Everyone claims to have the best tax software for small businesses these days, with the top two competitors being TurboTax vs H&R Block.
While some opt for a tax professional, others use an online tax service, like as TurboTax or H&R Block. These enable you to conveniently file taxes on your own.
TurboTax and H&R Block are two of the most widely used online tax services.
But, how are you supposed to know which is best for you? Each has its own unique advantages (as well as a few disadvantages). But, before we get into the details, let’s begin with an overview of both. This will give you a general idea of how each one works.
TurboTax is produced by Intuit, which is the same maker of the Quickbooks software, which many organizations rely on to keep track of their accounting tasks. It’s been around for over 20 years, and is hailed for its simple and easy-to-follow guidance.
Find out more about TurboTax
Turbo Tax also has a free filing edition that enables users to file their federal return; however, users can file one state return free.
TurboTax also offers three other plans; however, they are paid plans, and they range in price depending on the features they include as well as if you are filing federal or state taxes.
The Filing Options for TurboTax
- The Free Edition: allows for free federal tax filing as well as one free state tax filing. It includes a form 1040 for simple tax filing and basic features, such as deductions for independents, explanations of refunds, checks for errors, and imports.
- The Deluxe Edition: offers federal tax filing for a fee of $39.99 and state filing for $39.99. It includes all the basic features as well as a calculator for charitable donations. This edition is perhaps more beneficial for those who own a home and are interested in making the most of their deductions.
- The Premier Edition: offers federal tax filing for $59.99 and state filing for $39.99. If you own rental property, or you are an investor, this edition is best suited for you. It provides all the features included in the Deluxe edition as well as detailed stock reporting. It is also centered around rental property and investment income and deductions for refinancing.
- The Self-Employed Edition: offers federal tax filing for $89.99 and state tax filing for $39.99. It provides all the features included the other editions as well as options for making the most of your business deductions. This edition is best suited for small business owners, freelancers, self-employed, independent contractors, and consultants, and it also includes employment tax experts for additional help.
H&R Block Overview
H&Block has been around for at least 20 years longer than TurboTax, and is too hailed for its user-friendly setup. This set up includes a combination of easy-to-use tools and helpful guidance. These are suitable for both novice as well as seasoned preparers alike.
Like TurboTax, H&R Block also offers a free version that enables users to file their federal tax returns for free. On the condition that they are basic returns. However, unlike TurboTax, it also enables users to file all state returns free of charge. The free option also allows you to file more forms and schedules, including:
- The schedule EIC for earned income tax credit
- The 1040 form
- The 8812 for the additional Child Tax Credit, form 1099 (DIV, INT, B, and R), 1095 (A and B), and 1098 (E and T).
- However, filing all other forms will require you to upgrade to a paid plan.
Find out more about H&R Block
H&R Block also has onsite locations with tax professionals available to assist you with your filing should you choose not to file online. However, there is a fee to file your returns in person.
Filing Options for H&R Block
- The Free Edition: offers free federal tax filing and free state tax filing. It includes form 1040 as well as some tax credits for children, and more. This version is the best option for those with basic tax returns or those who are filing for the first time.
- The Deluxe Edition: offers federal tax filing for $29.99 and state filing for $36.99. It includes all the basic features in addition to forms that enable you to itemize, and it is the best for those who own their own home because it enables you to make the most of your deductions.
- The Premium Edition: offers federal tax filing for $49.99 and state filing for $36.99. It includes all the Deluxe features as well as Schedules E, D, C-EZ, K-1, and more, which makes it a good option for rental property owners and investors.
- The Self-Employed Edition: offers federal tax filing for $79.99 and state filing for $36.99. It includes both the Deluxe edition and the Premium edition features as well as Schedule C, which makes it a great option for owners of small businesses.
- The Tax Pro Review Edition: offers federal tax filing for $119.99 and state filing for $36.99. It includes all the features of the other editions as well as expert tax help for up to a year from the date that you file your taxes.
TurboTax vs H&R Block Overview
When deciding whose best in the TurboTax vs H&R Block debate, there are a few things you should consider. TurboTax comes with a feature to check for errors, equipped with more than 1,000+ diagnostics tools. Meanwhile, H&R Block provides free in-person tax checking, just to make sure you file everything correctly before submission.
Both huge advantages. So, in short, they’re both packed with features. Here’s where they differ: user-friendless, overall tax assistance and pricing.
As stated earlier, both TurboTax and H&R Block are hailed for their user-friendly design.
