Tax season is here, and many are turning to online services like H&R Block and TurboTax for tax preparation. Both offer user-friendly platforms, but which one is better? Let’s compare H&R Block vs. TurboTax.
H&R Block: Trusted Name in Tax Preparation
H&R Block has been a trusted name for years, offering various online filing options. They have a free version for simple returns, deluxe for homeowners/investors, and premium for self-employed. Their platform is user-friendly, with step-by-step guidance, access to tax professionals, and easy W-2 import.
H&R Block's online tax preparation programs for the 2024 filing season include four tiers: Free, Deluxe, Premium, and Self-Employed. The company also offers options for varying levels of support from tax professionals, including DIY at home with assistance, drop-off service, and in-person appointments.
Free Edition
The Free online edition is suitable for those with W-2 income, unemployment or retirement income, and who rent their home. It allows you to add information about dependents and includes a free state return.
Deluxe Edition
The Deluxe online plan offered by H&R Block is suitable for homeowners, investors, contributors to health savings accounts, and those looking to deduct child and dependent care expenses. It provides support for freelance and self-employed income, as well as coverage for home mortgage interest deductions, charitable giving deductions, and all other itemized deductions for those who choose not to claim the standard deduction.
The cost is $35, which includes free tech support, live expert help, Block's new AI tax assistant, and a digital archive capable of storing the past six years of returns. An additional $37 will be needed for each state return filed.
H&R Block offers assistance from their new AI Tax Assist and live tax professionals.
Premium Edition
The Premium online tier costs $65 and includes one free state return. Additional state returns can be purchased for $37 each.
This option caters to freelancers, independent contractors, and investors who may have multiple 1099s and deductible business expenses below $5,000, as well as those who own rental property or have sold stock or cryptocurrency.
Self-Employed
H&R Block provides an online edition to cater to the needs of freelancers, independent contractors, and self-employed taxpayers, including those who have taken on gig work.
The Self-Employment edition of the tax software offers support for common tax situations for self-employed individuals and small business owners. It includes features such as asset depreciation, business income reporting and deductions, and business expense tracking. The cost of this product is $85, which includes a state return, with an additional $37 fee for each additional state return. Similar to the Premium version, the Self-Employment edition also provides support for rental property owners.
Other Options
H&R Block offers Tax Pro Review add-ons starting at $55 for the Free edition. The Deluxe package with review is $100, the Premium is $160, and the Self-Employed option is $180. Each option includes a state filing fee of $37.
This add-on offers a tax professional's review, double-check of your return, and official signing before filing.
All programs offer live technical support for troubleshooting. H&R Block includes a W-2 capture feature for easy form submission through a picture. It also allows you to import previous tax returns from other providers.
TurboTax: Popular Choice with Comprehensive Support
TurboTax is also popular, offering similar features to H&R Block. They have a free version, deluxe for homeowners/investors, and premium for self-employed. TurboTax is known for its user-friendly interface, comprehensive guidance, and live CPA/EA support through TurboTax Live.
TurboTax's success can be attributed to Intuit's established reputation in do-it-yourself financial solutions, including QuickBooks, before acquiring TurboTax. Additionally, TurboTax offers convenient features for QuickBooks users.
Free Edition
The TurboTax Free Edition is designed for basic tax situations and includes a state return and e-filing at no additional cost, similar to offerings from other competitors.
Approximately 37% of taxpayers are eligible, with Form 1040 and limited credits being the only options available.
TurboTax allows for seamless importing from QuickBooks, unlike the other programs.
Deluxe Edition
The Deluxe online package is TurboTax's lowest-cost tier and is their most popular option. It can handle a variety of tax credits and deductions, priced at $59 with an additional $59 fee for each state return.
The Deluxe plan from TurboTax offers features such as maximizing mortgage interest and property tax deductions, organizing charitable donations, searching for tax deductions and credits, and covering education tax credits and simple expenses.
Premium Edition
The $119 Premium online plan is recommended for individuals with investments and rental property, as it includes coverage of related tax implications. Additionally, the plan allows for the download of one state return for this price, with an additional $59.4 e-filing fee.
The Premium edition of TurboTax includes over 500 deductions and credits and covers various investments like stocks, bonds, and cryptocurrencies. It also allows for automatic importing of investment data from participating financial institutions.
This edition can handle over 10,000 trade transactions, making it suitable for robust investment portfolios. It also supports cryptocurrency transactions and offers personalized guidance to determine your investor type and review your return effectively.
As of the 2023 filing season, TurboTax has merged the Self-Employed Edition into the Premium Edition.
Add-On Options
There are various options for upgrading to TurboTax Assisted, where a tax preparer can handle the entire process for you, ranging from $89 for TurboTax Verified Pro to up to $169 for Live Assisted. The final fee will depend on the complexity of your return for the 2024 filing season.
TurboTax offers "Desktop" versions of its software that can be downloaded and run on your computer. There are four options available: Basic ($50), Deluxe ($80), Premium ($115), and Home & Business ($130), all priced similarly to the online versions.
Key Differences
H&R Block may be better for those who prefer in-person support, as they have physical offices. TurboTax, on the other hand, is great for seamless online experiences and virtual live expert support.
Pricing and Features
Both H&R Block and TurboTax offer competitive pricing, but costs vary based on your tax situation and required features. Compare pricing and features to find the best fit for your needs and budget.
In conclusion, both H&R Block and TurboTax are reputable services that can help you file your taxes. Your choice between them depends on your preferences, tax situation, and budget.
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