of 18 hours of continuing education and an average of 20 hours of skills training regarding policies and procedures each year.

According to the company, the tax pros who are handling Tax Pro Review returns are “certified at H&R Block’s highest levels and are our most tenured and experienced tax professionals.”

H&R Block and TurboTax offer the best support options available on the market. H&R Block may be the better option if you want more ways to have face-to-face support. TurboTax also has a lot to offer to filers who are comfortable with getting online advice, and both providers give their users access to actual tax professionals.

Other Considerations

If you are receiving a refund, you can have the IRS send you a check or deposit the money directly into your bank account. This is considered as the quickest way to receive your refund, regardless of the software you use.

Both H&R Block and TurboTax have an option where the users can have their refund loaded onto a prepaid debit card. Both services allow its users to use their refund to pay for your tax-preparation fees.

Audit protection is also a feature that is promoted by many tax-prep companies. The level of service usually varies, so you must read the fine print. In general, there is guidance (which basically helps you understand what is happening once you are audited) and representation (which means that someone from the company will talk with the IRS on your behalf). Most preparers offer free guidance. However, if you want to be represented by someone, you have to pay more.

TurboTax

If you receive an audit notice, you will receive free guidance on how to prepare and what to expect. But if you want someone to represent you in front of the IRS, you will be required to buy the “Audit Defense” product of TurboTax when you file. The product costs $44.99.

H&R Block

Users of H&R Block can purchase a type of combo product called the Worry-Free Audit Support which allows you to have one-on-one contact with a tax professional to help guide you through an audit. The Worry-Free Audit Support costs $19.99. It includes in-person audit representation, IRS correspondence management, and audit preparation.

If you only want the cash coming from your refund, both these companies can easily get it done. However, if things ever get messy with the IRS, H&R Block has an edge over TurboTax since its audit defense add-on is cheaper.

Conclusion

TurboTax may not be the obvious choice for everyone despite its dominant market share in DIY tax preparations. You must remember to take a hard look at H&R Block before deciding which software provider to use. You will probably get the job done for lesser costs thanks to the expanded capabilities of the free version. But if you want support that you can easily access, TurboTax is your best bet.