However, TurboTax is a bit easier to use than H&R Block. For instance, some people find H&R Block’s explanations and questions a bit difficult to follow. Whereas, many TurboTax users report that the questions are clear and easy to understand. TurboTax also includes motivational phrases to help build your confidence in preparing your own taxes, which many users, especially first-time users, find helpful.
When it comes to ease of uploading your documents, both TurboTax and H&R Block win.
They also both enable users to import their returns from earlier years. The only stipulation being that they are in PDF form, regardless of the tax service you used. Both services also allow users to photograph their W-2 form and then upload it.
Read our TurboTax Self-Employed Review
H&R Block offers limited customer support. You have to rely on a knowledge database and live chat to get answers to your questions.
Once you’ve completed filing your federal return, both services also enable users to easily transfer their data to your state return, so you don’t have to retype it.
Child Tax Credits
One major difference between TurboTax and H&R Block is that TurboTax only includes some child tax credits while H&R Block includes the majority.
H&R Block also has an onsite location for tax filing help whereas TurboTax does not. However, TurboTax does have tax experts available, such as EA’s or CPA’s, to assist you with filing your taxes. It will cost you extra based on the plan you choose.
Provided you have less than $100,000 in taxable income, you can use the free filing option for both TurboTax and H&R Block. The only other conditions being:
- That you are filing a simple return with no dependents
- Have no rental properties
- No business expenses
- You have no investment income besides simple dividends or interest.Users can also file the Additional Child Tax Credit as well as the EIC. H&R Block also includes Schedules 1 through 6 with its free plan; however, TurboTax does not. However, if you wish to itemize deductions, neither service allows for that as part of their free plan; therefore, you will have to invest in one of their paid plans.
TurboTax and H&R Block are two of the most costly online tax filing options available. That said, they are also the most comprehensive services, which makes them good for a wide range of tax filings. In general, H&R Block costs less.
Both filing services offer free editions, which are just perfect as long as your return is simple. However, H&R Block does include more schedules and forms with its free plan, which may enable more users to file for free. Otherwise, you will have to invest in a paid plan.
H&R Block also allows users to complete more than one state filing. Whereas TurboTax only allows users to complete just one state filing, which may also make H&R Block’s free plan a bit more appealing than TurboTax’s.
When it comes to TurboTax vs H&R Block’s Deluxe edition, which most filers will most likely require, TurboTax’s option allows users to file Schedules C-EZ and C, provided you only have business income to report. It also enables users to file Schedule SE, which is self-employment taxes.
On the other hand, H&R Block’s Deluxe edition does not include schedules C and C-EZ.
The premium edition does, however, which means you will have to upgrade to their Premium edition for about 10 bucks more. Those filing self-employment taxes using H&R Block will also need to upgrade to the Self-Employed plan, which costs nearly $80 for federal filing.
More Tips for Filing Your Taxes
- Tax time provides the perfect opportunity to assess your finances as well as your financial goals. This is where a financial advisor can assist you with. Therefore, you may consider interviewing at least three advisors in your area to help find the right one for you. This will come in handy during the tax season and beyond.
- Once you find a financial advisor that you are compatible with, he or she will then ask you a few questions regarding your financial situation as well as your financial goals. They will then go about working with you to implement a plan for success. They can also recommend an online filing service or a tax professional for filing your returns.
- These are just a few of the online options available for filing your own state and federal taxes. However, there are also other useful services, some also more budget-friendly. It is important that you shop around to find the best service for you.
- If you are interested in more free online tax preparation and filing services, you can also visit the IRS website. The site includes a list of free online tax services that filers can access directly from their site. In the event you need to file an extension, they also provide a list of Free File Software services.
TurboTax vs H&R Block Conclusion
When it comes down to TurboTax vs H&R Block, it basically depends on your individual tax situation.
For the most part, if your return is simple and straightforward, then you could use either the TurboTax or the H&R Block free plan to file; however, H&R Block includes more schedules and forms with its free plan, which may be a better option for some.
On the other hand, if you earn income from freelance work, contract work, or any other employment where payroll taxes are not taken out, then you may have to upgrade to a more expensive plan in order to file certain forms through H&R Block and TurboTax.
Likewise, if you are a homeowner looking to maximize your deductions, you are a rental property owner, or you have investment income, you will also require additional forms and schedules, which means you, too, will have to upgrade to either TurboTax’s or H&R Block’s paid plans.
Lastly, if having the security of a tax professional standing by is important to you, then H&R Block may be the best option for you.
As stated earlier, H&R Block has an advantage over TurboTax in that it has onsite locations you can visit to get filing help if you need it. However, you will have to pay a fee.
Otherwise, go over your finances, consider the schedules and forms you need to file, as well as the price you are willing to pay to use online filing, and then go from there.