In a recent 3-part post series, we took an in-depth look at the three most popular online tax preparation platforms in an effort to determine 1) how they work, 2) what income/deduction options they offer, and 3) what is free/what you have to pay for. If you missed any of the three posts, I’ve listed links to each below:
While these posts were very informative if you are already using one of their respective platforms, a very important aspect missing from the articles was a comparison of the 3 to determine which is best for your specific tax preparation needs. As such, the purpose of this post will be to compare TurboTax, H&R Block, and Tax Act side by side to see what the benefits and pitfalls of each program are.
Let’s get started!
For easy comparisons, we’ll break our analysis down in to the relevant categories listed below:
Between the three big tax prep online platforms, pricing is one of the biggest and most important differences that we see:
- TurboTax is by far the most expensive, both in the respect that their free edition offers the fewest features and the paid versions cost more than the equivalents at H&R Block and Tax Act.
- Basic = $20, Deluxe = $30, Premier = $50, Home/Business = $75
- State tax filing involves an extra fee = $28-$37 per state.
- If you have business income, you are required to use the $75 version.
- If you have income from sales of taxable securities/stocks/mutual funds through a 1099-B form, you are required to use at least the $50 version.
- In my opinion, the reason that TurboTax is the most expensive is simple – because users allow it to be.
- What I mean by this is that TurboTax users have been using their platform for so long, trust it, and are so used to having their information automatically imported year-to-year that they simply do not bother to leave, even if TurboTax isn’t necessarily the perfect fit for them.
- Since TurboTax does cost the most, if you are a current user, I would highly recommend that you make sure to have a good reason (i.e. ask yourself, “is it worth the cost?”) that you want to keep using it, given that there are indeed other dependable options available out there to you.
- H&R Block represents the “middle of the road” option as far as pricing is concerned.
- Basic = $20, Deluxe = $30, Premium = $50.
- State tax filing involves an extra fee = $28-$35 per state.
- If you have business income, you are required to use the $50 version.
- If you have income from sales of taxable securities/stocks/mutual funds through a 1099-B form, you are required to use at least the $30 version.
- Tax Act is by far the cheapest option, both regarding what their free option provides and that their upgraded versions are very inexpensive also.
- Deluxe edition = $9.95.
- State tax filing involves an extra fee = $15 per state.
- If you get the Ultimate Bundle, it is only $18 for the Deluxe edition plus a state filing. Talk about value here!
- All types of income are included in the free edition! This includes business income, sales of securities covered in a Form 1099-B, and income from rental real estate. It’s pretty awesome that all of that is included in a free edition, right?!
- Since Tax Act is by far the cheapest option, you are probably thinking that it must be hard to use or lacking in some aspect, right? This is not the case. Read below to learn more.
User Interface / User Experience
In my opinion, the overall user experience from the TurboTax, H&R Block, and Tax Act online tax preparation platforms are pretty much equivalent. In fact, it is likely that they all benchmark each other (since there is nothing stopping their competitors from logging in to their systems and seeing what a competitor offers!) to make sure it is like this.
- All three platforms…….
- Save your information you entered immediately and make it available for you to log in at a later date and continue/finish your tax return.
- Require you to use a paid version in order for them to import your previous year tax information in to your current year return or to import your employer’s W2 data based on their EIN.
- Are logically organized by tabs across the top of the screen, proceeding from personal info to federal income and deductions, then on to state taxes and filing.
- Feature counters on the site sidebars that update automatically to show you how much federal and state return you can expect “on the fly.”
The only difference I found in the overall user experience of the three platforms was that there seemed to be sections of the Tax Act and TurboTax site that contained very hard to understand language about whether a certain functionality (which required a paid upgrade) was expressly required to accurately complete my return or if it was optional.
I discussed these roadblocks in detail in my three posts of the series mentioned above. Briefly, the confusing section on the Tax Act site involved the Life Events tab. Unfortunately, TurboTax ranked last in the user interface category based on the NUMEROUS screens that would pop up trying to get me to upgrade at every step of the way, when in reality, it was not needed.
I would rank the user interface at H&R Block as my favorite because of the simplicity and clarity in which they conveyed the features being offered.
Income and Deduction Categories Covered
Detailed screenshots of the income and deduction categories that are covered by each of the three platforms can be easily viewed by clicking any of the 3 posts in my series mentioned at the top of this article.
After going through everything, I can conclude that TurboTax, Tax Act, and H&R Block (likely because of benchmarking) actually offer all of the same income and deduction categories. So, you don’t have to worry about which platform you choose in this respect.
Accuracy & Security
As far as I can tell and have read on the subject, TurboTax, H&R Block, and Tax Act are all equally accurate, reliable, and secure. So, you don’t have to worry about which platform you choose in this respect. Personally, I would/have trusted entering my tax information to any one of these platforms.
What’s the Bottom Line – Which is the Best?
Having dissected each of these three programs one by one and listed out the comparison points above about price and user experience, the question then becomes, “What can we conclude – which is best?”
- In my opinion, Tax Act is the best overall because it is pretty easy to use and gives you all of the same functionality as TurboTax and H&R Block, but at 1/4-1/5 the cost! Can’t beat that, right?!
- If you’re looking for the easiest to use platform that is likely to give you the smallest headache in doing your taxes, go with H&R Block.
- Although not bad by any means, TurboTax is, in my opinion, the least attractive option of the three based on what we’ve discussed here.
- However, it is a perfectly good way to do your taxes if you are comfortable with them and do not want to take the time to change platforms (for example, you’ve been using it for years and just want to continue). It will also save you money over using a CPA as well. After all, we’re only talking about $100 per year here at most, so it’s not going to bankrupt you to use TurboTax by any means! haha
- However, if you are strapped for cash, there are definitely better, cheaper ways to go in my opinion.
How about you all? Have you used TurboTax, H&R Block, or Tax Act this year or in past years to prepare your tax return? If so, which do you think is best and why?
Share your experiences by commenting below!