Using Online Tax Services
Sitting down with tax forms, a calculator, and a sharp pencil is no longer the only way to tackle tax season. Filing electronically with services like H&R Block or TurboTax can save you time and maximize your tax returns, when used correctly.
However, before you get started, figure out if you qualify for free services, how much you’ll pay for premium services, and which online service is right for your needs.
TurboTax vs H&R Block
The question, then, is which tax prep service is right for you?
Below, we’ll look at TurboTax vs H&R Block, go over the pros and cons of each, and help you decide which is best for your needs.
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H&R Block vs TurboTax | Why are These Firms So Popular?
Chances are, you’ve seen and heard of H&R Block or TurboTax or both before. One major reason for that is because they are among the top five online tax services, along with Tax Slayer, eSmart Tax, and Tax Act.
TurboTax is owned by Intuit, a company known for creating financial software like QuickBooks. The company has become a leader in developing software and apps to help people stay in control of their finances.
H&R Block is one of the most well-known TurboTax competitors because the company has such a large presence away from online services. Those who feel more comfortable with face-to-face interactions when dealing with tax returns may feel more comfortable working with H&R Block.
The online services include access to a support team, which can be reassuring for those who are used to the traditional pen and paper method of filing.
There also seems to be a competition of H&R Block vs TurboTax in the advertising world. In that competition, many would call TurboTax the winner.
Marketing Land shares an entire article focused on their Super Bowl ads. The ads feature experts in different fields, showing everyday people how easy it can be to file their own taxes.
Not to be outdone, H&R Block holds its title as one of the best alternatives to TurboTax with a series of ads referring to tax season as refund season. Ad Age offers videos of the ads, which show people getting their refunds back in outrageous ways, like being dropped from a plane.
TurboTax vs H&R Block Comparison (Basic and Simple Filing)
TurboTax features a Federal Free Edition for those who need to file a simple 1040EZ or 1040A tax return. Most TurboTax alternatives offer a very similar plan, but many people choose TurboTax because the site itself is user-friendly and the company is well-known for being the leader in online tax services.
When comparing TurboTax vs H&R Block, TurboTax seems to be a customer favorite because of the ease of use. Users start by answering a series of questions to be sure that they’re given the right forms to fill out and that all possible deductions are found. One area where they have a leg up on TurboTax alternatives is with the ability to upload a quick picture of a W2 form to automatically fill in information on the right forms.
The H&R Block Free Edition is the basic service from the company. As one of the most formidable TurboTax competitors, H&R Block also tries to make it as easy as possible for customers to file online and get the best possible tax return.
When comparing TurboTax vs. H&R Block, the latter sets itself apart by positioning the company as a great source of information and guidance during tax season. Users again start by answering a series of questions before being directed to the right forms and being offered the right deductions. Throughout the process, frequently asked questions are answered and changes in numbers are explained so individuals can understand how the process works.
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For More Complex Filing
Many people will be able to take advantage of the free filing services offered by the companies. However, others may have a more complicated situation that will require a more complex filing. Looking at TurboTax vs H&R Block online services will show deluxe services that are a step up from the basic plans.
TurboTax offers the Deluxe plan, which is recommended for those who want to maximize their deductions. Those who have gone through major life changes, like getting married or buying a house, within the past tax year may benefit from choosing the Deluxe plan. Extra features like donation deductions, advice for new homeowners, and an audit risk meter are included. The cost for these extra features is $54.99.
Comparing TurboTax vs H&R Block would involve comparing the Deluxe plan to H&R Block’s Basic plan. Despite the name, the Basic plan is a step up from the free services offered by H&R Block. The company recommends this option for those who are returning customers, as it allows users to pull up their information from previous years to more easily file for the current year. While there aren’t many additional features, this plan comes with a fee of $39.99.
Those with a typical job and no additional income will most likely find everything they need from the previous options. On the other hand, those who have additional income from investments may need more support when filing. The TurboTax vs H&R Block comparison continues with their services directed specifically toward those who have income from investments.
The TurboTax Premier package has tools designed to import information about investments and additional income. Specific questions are asked for those with rental properties, those with employee stock plans, and those who are involved in stock trading.
As with most TurboTax alternatives, choosing the more detailed plan also means that you’ll have the same benefits as with the less expensive plans. In this case, that means guidance for homeowners, finding deductions for education, and uploading your information from previous years, among other benefits. The cost of the TurboTax Premier service is $79.99
When it comes to alternatives to TurboTax investment filing, the H&R Block Deluxe plan is the most similar. The plan features a step-by-step guide for filing information about stocks, bonds, and mutual funds. H&R Block has long been a leader in tax services, so it’s no surprise that their online services include detailed guides to walk users through the process of sorting through deductions and evaluating finances.
The H&R Block Deluxe service includes all of the services of the less expensive services. This includes a guide for homeowners, taking charitable donations into account, and explaining changes in your refund amount as you work through filing. The cost of the Deluxe service from H&R Block is $54.99.
For the Self-Employed and Small Businesses
While filing individual taxes through online services is easy enough, things get more complicated when you factor in business costs and income. TurboTax vs H&R Block plans suitable for those who are self-employed or running small businesses vary in terms of both cost and services.
According to the TurboTax website, the Home & Business plan was built specifically to search out any small business deductions and to walk business owners through printing documents for employees. While TurboTax competitors offer similar services, the TurboTax Home & Business Plan truly covers all of the bases to be sure that business owners won’t miss deductions or skip important steps in filing taxes. The Home & Business account fee is $109.99 for federal filing.
H&R Block’s Premium service is the option they suggest for self-employed individuals and those who run a small business. Paying for the premium service allows users to fill out Schedule C for noting income from self employment. It also gives the option to fill out Schedule E for reporting income from rental properties. How much does H&R Block charge to file taxes for self employed individuals and small business owners? This plan costs $74.99 for federal filing.
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The Bottom Line
Let’s be honest. Not many people actually enjoy filing taxes. Tax season is often stressful and frustrating. However, researching TurboTax and alternatives to TurboTax and determining which online service is best for you can result in saving you time, money, and a headache.
With four services each, at different price points and offering different benefits, deciding between TurboTax vs H&R Block online services comes down to what your needs are. Let’s look at the bottom line to decide which service is right for which situation.
For basic, free service, either company will get you through the process in a relatively short period of time, while helping you find deductions. The basic, free services are marketed toward first time online users. For that reason, H&R Block has the advantage. The trusted tax service company has excellent information and guides that carefully explain each line, letting you know that you’re doing everything right and getting the most out of your tax return.
For more complicated returns, TurboTax takes the lead, if you don’t mind paying a bit more for the service. The Deluxe and Premier services seem to cover more areas and account for more deductions than the comparable Basic and Deluxe services from H&R Block, perhaps the most noteworthy of all TurboTax competitors. However, it’s worth mentioning that you’ll pay $20-30 more when using TurboTax.
For small business owners, there’s no contest. While the TurboTax vs H&R Block cost difference for this category is about $30, the extra benefits from TurboTax make the cost worth it. TurboTax makes it easy to take business expenses, multiple employees, and business deductions into account.
For ease of use, the competition between H&R Block vs TurboTax is a tie. Both companies offer software that can be downloaded onto a desktop, along with mobile apps that allow you to fill in your information from any location. An article from the LA Times compares the two apps and found them similar in what they offer and how easy they are to use.
After choosing the best online tax service for your needs, chances are, you’ll find filing online to be a breeze. With step-by-step guides and support along the way, you may never go back to filing paper returns again.
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