Tax Software: Turbo Tax vs. H&R Block

Overview

TurboTax and H&R Block are two big names during tax season. TurboTax is a software resource that Intuit, a software company, has been developing since 1993, and H&R Block is a tax preparation center that two brothers established in 1955. Now, H&R Block has offices all over the country and produces tax preparation software for a variety of customer needs.

Both TurboTax and H&R Block feature different packages that are tailored to specific users. Both companies provide options for personal users. Unlike H&R Block, TurboTax distributes software for small businesses.

How It Works

Both H&R Block and TurboTax use IRS metrics to automate calculations and complete extensive forms. Software helps taxpayers save time and money on tasks that would otherwise take hours or require assistance from a certified public accountant (CPA). Software will help you complete your taxes error-free.

TurboTax and H&R Block take advantage of the electronic filing system that the IRS created. A step by step process will help users file taxes and use this electronic filing system correctly. If eligible, many users may receive a tax refund by check or through direct deposit into a bank account.

Differences

The main difference between TurboTax and H&R Block is that H&R Block operates a nationwide franchise of tax professionals while TurboTax is just software. TurboTax is ideal for taxpayers who feel confident enough to file taxes without the help of a professional.

With H&R Block, a tax professional is available if necessary. In any case, TurboTax provides several resources for taxpayers to complete with professionals. Users can opt to have a professional review the completed TurboTax return. TurboTax also offers a service for software users to connect with tax professionals over the phone.

TurboTax

Intuit has designed several versions of TurboTax. These versions are available online and on a CD. In general, the CD or software download costs more than the online version. If you buy the CD, you can efile five electronic returns. For each version, state returns are available for an additional fee. You do not need to pay for TurboTax until you are ready to file your taxes. Each higher version of TurboTax includes features from the version below. The following is a synopsis of the different versions:

• Basic allows users to prepare and efile one federal tax return. You can use the online version, or you can pay the extra fee for a CD or software download. TurboTax 2009 can import relevant information from older versions in order to save you time.
• Deluxe performs a quick search of over 350 deductions and provides values for donations. The software will let you know if you are at risk for an audit and will provide tips to help you avoid a problem with the IRS.
• Premier provides services to taxpayers with investments and rental property. The software can determine gains and investment losses. TurboTax also helps taxpayers find rental property deductions. You can also use this version to report sales from employee stock purchase plans.
• Home & Business helps users discover business write-offs in addition to deductions that are specific to certain industries. This version will also help users find the right depreciation method.
• With TurboTax, you can prepare, print and e-file for free.

H&R Block

H&R Block's specializes in tax consulting services at its retail locations nationwide. H&R Block has complemented this service by launching software packages. All of H&R Block's programs import data from previous versions of TurboTax and TaxCut. Each version of the H&R Block At Home software comes with one free federal efile. Some of deluxe and premium versions include a state efile. The following provides an overview of the different versions:

• Free online software is available for basic tax situations. Users of the free version can file online. This version is not sufficient for preparing returns for self-employment, stock transactions, rental property, farm, or K-I income.
• Basic is similar to the free version, except it is available for download.
• Deluxeincludes features for investors and homeowners and includes personalized tax guidance in addition to assistance regarding the sale of stocks, bonds, and mutual funds. This version also provides audit support.
• Premium features live tax advice, Schedule C guidance, rental income assistance, and tax calculators.
• Professional comes with unlimited live tax advice from a professional by phone and email. The professional will review, correct, certify, and file your returns.
• Business options are available for corporations, LLCs, nonprofits, estates & trusts. The business software also features business tax planning resources.