Online Tax Preparation: TurboTax Vs. H&R Block

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So you've decided to take the plunge and do your own taxes this year. With all the online tax programs touting their user friendly benefits and high refunds, it can't be too hard to find a program that works for you, right?

Program Selection And Costs

The first step is selecting one tax preparation program over another. There are dozens of options, but most taxpayers will consider only two: H&R Block At Home and TurboTax, the most popular online tax preparation programs on the market.

The prices for H&R Block and TurboTax are nearly identical, with both offering a free program for very basic returns, a deluxe edition for $29.95 and a premium program for self-employed filers that runs $49.95 on H&R Block and $74.95 on TurboTax. TurboTax also offers an edition for corporations, partnerships and LLCs for $129.95. (For discounts on TurboTax tax preparation, check out these TurboTax Coupons. For discounts on H&R Block tax preparation, check out these H&R Block Coupons.)

Both services offer programs for state tax returns for an additional fee.

The Shared Basics

Both H&R Block and TurboTax allow taxpayers to import current income documents such as W-2s, 1099-INTs (interest income forms), 1099-DIVs (dividends) and 1099-Bs (stocks and capital gains).

Additionally, both programs interface with other personal finance programs you might already use, such as Quicken and Mint.com. TurboTax is even capable of importing data from competitors H&R Block and TaxACT, according to MacWorld.com.

Both programs offer support by phone, email and instant chat. H&R Block also offers the option of going into a local office to receive face-to-face assistance.

When you compiling your tax information, you'll see refund meters and easy-to-understand explanations for the various sections of your return with both programs.

How Do They Stack Up?

H&R Block At Home and TurboTax are alike in many ways, but when the two tax prep programs were put to the test recently by several technology bloggers, there was a clear winner on several key criteria.

  • Deductions: "There were more deductions from TurboTax, even compared to H&R Block's one-two punch of an online system and review from a professional tax preparer," wrote LifeHacker's Melanie Pinola on "Lifehacker Faceoff: H&R Block vs. TurboTax Online Tax Prep."
  • Usability: Ron Haynes of the Wisdom Journal compared the two in "TurboTax vs. H&R Block Online: Which Is Better" and gave a thumbs up to TurboTax for being "more user-friendly and natural to use.” He also noted that TurboTax’s phone support answered a lot more quickly."
  • Audit Warnings: Haynes also appreciated TurboTax's "audit meter," which forecasts the taxpayer’s chance of getting audited by the IRS.
  • Navigation: John Rizzo of Macworld found a friend in TurboTax's "fluid approach to the tax interview with some special navigation features that enable you to jump around fairly effortlessly." The program's flags allow users to set calendar date reminders in order to collect necessary information. H&R Block didn't rate highly for easy navigation and didn't have a similar flag feature.
  • Community Support: Rizzo also gave TurboTax the edge over H&R Block regarding community support. TurboTax's Live Community allows users to fill out their tax preparation interview while asking tax questions to the Live Community. "But more interesting is that TurboTax’s Live Community is a kind of a social networking area," Rizzo wrote. "When you click on a question, you’ll see responses from multiple users, as you can in an online forum. You can rate answers, click to send a thank you to the answerer and click a button to watch the topic, which sends you an email when someone else responds." H&R Block did not provide the same robust functionality and in some cases featured incorrect answers to tax questions.
  • Price: Depending on which package of services you need, Pinola found that H&R Block is slightly less expensive than TurboTax.

Features Vs. Price

Taking into account the factors reviewed by these bloggers, TurboTax is the clear winner. It offers a feature-rich program where users can access the answers they need, navigate the tax code and check for errors.

H&R Block – a lower priced alternative – does an adequate job and offers users options for accessing live assistance, especially with its Best of Both program. However, the H&R Block program can be harder to navigate.

If price is your main concern when selecting between the two programs, you might want to consider H&R Block. However, if usability and navigation are more important, you might want to consider TurboTax.

It is important to keep in mind that the opinions expressed above might not match your experience with either program. Therefore, it might be a good idea to try one program this year and the other program next year to see which you prefer. This will help you to decide which program works best for you.

Sources

Last Updated: February 23, 2012
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About Cynthia J. Drake Cynthia J. Drake is a contributing author to CanDoFinance.com. Cynthia is a personal finance writer who lives in Michigan.

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