H&R Block At Home Review: Do-It-Yourself Tax Prep

Overview

Nobody really likes preparing their taxes, even when a refund is coming. It wasn't all that long ago that you either resigned yourself to a lengthy, paper-ridden ordeal in your home office or gathered every receipt up into the proverbial shoebox and headed out to a tax preparer.

Technology has come to the rescue for many of us, reducing an odious task to one that's just not pleasant, while also boosting the accuracy of the results.

H&R Block's tax prep software, At Home, is available in a variety of versions for use in the cloud or for downloadable or retail purchase to install on your PC.

For this review, I tested the Premium Edition of H&R Block At Home. It sells for $64.95 for use on your own computer, or for $49.95 if you use the cloud version. Also available are the Premium and Business Edition, which can only be bought for PC installation ($79.95); the Deluxe Edition ($44.95 for PCs or $29.95 for online use); the Basic Edition ($19.95 either way); and a free Federal filing (if you use Form 1040EZ and have less than $100,000 in income).

All of these come with free electronic filing for the federal return. Software for one state is included, too, but electronic filing is an extra purchase for state returns, except for New York State. Each of the various versions allow you to prepare and e-file up to five federal returns.

Performance

I installed the Premium Edition from a disc. Installation is automated and the application installed and launched very quickly, within two minutes. It then proceeded to check for updates-- of which there were several -- and to download and install them. This also was accomplished rapidly. In fact, while the screen advised that the process would take about six minutes, it actually took closer to two minutes to download and install the updates on my Lenovo T400s, which was running Windows 7.

As I found in testing TurboTax for a recent review, TurboTax is actually a bit more granular than H&R Block At Home when reporting the status of upgrading. TurboTax presents a matrix with quadrants for downloading federal updates, downloading state updates, installing federal updates, and installing state updates.

In contrast, H&R Block at home simply informs you that it is downloading and installing updates. (I don't see where the extra information presented in TurboTax would be useful, but it's there if you want it!)

The user interface for all three in-house tax preparation applications -- TurboTax, H&R Block At Home, and TaxACT -- is very similar. So, too, is the guidance through the different aspects of tax preparation.

H&R Block, though, offers one advantage that the others don't. If you run into any snares in doing your taxes, you can always visit one of H&R Block's offices for in-person assistance.

Entering Information (or Importing a Past Return)

In using At Home (or other tax prep software), the first step is to either enter personal information or transfer it from last year's return. H&R Block at Home will transfer last year's files from TurboTax or TaxACT. (Ideally, this could save you a bit of effort. However, I had a number of returns that were prepared using TurboTax last year, and H&R Block did not find them until I pointed the software exactly to the location they were stored.)

While TurboTax gives you the option of importing all of the returns at one time, H&R Block at Home insists that you choose a return to be imported.

That said, the return I chose got imported without problems, and the personal information as well as W-9 and 1099 issuers from the prior year were also imported.

You can add and delete in these areas, but if you have the same sources or income, not having to enter the information is nice.

Handy Forms View

Every year, the number of taxpayers who feel comfortable in preparing their returns increases. Many are getting to the point where they know what forms and schedules need to be prepared, and having the application guide them through every step of the way can become annoying.

H&R Block at Home, like TurboTax, has a forms view, which provides direct access to a specific form. You can switch back and forth between the guided process and direct forms entry. This is handy if you pretty much know your way around income and deductions, but you want the application to provide more guidance in other areas such as the home office deduction or a casualty loss.

As with TurboTax (the unofficial benchmark for this type of application), H&R Block at Home uses a vertical panel on the right side of the screen to display the tax owed/refund amount as you go through the program, as well as program and tax help. The FAQ questions presented on most screens are relevant, and many taxpayers will find them easy to use and helpful.

Getting help on a specific form using the "search" option did not prove as satisfying to me. On a number of searches for instructions on specific forms using the forms view, I found the search and help to be somewhat circular, bringing me back to previous screens rather than to the help I sought. This only happened occasionally, however, and it was always in the area of how to use a specific form.

State Tax Returns

The edition I tested comes with one free state program. When I finished preparing the federal return and clicked on the state tab, I was presented with a list of states so that I could download the one I needed. If you require multiple states (for example, if you work in two states, or you work in one state and a partner or dependent works in another), you can purchase additional states. The state preparation application works exactly like the federal, so there is seamless movement through the entire preparation process.

Both the federal and state applications give you with the option of either printing or efiling the return. All of the H&R Block at Home federal editions give you up to five free federal efiles. You may need these multiple efiles if you are amending a previous year's return and then filing a return for the current year, or if you're filing separate returns for a spouse and/or dependents, for instance.

None of the state programs include efiling except New York. While charges for efiling a state return may seem a bit arbitrary, it's because efiling costs actually differ from state to state.

Conclusion

All three of the most popular in-house tax preparation applications are similar in the way that they operate, and all three produce accurate returns for most users. Yet while many taxpayers will get good results with H&R Block and the others, please keep in mind that software is no substitute for education and experience. There are situations where you should definitely seek professional assistance in preparing your return. If you misunderstand how a transaction needs to be handled on a return, the interest and penalties can amount to a significant amount.

Also keep in mind that while each tax prep software vendor promises "audit support," this support may not be exactly what you think. In the worst case, the software vendor might supply you with an Enrolled Agent (EA) who is someone that has passed a difficult exam given by the IRS to go with you to an audit meeting. But the EA is there just to explain why the software handled a transaction the way it did. An EA, like a CPA or attorney, can legally represent you before the IRS or state tax authorities, but only with a power of attorney and a substantial fee. You're not getting this legal representation with your software purchase, and unless there was an error in calculation or application, you are going to be responsible for any penalties or interest.

But most taxpayers won't find themselves in this kind of a bind. Even if you itemize your deductions, have a home office, and use a car for business purposes, H&R Block at Home will walk you through the process rather easily, asking relevant questions to prompt you to enter the right figures.

All three of the major tax prep software vendors, and a number of online-only tax prep Web sites, will let you prepare and file a correct return. H&R Block, however, will also allow you to bring your completed or semi-completed return to one of their stores for assistance. This makes it an especially attractive choice if you have questions about how to do a return properly.

Pros:

• If you get stuck in doing your return, you can go to an H&R Block store for assistance
• Wide variety of PC- and cloud-based versions
• Quick installation and launch

Cons:

• Search and help functions aren't always that useful
• Importing last year's returns can be a bit cumbersome

Individual Ratings: *

Software & Support 
Upgrade Capabilities 
Usability 
Design 
Performance 
Features 
Price/Value Rating 
* Ratings averaged to produce final score