TurboTax vs. H&R Block – Forbes Advisor

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Ready to file a tax return, but not sure which tax preparation software to use? When it comes to TurboTax versus H&R Block, both offer an easy way to file your own taxes online and enlist the help of a tax professional if needed.

Here’s our take on H&R Block vs TurboTax, to help you find the best tax software for you.

Quick Look at TurboTax

TurboTax, a product from financial, accounting, and tax software provider Intuit, is virtually synonymous with doing your own tax return preparation, in part because it’s been around for nearly 40 years.

TurboTax has been the most popular do-it-yourself tax software option for decades thanks to the company’s focus on design and user experience. Back when other tax software options asked the same set of questions to all users, regardless of their tax status, TurboTax pioneered the “click here if this applies to you” format. Users can select topics relevant to them, such as moving house, getting married, a new job, or selling stocks, and skip sections of the software that don’t apply to their situation.

It’s an approach that TurboTax competitors, including H&R Block, have tried to emulate.

In 2017, TurboTax Live was launched, allowing customers to seek help from a certified tax expert if they get stuck or have questions while preparing their returns. And in 2020, the company launched TurboTax Live Full Service, which allows customers to submit their tax return to an expert.

A look at H&R Block

H&R Block’s history dates back to earlier than TurboTax, although DIY tax reporting hasn’t always been a part of the business. H&R Block was founded in 1955 when brothers Henry and Richard Bloch decided to franchise their tax preparation business.

For decades, the company was best known for its tax preparation storefronts, where clients could book an appointment or drop in to have their returns processed by a qualified tax preparer. In the early 2000s, H&R Block introduced tax software that allowed customers to do their own taxes from home.

In 2018, the company launched H&R Block Tax Pro Go, which allows customers to upload documents and answer questions about their tax situation online, then have a tax professional prepare and file returns on their behalf. .

Turbo Tax vs. H&R Block: Pricing

H&R Block and TurboTax both offer comprehensive tax filing services, but we’ll focus on pricing for the DIY options.

H&R Block has slightly lower prices than TurboTax for most paid versions of its online tax filing platforms. Keep in mind, however, that both companies may offer special pricing for people who file early during tax season.

TurboTax vs. H&R Block: Features

TurboTax and H&R Block each offer a variety of features designed to make filing taxes convenient and stress-free. Here are some common features offered by both companies:

  • Import of tax documents. If your employer participates, you can automatically import your W-2 into TurboTax or H&R Block software to save you time from manually entering information. You can also take a picture of your W-2 and other tax documents with your smartphone and import them with a mobile app.
  • Accuracy guaranteed. TurboTax and H&R Block both offer a 100% accuracy guarantee. If their software makes a mistake, the companies will reimburse you for the resulting penalties and interest. H&R Block’s reimbursement is capped at $10,000, while TurboTax has no cap. Guarantees only apply to miscalculations on forms prepared by the software – no company will reimburse you if you do not enter all required data accurately or if you intentionally omit information on your tax return.
  • Charges payable on your tax refund. Both H&R Block and TurboTax offer the option of paying your tax preparation fees from your tax refund. Both also charge a $39 convenience fee.
  • Live support. If you get stuck preparing your return or have a tax question, TurboTax and H&R Block allow you to pay an additional fee for live help from a tax professional. H&R Block’s online help desk starts at $69.99 for help with a federal return, and TurboTax Live starts at $79. Status return assistance costs an additional fee.

Advantages and disadvantages of TurboTax

Now that we’ve explained how H&R Block and TurboTax are similar, let’s look at some pros and cons of using TurboTax.

Advantages

  • Deduction maximizer. Available with TurboTax Deluxe and later, TurboTax’s Deduction Maximizer searches over 350 tax deductions and credits to help you claim all the tax relief available to you and maximize your refund (or minimize the amount that you must).
  • Donation calculator. The TurboTax “ItsDeductible” app helps you calculate the value of items donated to charity.
  • Ease of use. TurboTax makes filing taxes easy by guiding you through the process with interview-style questions and plenty of plain-language definitions and explanations.

The inconvenients

  • Lack of price transparency. If you are unfamiliar with all the tax forms, deductions and credits that apply to your tax situation, it can be difficult to know which version of TurboTax you need. You might go through the entire tax preparation process, only to find that you don’t qualify for the free or discounted version of the software and have to pay hefty fees to file. It can mean a waste of time if you decide to find a cheaper alternative.
  • Lots of upsells. When you use TurboTax software, prepare for near-constant offers to upgrade to a more expensive version, get help from a live TurboTax expert, or add other features for an additional fee.

Advantages and disadvantages of H&R Block

Now let’s look at the pros and cons of using H&R Block to file your return.

Advantages

  • ‘No surprise guarantee.’ H&R Block tries to avoid surprise fees with its “no surprises guarantee”. If the company does not provide transparent pricing upfront and explain any price changes during the process, you receive a 20% coupon on next year’s tax preparation from H&R Block .
  • In-person help option. If you’re stuck preparing your tax return or decide to leave it to a professional, you’re not limited to working with someone online. You can work with a tax professional virtually, by making an appointment at an H&R Block office or by dropping off your tax documents at one of the offices. Filing fees with an H&R Block tax professional start at $80 (plus additional fees for a state tax return).

The inconvenients

  • Can be expensive. Although H&R Block is cheaper than TurboTax, it is more expensive than other DIY tax filing options, such as TaxSlayer and TaxAct, if you don’t qualify for the free option. Paying $44.99 per state can add up quickly if you need to file in more than one state, and add-ons like online support or wanting your fees paid directly from your refund can increase the cost.

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TurboTax vs. H&R Block: Which is Right for You?

TurboTax and H&R Block are solid, user-friendly options for DIY filers who want to try filing their own tax returns, but like the idea of ​​being able to call on professional help when needed.
Just keep in mind that additional service levels will come at a higher price. If you’re interested in unlimited, on-demand tax help, you might be better off upgrading to TurboTax Live Full Service, getting help at a local H&R Block office, or working with a Certified Public Accountant. or an IRS-accredited enrolled agent. .


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