Tax Prep Guide 2013: TurboTax vs. TaxACT vs. H&R Block Online

According to an informal 2012 poll, 86% of blog readers prepared their own taxes using software with a breakdown of 60% TurboTax, 21% TaxACT, and 16% H&R Block at Home. This nearly matches the findings of analytics firm Comscore, which found that of online filers 60% used TurboTax, 18% used TaxACT, and 15% used H&R Block at Home.

I’ve used all three programs over the years and each has their clear strengths and weaknesses. The NY Times recently did their own 3-way comparison with very similar experiences to my own. They actually called in for help and reported the results, so I’ve added this factor into my lightning review:

The major differentiating factors are price, time-saving features, audit support, and ability to answer specific tax questions. In terms of accuracy, I think all three are nearly identical. All three offer a “Maximum Refund Guarantee” (relative to competing software) as well as an “Accuracy Guarantee” (relative to your tax liability) that says that they will pay any penalty and interest assessed by the IRS or your state due to calculation errors on their part (though H&R Block limits this to $10,000). Actual cost can vary widely with sales and discounts, listed here are just the everyday prices.

tt180TurboTax Online

  • Most expensive. Federal Deluxe regular price is $29.99 w/ e-file. However, you now need Premier at $49.99 if you have an investment gains or losses. State return price is $36.99.
  • Best import support from payroll providers and financial institutions for automatic import of W-2 and 1099 forms. Works with free “ItsDeductible” program to help with recording charitable donations.
  • Moderate audit support (you get help, but no in-person representation)
  • Specific tax advice – Free online chat included. Did not provide definitive answer to NYT reporter’s question.

Bottom line: The time-saving choice if you have a lot of brokerage transactions, W-2s, or other 1099 forms to electronically import this year. Also if you have a lot of details to import from last year’s return with TurboTax. It may be worth the extra cost to avoid tedious data entry.

ta200TaxACT Online

  • Cheapest overall with Federal Deluxe regular price at $12.99 w/ e-file. Federal + State return combined including e-file at $17.99.
  • Limited import support (worst of the three).
  • Limited audit support (worst of the three).
  • Specific tax advice – Phone support only, online chat not available. Did not provide definitive answer to NYT reporter’s question.

Bottom line: The value choice if you just want accurate DIY tax return software and don’t need any extra assistance.

hr160H&R Block at Home Online

  • Middle-of-road pricing. Federal Deluxe regular price is $29.99, but includes investments. State return price is $36.99.
  • Moderate import support for 1099s and W-2 (not as broad at TurboTax, better than TaxACT)
  • Best free audit support. Only product that includes an H&R Block Enrolled Agent actually attending your audit in-person. However, consider whether you would hire your own representative in the actual event of an IRS audit.
  • Specific tax advice – Free online chat included, only one to provide definitive answer to NYT reporter’s question.

Bottom line: The got-your-back choice if you want the assurance that a federally-authorized enrolled agent will guide you for free through a potential albeit unlikely audit. Anecdotally the one most likely to provide answers if you have harder tax questions.

Comments

  1. TurboTax is getting much worse this year. 1099-B support is removed from the online deluxe version. I bought TurboTax deluxe fed + e-file + state desktop this year, unaware that I have to pay extra $20 for state e-file, which information they deliberately hide. I will switch to H&R Block next year.

    • I was able to load my 1099-B into TurboTax Deluxe this year. I had the CD version, not online…and had to enter manually (the import failed). But was able to do it.

  2. DollarBill says:

    Regarding needing TurboTax Premier for investment gains and losses…According to the “Which TurboTax is right for you” chart on the back of the TY 2013 software box, Premier has “Extra guidance for investment sales…” which implies that Deluxe has some guidance for investment sales. This chart is the same as in previous years when I had no problem reporting investment sales with the Deluxe edition. Can someone confirm that investment sales can no longer be reported with 2013 Deluxe?

