Although no one likes filing income tax returns, companies such as H&R Block and TurboTax make the process easier. Both companies allow you to prepare tax returns online or by downloading software to print and mail them in. When it comes to minimizing your taxes, you may want to consider working with a professional accountant.
Since 1955, H&R Block has provided tax filing services to consumers. Since then, it has become one of the most popular filing services because it combines simple tools with helpful guidance.
No matter if you are new to filing taxes or have been filing for decades, that's helpful. However, tools and guidance don't come free. Currently, H&R Block offers four online filing options.
Listed below are the choices, their features, and their prices:
H&R Block Filing Options
|H&R Block Free Online
Best for new filers and simple tax situations
Supports form 1040 with minimal tax credits
|H&R Block Deluxe
Best for maximizing tax deductions
Includes forms for homeowners
Allows you to itemize your deductions
|H&R Block Premium
Best for investors and rental property owners
Provides accurate cost basis
|H&R Block Self Employed
Best for small business owners and self-employed
Provides all previous features, plus Schedule C
The free filing option is the cheapest. However, only basic returns are supported by this option. The 1040, Schedule EIC for earned income tax credit, and Schedule 8812 for additional child tax credit are the forms it supports. Form 1095 (A and B) can also be used with some other common tax forms: Form 1099 (B, DIV, INT, and R), 1098 (E and T), and 1095 (A and B). You will need to upgrade to a paid plan to file other forms.
H&R Block's physical locations are one of its most notable features. For those who don't want to file online, you can visit one of the 10,000 U.S. tax offices. Tax professionals there will guide you through the process.
H&R Block also offers an online tax professional service so that you can work with a tax pro without visiting a store. You upload records and the tax pro does the processing for you. A tax professional can also review your tax return for you before filing if you purchase Tax Pro Review.
TurboTax was established in the mid-1980s. Intuit's ownership plays a part in the popularity of the program. The company also makes Quickbooks, which is used by millions of companies to manage their accounting. In addition to its user-friendly design, TurboTax also offers step-by-step guidance and is easy to use.
TurboTax has a free filing option like H&R Block that allows you to file your federal return and one state return for free. However, the free filing option supports only simple 1040 tax returns. In order to itemize your deductions or to use any other forms, you will need to upgrade to a paid plan.
TurboTax offers the following options:
TurboTax Filing Options
|TurboTax Free Edition
Best for simple returns and Form 1040
Easy import, error check, refund explanations, and dependent deductions
Best for maximizing deductions and for homeowners
Charitable donations calculator
Best for self-employed, independent contractors, freelancers, consultants, and small business owners
Access to tax experts
TurboTax does not have physical locations like H&R Block, but it does provide access to tax experts such as CPAs and EAs. Getting access to an expert will cost extra, but there are four plans available, corresponding to the four plans listed above.
TurboTax vs. H&R Block: Pros and Cons
TurboTax Pros and Cons
- An interactive user interface: Both TurboTax and H&R Block software programs have an interactive user interface that walks you through the filing process step by step, but TurboTax does so in a more friendly way. The steps are more akin to a conversation with a tax preparer than filling out a form, and the clean design makes the process less overwhelming while still letting you jump around between sections.
- Integration with QuickBooks: QuickBooks is a bookkeeping platform for small businesses. It is owned by Intuit, the same company that owns TurboTax. As a result, TurboTax can integrate with QuickBooks to simplify your tax preparation process. You can import your information from QuickBooks into TurboTax if you're self-employed or own a small business.
- TurboTax may have the highest ratings, but it is also the most expensive. There is a free version, but it only supports simple tax returns, so many people will need to purchase the Deluxe version. The Deluxe version costs $60 for federal filing, plus additional fees for state filing.
- If you use the Live edition of TurboTax basic, deluxe, premier, or self-employed software, you can get live tax expert support via video chat. It might not be the best option for you if you don't feel comfortable with video chatting or if you only want to go to an office since TurboTax does not have brick-and-mortar offices.
H&R Block Pros and Cons
- H&R Block's free edition is more robust than TurboTax's, and it can handle more tax situations, including student loan interest deductions and tuition and fee statements.
- Support in person: H&R Block offers Online Assist, an add-on to its online software that allows you to get on-demand tax assistance. H&R Block has about 11,000 retail offices for you to choose from if you prefer to file in person. Alternatively, you can drop off your tax forms at an H&R Block office without having to meet with anyone.
- If you have a complicated tax situation and require forms for things like rental property income, stock sales, or small business expenses, H&R Block isn't the cheapest solution.
- There is no military option: Not all tax preparation companies offer discounts or special products for military personnel, but many of them do. Active-duty members of the U.S. military can file their taxes for free with TurboTax's online products, but H&R Block does not offer this.
Which is better - HR Block or Turbotax?
So, who is the winner? That depends on what you're trying to accomplish. With its free filing option, H&R Block covers more filers. In terms of price, both Deluxe options are the same, but TurboTax's Deluxe option supports more forms that self-employed, freelance, and contract workers may need. TurboTax is somewhat simpler with clearer language than H&R Block, but both services are user-friendly.
Which tax filing service you choose may be a matter of personal preference beyond these factors. One may simply prefer the look of one over the other. Additionally, H&R Block may be a suitable option for those who prefer to file in person.
For many people however, using a professional accountant can help you save more money than what you may pay for a tax software. It is worth consulting with an accountant to make sure you are making the right choice.
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