Turbotax Vs H&R Block

Do you dread tax season and all the complicated paperwork it entails? Do you find yourself wondering why even basic returns are so difficult? Do you want to crawl into a hole when there are any extra forms that make your filing more complex?

Tax season is upon us. Two of the biggest companies dealing with tax filing in the US are TurboTax and H&R Block. Each offers different resources and assistance during the filing process. I've explained the basics of each so you can pick the best tool.

Each of the companies offers a free plan for certain simple tax returns. They also have additional paid plans with different pricing tiers depending on the forms being filed. You can electronically file your taxes by using either company's software.

Overview of TurboTax and H&R Block

Shared Features

  • Resources and databases regarding updated tax laws.
  • Tax filing tips.
  • Tax guides and articles.
  • Tax tools and calculators.
  • Use with Android and iOS devices.
  • Compatibility with small and medium sized businesses.
  • Phone and live support options.

Unique TurboTax Features

  • One-time software payment for unlimited multi-year access.
  • QuickBooks, Wealthfront, Paycor, and The Neat Company software integration.
  • Investment advice, stock plans, and retirement tax advice.
  • Expense estimators and withholding calculators.
  • Donation tracking.
  • Plans optimized for freelancers.

Unique H&R Block Features

  • Free plan with complete Tax Information Center access.
  • W-2 early access capabilities.
  • Healthcare calculator.
  • Tax preparation checklist.
  • W4 information calculator.
  • Linux and Mac compatibility.
  • Information for large enterprises.
  • Email support, training resources, and help desk tickets.

Packages and Pricing

TurboTax

TurboTax's packages and prices are:

  • Very basic free plan.
  • Live Basic - $50 for state, $80 for federal.
  • Deluxe (plus Live) - $50 ($55) for state, $60 ($120) for federal.
  • Premier (plus Live) - $50 ($55) for state, $90 ($170) for federal.
  • Self-employed (plus Live) - $50 ($55) state, $120 ($200) federal.
Turbotax vs H&R Block

The free plan is for extremely basic returns: you must be filing a 1040 and state return. You cannot include any schedules, additional tax credit forms, or other potentially complex calculations.

Live Basic is for people who could use the free program, but who want assistance. You'll be helped through the process by a CPA available through video. They'll offer advice and review the final product before it's filed.

Deluxe allows for certain tax deductions and tax credits. These returns may include Schedule C forms regarding business income, but you must not record any expenses. You also can't file reports on capital gains or income from renters.

Premier takes the Deluxe plan and adds investment and rental income reporting, which means that you can file Schedule K-1, Schedule E, and Schedule D forms.

Self-Employed adds extra tax deduction advice, help with home office expense calculation, expense-tracking features to assist freelancers, and a one-year QuickBooks Self-Employed subscription.

H&R Block

The packages and prices include:

  • Free filing.
  • Basic online assistance - state filing free, federal $49.99.
  • Deluxe (with Online Assistance) - state $36.99, federal $49.99 ($99.99).
  • Premium (with Online Assistance) - state $36.99, federal $69.99 ($139.99).
  • Self-Employed (with Online Assistance) - state $36.99, federal $104.99 ($169.99).
Turbotax vs H&R Block

With H&R Block, you can file your tax return for free even if you're using a Schedule 1, 2, or 3. As long as you're submitting a standard 1040 without additional deductions or credits, you have the option.

Like TurboTax, the basic online assistance feature allows a CPA to help with the free program's filing process.

Deluxe allows for a number of different tax credits and tax deductions, but the plan isn't compatible with landlords, investors, small business owners, or freelancers.

Premium adds the forms that investors and landlords need to report income.

Self-Employed is a one-stop shop for any business owner. If you're filing a Schedule C, this is the tier for you. Though it's the highest priced option, one advantageous aspect is that it covers any business filing, no matter how complicated the documentation.

Winner

Free Plan: H&R Block

The H&R Block plan lets you file a 1040 with Schedule 1, 2, or 3. TurboTax doesn't allow schedule filing.

Online Assistance: H&R Block

Live CPA assistance is much more inexpensive through this service, especially considering basic returns have no state filing fee.

Freelancers with No Reported Business Expenses: TurboTax

If you're filing a Schedule C form to report business income without any expenses, the Deluxe TurboTax package covers you. With H&R Block, you'd have to get the most expensive option.

Freelancers and Business Owners with Complicated Returns: H&R Block

If you're creating a complicated return with multiple different forms and calculations, H&R Block is a good choice. All Schedule C returns are handled at the same basic pricing tier regardless of complexity.

Software Features

TurboTax

TurboTax has by far the most streamlined, intuitive, and comprehensive software in the industry. The ease of use is why the pricing tends to be more expensive. Every interface is user-focused and optimized to make the process easy.

Turbotax vs H&R Block

When you use the TurboTax software, you're guided through straightforward questions and prompts exactly like you're talking to a CPA. As you enter your information, the interface offers hints, tips, and explanations of what the questions are for.

You don't have to answer the questions one by one in a line, either. It's easy to move around the interface and fill out different portions. The software automatically keeps track of where you've finished and where you need to complete your data.

Automated data population is available by importing your W-2 forms through photos or scanning. In addition, the Self-Employed, Premier, and Deluxe tiers have an integrated deduction calculator that automatically determines the value of donated books, household items, and clothes.

In addition, the Self-Employed tier uses a similar expense tracking calculator.

H&R Block

The H&R Block interface isn't quite as friendly, but it does allow you to skip around and answer questions at your own pace. If you add pages, there's a pricing preview button that keeps you informed of how much your package costs.

Turbotax vs H&R Block

While the software doesn't have the same automatic expense and deduction calculators, it can:

  • Import your prior year tax return from another preparation service.
  • Import your contractor 1099s.

Winner: TurboTax

The expense and deduction automation tools are seriously valuable. You might end up writing off several hundred dollars in deductions that you wouldn't have had numerical value for beforehand. Plus, the software is super user-friendly and offers helpful insight.

Pros and Cons of TurboTax

Pros

  • The interface is simple, and the software creates your return with the right documents and populated fields based on easy answers to questions.
  • Additional purchase options are available, one of the most valuable being audit protection for those whose businesses are vulnerable to audits.
  • Throughout the process, the system will check your answers and offer advice regarding how to get the best tax benefits.

Cons

  • It's a significantly more expensive option than most other preparation services available, especially considering the finicky plan limitations.

Pros and Cons of H&R Block

Pros

  • H&R Block has less expensive options for having a CPA do a one-on-one tax review either virtually or in an office.
  • When customizing software options with add-on purchases, H&R Block lets you preview the total price before you get to the checkout.
  • An entire online database of information is available with research, tips, tools, calculators, and explanations of laws.

Cons

  • The online database setup and the software interface can both be a little difficult to navigate at first.

Final Thoughts: Which is Better?

Both of these companies offer paid tax filing software that includes informational resources and easy compilation of complex returns.

For people who run a business of any size, H&R Block is priced much more reasonably than large-scale enterprise plans for other services. In addition, this company is the best place to start if you just want information to help you fill out your taxes on your own.

For people who want a tax software with flexible pricing plans and the easiest-to-use interface in the industry, TurboTax is hard to beat. You don't need to know anything about tax forms or law. All you do is answer questions, and the software does the rest. It even gives you tips and advice for saving money along the way.

REFERENCE & RESOURCES


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