    • Cooper's Dad says:

      The answer depends on your resources. Already using Quicken to track investment basis, purchases and sales? Just transfer this data in Schedule D in TT Deluxe (which contains EVERY tax form that exists for manual data entry…it just doesn’t provide “guidance” or otherwise walk you through this portion of your return preparation). Since 2012, brokerages have been required to report both sale price AND original purchase price/basis of stocks and in 2013 this was expanded to mutual funds also. So your brokerage 1099-D will provide the necessary info to report if you don’t track this yourself. This really takes the wind out of TurboTax Premier’s value proposition. With my Quicken info already tracked and better reporting from my broker, I traded down to TT Deluxe (on CD) this year.

    • In the past I’ve entered investment sales into TT Basic edition. Like Deluxe, it has (or at least had) all the forms, just without guidance. One year I even entered business income into it manually. This was before the IRS had their own e-file software (Free File Fillable Forms).

      Since I bought a house I’ve been using Deluxe. In 2013 I had ESPP stock sales; I intend to try to stick with Deluxe despite Intuit’s repeated suggestions that I upgrade.

      I don’t know why Intuit keeps moving features up into supposedly higher editions, instead of just increasing their prices. It’s annoying and if they keep it up, I’ll switch software just on principle.

    • Yes .investment sales can no longer be reported on Deluxe. It walks you through, i filled out all the boxes and then told me i had to upgrade to premiere. When i declined, it removed the info that i took the time to enter. Same with my small $ from being an independent agent. Cleared what i hand typed into the tax form, and made me use home & business for $99.00.

  3. I used TaxAct for the second year in a row. It worked fine for me and my most complicated thing was that I have a small ebay business with inventory. I didn’t have to pay for the federal return. My state (PA) was supposed to be free as well according to PA Department of Revenue’s website but TAxAct was trying to charge me 14.99 for that. I didn’t do it, I used a free fillable forms website approved by PA and printed the return and mailed it, because there was a glitch with a date in my return that rejected my efile from the free fillable forms website.

    I really don’t see a need to pay for a state return because once you have the numbers like inventory and expenses filled out in your federal return, it is easy to transfer that to a state return. I would guess that most states have simpler tax returns than federal so it’s mostly just a matter of reading their instructions and copying the numbers.

  4. I was always told you can do your Fed taxes for free at freetaxusa.com. Have you ever used this?

  5. Online Turbotax requires Premier for capital gains/losses. Buy the box version you can do it with deluxe (maybe even basic).

    I WAS a ten year customer of TT Online. I am moving over to TaxAct. It looks like I will do the free version, my state has a free online return.

  6. Another thing to note is that for the Federal Free filing you can use all 3, but if you have any capital gains, HR Block and Turbo Tax don’t let you use the free version. TaxAct free version did include capital gains. Also Like was was said earlier about PA taxes charging, HR Block will do NY state return for free, but it tried to charge me. I chatted a rep, and she gave me a code to cover the cost.

  7. http://www.prnewswire.com/news-releases/leading-nonprofits-join-the-walmart-foundation-to-launch-myfreetaxes-the-nations-only-free-online-federal-and-state-tax-preparation-and-filing-initiative-for-eligible-taxpayers-242260041.html

    - FREE Federal and FREE STATE filing if under $58k AGI
    - Uses H&R Block Online
    - Over half of US households qualify
    - Provided by GoodWill, the United Way, and the Walmart Foundation for the past 6 years
    - Start at MyFreeTaxes.com or use a link from your local GoodWill site

  8. I’ve used TurboTax Online for the past 10 years or so, but I’ve been getting annoyed with the ever-increating cost. We were somewhat tied to it, though, with year-after-year records for a home business my wife had, but she shut that down in 2012 so for 2013 we decided to give TaxACT a try. I’d say it’s a bit less user friendly, but really both have their quirks. I tried out TurboTax in parallel (not intending to file), to see how its refund calculations compared (fairly close) but it required me to upgrade to the Home Business version (more $$) just to enter some babysitting income! That pretty much sealed the deal on ditching TT for me.

  9. This was my last year using TurboTax because the price keeps increasing for state tax filing. Next year, I will be giving a TaxAct a chance.

