H&R Block Tax Prep Software Review: A Contender to TurboTax

by Reads (11,089)

When it comes to software for do-it-yourself tax returns, TurboTax holds the biggest market share, and TaxACT is a strong up-and-comer. H&R Block is still far better known for its tax prep services by human tax professionals than for its PC software. H&R Block’s At Home software, though, is another offering you might want to consider, depending on your tax return filing needs.

Among the three major providers of tax prep software for consumers, H&R Block carries one important advantage: the company’s huge number of brick-and-mortar tax prep places, amounting to more than 11,000 retail locations and an additional 4,000 franchised offices. In fact, H&R claims that it now prepares one in six tax returns filed in the US. So if you begin prepping your return with At Home, and you run into any snags, you can easily turn it over to one of H&R’s tax preparers.

Some of the features in At Home can be particularly useful and convenient. On the other hand, though, tax guidance in At Home can be kind of hit-or-miss, so the product is best suited to those with at least some previous experience with tax prep software.

At Home tends to be much less expensive on the whole than market leader TurboTax. You can even file your taxes for free. Yet H&R’s costs can be relatively high for state tax software and filing fees. (We’ll have more about the pricing structure for At Home further on this review.)

Like its competitors, H&R offers multiple options for do-it-yourself tax filing. You can prepare your return either online or on your PC. Each edition of At Home has a different feature set. Editions of At Home include Free Basic, which is the free online version, along with downloadable software packages that include Basic, Deluxe, Premium, and “Premium & Business.”

The main difference between Premium and the less pricey Deluxe is that Premium supports Schedule C and related forms for self-employment and rental property income. Premium & Business, the most expensive of the lot, is designed for those who are filing both their own personal returns and tax returns for a corporation, partnership, LLC, or non-profit organization.

For the purposes of this review, I tested Premium. However, if you itemize your deductions but you don’t have any income from self-employment or rental property, you should be able to save $20 and use the Deluxe edition instead.

Some very handy features

When you start up the At Home software, the Welcome screen asks whether you want to start a new return, file an extension, track a refund, continue working on a return, or check for software updates. As you work on your return, you really should keep on top of available updates. Many taxpayers who prepare their own returns just aren’t aware of how important it is to continuously update the software until all returns are submitted.

In terms of general workfow, At Home is similar to competing products. There’s a top ribbon that displays headers for the different sections of the preparation process (e.g. Welcome, Federal. State, File, and Plan). Underneath each general head are tabs for specific areas such as personal information, income, and the like.

In some ways, it feels as though At Home does not provide quite as much hand-holding as either TurboTax or TaxACT, two offerings previously reviewed as part of this series.

However, I very much liked the vertical column at the right-hand side of the screen, which keeps track of refund/payment status.

Other convenient features include sets of FAQs pertaining to particular data entry screens, plus buttons at the bottom of the screen for the Personal Tax Guide and for asking a tax question.

Starting with the 2011 editions, you can now import last year’s returns into At Home if they were done in TurboTax or TaxACT. 

Pricing is kind of complicated

The pricing structure for H&R Block At Home can get kind of complicated. The Free Basic online edition is just about entirely free, and it doesn’t restrict you to using Form 1040EZ. The online edition includes a federal return, a state return, a single federal e-file, and — for Form 1040EZ users — a single state e-file.

As for the downloadable Basic edition, the software for the federal return is also free. However, you must pay $36.95 to download the state software and $19.95 to file the state return. Other tax prep software vendors also charge extra for state software and state e-filing, but H&R’s pricing in this regard can be comparatively steep.

The Deluxe edition of At Home ($29.95) and the Premium edition ($49.95) each include both a federal and a state return, along with e-filing for each of these returns. Yet if you need to ready multiple state returns, you’ll have to pay $36.95 for the software for each additional return. Folks in this category include those who live in one state but work in another, or who have spouses/partners who work in a different state. Also with the Deluxe and Premium editions, you need to pay a $19.95 filing charge for each state in which you e-file.

On the other hand, several states in the US don’t impose personal state income taxes. If you live in one of those states, and you prefer to be able to prepare your return while offline, then the Basic, Deluxe and Premium edition of At Home could give you a very good deal.

The Premium & Business edition ($79.95) includes payroll and employer forms, five free personal federal e-files, one personal state program download, and unlimited business state programs. Again, though, you’ll need to pay extra for state e-filing.

Tax guidance could be more consistent

Meanwhile, as previously noted, At Home’s Personal Tax Guide is rather inconsistent as to how much information is supplied. In some areas, the guidance is quite comprehensive, while in others, it is sparse. Casualty Loss is one area that isn’t especially well covered.

At Home isn’t alone in not providing sufficient guidance for Casualty Loss, an important issue and one that’s become more complex for the 2011 filing year due to all of the locations that have been declared Federal Disaster Areas. Lots of taxpayers could use more guidance on how to calculate their losses, and on how to carry back the loss to the 2010 tax year through an amended return if they wish to do so.

I’d also like to see improvements to the Audit Risk page. My test page showed a slight risk for an audit of my return and listed several possible general causes. However, it would have been nice to get a pointer to the entry or entries which triggered the software to flag a possible risk situation. 

Conclusion

Yet these complaints are relatively minor. The free online edition of At Home is completely free, without any additional costs for state software and filing, if you’re filing a Form 1040-EZ. Regardless of which edition you use, it’s good to know that human tax preparers at H&R can help you to complete a return if you hit a brick wall. At Home is less expensive than TurboTax, and it offers some very convenient features. Unless you’re filing your taxes directly online, though, you might be better off with a competing product if you need to file multiple state returns.

Pros

  • Free online version doesn’t restrict you to Form 1040EZ
  • Contains some very handy features, such as FAQs and tracking of refund/payment status

Cons

  • Tax guidance is inconsistent in depth of explanation
  • Generally speaking, H&R charges more than its rivals for state tax returns & state e-filing

 

 

 

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