    BTW -
    1) everyone should check to see if any of your banks and/or insurance carriers offer a discount. Usaa does.
    2) if your work income consists of only W2′s, the odds of you getting audited are virtually zero. If you own a business, the odds skyrocket.

  10. I generally use TT. a couple of years ago I gave TaxAct a try but didn’t like it. I’m not sure what I’m going to use for this year yet.

    A few weeks ago I learned just how big this business is. TurboTax is $1.5B of Intuits total annual revenue of $3B (Quicken is only $200- $300 million). It also happens to be their most profitable at a 60% margin. Not bad considering all the cheaper alternatives out there. They are doing something right to pull people through, especially if you consider it doesn’t cost anything until you are ready to complete if using the on-line version; giving people plenty of opportunity to walk away.

  11. Hi, I was researching problems with TurboTax and saw this site, which matches my experiences, so I thought I would share, if anyone is still reading. I’ve used TT online since 2001 at least. I have always paid whatever was requested from deluxe edition. 3 huge hits this year.
    (1) capital loss carryover required an upgrade to Premiere version. I have had a capital loss carryover for many years. I said NO THANKS and found out that it STILL showed the $3000 loss on the next page… not sure if it was calculated right or not, but I figured i would wait and see..

    (2) I sold house in 2013. BOOM: Need to upgrade to Premiere. OK, I sucked it down. Only to find out that I don’t even need to file the form (8949 I believe?) since I have no capital gains (I knew I would not have to pay tax anyway with the $500,000 exclusion rule).

    (3) Final straw: Last year my wife had some in a sole proprietorship for first time. THis year she did not, so I did not add that section in. At federal error check time, it tells me she is missing information about some conference I expensed LAST YEAR, to fill in the raw number, with no context at all. So I realize I did not visit “business section” (which I thought was blank since I did not add it), and go there to find I cannot edit it without upgrading to PREMIERE now!! A second upgrade. All I want to do, right or wrong, is delete the schedule C for her where she had minimal income last year and NO BUSINESS AT ALL this year. Googling it, it says that turbotax needs to mark the business as closed technically. Yeah, well in the past I never did that (knowingly at least). Pretty sure I just didn’t file the schedule C. But this version creep is enought. I’ve NEVER questioned paying whatever deluxe added, and it has varied wildly over the years depending if I am late, early, etc. but I am sick of this. I need basic calcs and know what to expect roughly… that is why I do taxes myself instead of going to an accountant, I like to understand how things factor together. I will try TaxAct this year despite hearing some stories that it is a bit longer to fill out… I just feel that I am being nickled and dimed,.

    (D) Finally, as second anecdote of time frustration with “simple” TurboTax, A couple of years back when my wife used her car in business, I filled that out to expense it. The next year I no longer used the car. TT needed me to fill out some “sale or disposition of car” form… What the heck? Again it was only in the error check section, with no guidance / questions / advice. I googled that too and did find out others had this problem with no resolution, so to manually delete the form… but this is crazy, there is no guidance on it, I never told them I sold the car, just a lack of taking an expense on it when it was no longer appropriate.

    Finally, I have had trouble with clarity of business expenses vs. 1099 income when I did have those expenses in past.

    Overall my message is this: I can get through TT very quickly now, but anything non-vanilla (change from 1 year to next, business expenses being put in with 1099 vs business section for things like professional insurance), there is either a lack of clarity of a raw form to fix with no explanation. I’ve navigated around these in the past, but the niggling over upgrades to data for data I did not even enter (carried over from final year) is the final straw. I read somewhere that I can just delete the federal version and start over from scratch, not importing from last year. But then I will lose my carryover, etc. and not even sure then what version I will need. Time for a different product. Or maybe when my wife does have a real business again in future (she is health professional who has worked for employer and on her own at different times) it will be time for an accountant. I do NOT trust any of these products for more setting up taxes right for any kind of real business other than small personal individual propietorship. But for now, I liked doing my own taxes. But no TurboTax with this hassle. It should make my life simpler. I used to go by hand and with minimal capital gains / stocks etc, this product is making my life harder year after year in a small way each time that makes me pull out my hair.

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