H&R Block Tax Software Review: An Overview of the Benefits and Costs

FT Contributor  | 

The process of filing tax returns can seem daunting. Filing your taxes without a good idea of what you’re doing may lead to many common errors. Simple errors such as calculation mistakes or an incorrect routing number may keep you from getting a refund or expose you to potential penalties.

Every income earner has to file taxes, so this is not a task that you can escape. Some taxpayers opt for an accountant, but going this route can be expensive. Tax software is typically a cheaper alternative to a CPA.

These programs, which often offer different pricing options depending on the services you need, help you streamline the process of collecting the necessary tax information and documents and filing your tax returns without an accountant.

One of the more popular tax software options is H&R Block Tax Software, which offers tax prep tools for individuals, businesses, and self-employed professionals.

This review of H&R Block Tax Software will help you decide if it is the right option for you.

Quick Facts on H&R Block Tax Software

Here is an overview of what you can expect from H&R Block Tax Software.

  • H&R Block Tax Software has a free option that allows most individual taxpayers to file a simple return without having to upgrade. The paid Self-Employment tier offers additional services, such as itemized deductions and self-employment tax calculations, for small business owners and freelancers.
  • H&R Block provides good value because of its feature-rich free tier and customer support on all plans. In general, its features and support are competitive with other tax software options.
  • The most significant advantages of this software are its robust menu of features and the ability to choose from different pricing tiers depending on your needs.
  • The main disadvantage of H&R Block’s service is the price of the Online Assist service. Some competitor features, such as TurboTax Live, provide cheaper one-on-one professional support.

Features of H&R Block

H&R Block Tax Software has a full menu of features to help you file your taxes.

  • H&R Block has an attractive user interface. It is uncluttered, intuitive, and easy to navigate. This ease-of-use makes it an ideal choice for beginners who are looking for a straightforward way to file online.
  • H&R Block has four available plans for individuals and small business owners: Free, Deluxe, Premium, and Self-Employed.
  • The Self-Employed Online plan is the best for business owners as well as freelancers. It offers all the necessary tools for income reporting and deductions. This tier even has a specialized entry process for gig-economy jobs, which is beneficial for people who work for companies like Uber and Lyft.
  • With H&R Block, it is easy to fill in income details for your small business using common forms such as 1099s. You can even take a photo of the 1099 and import it to the H&R software.
  • H&R Block walks users through all of their deduction options, helping them maximize all deductions for both business and personal income. It can even handle more-complex deductions such as asset and vehicle depreciation.
  • The software will automatically categorize all of your business expenses and place them on the IRS Schedule C, which you need to file with your 1040.
  • Information is easy to import. H&R Block allows users to import various forms, including W-2, 1099, 1095-A, 1098, 1098-E, 1098-T, 1098-B, 1099-DIV, 1099-INT, and 1099-R. If you do not have electronic or scanned versions of these documents, it is also possible to take pictures of them and import them directly.
  • Tax documents include sensitive information, such as your earnings details and Social Security number. H&R Block services all use a secure connection, which ensures all data gets encrypted. The company uses bank-level encryption when submitting your documents to the IRS.
  • There are different options for accessing the service. H&R Block has mobile apps for both Android and iOS devices, allowing you to fill your tax returns on your mobile phone. There is also a desktop application for users who would prefer to prepare their taxes offline.
  • One of the advantages of this tax software is the level of support available to users. During the preparation process, any terminology you may not understand has a “learn more” link, which provides you with more information on the topic. Also, the help menu updates itself automatically to match where you are in the filing process. Finally, there is also an Online Assist portal, offering chat, phone, and video support. You have to pay extra for video support from a CPA.

Comparing the Free, Deluxe, and Premium Versions

Perhaps the best selling-point of H&R Block Tax Software is the free version, which offers more value than other alternatives. The prices for the paid versions are competitive with other options on the market. However, you need to understand the pricing to ensure that you pay for the services you need without paying for features that you will not use.

Free Tier

The Free Tier costs $0 for both federal and state tax returns.

  • With this free version, you can file your Form 1040 and take the earned income tax credit, credit for the disabled or elderly dependents, and the child tax credit.
  • You can video chat with a tax pro for advice, help, and a review of your returns. This service costs $49.99 for federal returns and $39.99 for state returns.
  • The free version also allows you to file Schedules 1, 2, and 3 to report your business income, alternative minimum tax, some retirement contributions, credit for dependent care expenses, and other standard deductions.

Deluxe Tier

The Deluxe Tier is the first paid option for this software. It includes all Free Tier services plus some extras.

  • Deluxe service costs $49.99 for federal returns. If you want Online Assist services, you need to pay $99.99. It costs $44.99 for state tax returns and $49.99 more for Online Assist.
  • With this tier, you can itemize your deductions and claim tax credits. You will, however, need to upgrade if you’re filing a Schedule C or if you have assets, such as commercial or rental properties.

Premium Tier

The Premium Tier includes all Deluxe services plus a few extras.

  • This tier costs $69.99 for federal returns and $44.99 for state taxes.
  • Online Assist costs $139.99 extra for federal taxes and $49.99 for state taxes.
  • This tier is for people with specific assets, such as real estate. For example, landlords, investors, and some small businesses can file Schedule D, E, or K-1 forms with Premium level services.

Self-Employed Tier

The Self-Employed Tier includes services for freelancers and some types of small business owners.

  • Federal taxes at this level are $104.99, while state taxes are $44.99. Online Assist is $169.99 extra for federal taxes and $49.99 for state taxes
  • This tier has income reporting features for small business owners, independent contractors, gig economy workers (including Uber and Lyft drivers), and freelancers.

H&R Block Software Pros and Cons

Taxpayers should weigh the pros and cons of H&R Block Tax Software when deciding if it is the right option for their specific tax prep needs.

Pros

Exceptional customer service, with paid Online Assist options available if you decide you need more support.  

  • The free edition provides more value than competitors. It allows you to handle more tax situations and file more forms than other free services.
  • Bank-level security when sending forms to the IRS.
  • Very transparent about pricing, so you know how much it will cost before you start filing.
  • Discounts and promotions. With so many other online tax filing services available, H&R Block is known to occasionally run discounts and promotions on their services. Currently, they’re running a 25% Off discount on Federal filings. Be sure to check H&RBlock.com frequently, as discounts and promotions may vary.

Cons

  • Accountant assistance is pricier than competitors. If you need this level of support, it could add to the overall cost of the software.  
  • Offers many different tax prep options and multiple platforms. These options can be an advantage for some, but it can also feel a little intimidating for beginners.
  • Because there are various pricing tiers, you could end up paying for features that you will never use.

How Does H&R Block Compare to Other Platforms?

H&R Block gets compared to Intuit TurboTax and TaxSlayer. These are the most popular tax filing services. There are a few interesting points of comparison between the three:

  • Overall, H&R Block’s paid services are cheaper than TurboTax’s but more expensive than TaxSlayer. For example, it costs $99.99 to file your federal return on H&R Block’s Deluxe plan, but $120 on TurboTax. Similarly, it costs $49.99 to file a state return with H&R Block but $55 with TurboTax. TaxSlayer is much cheaper, with Premium Tier services costing $37 for federal taxes and $39 for state taxes.
  • While filing costs are cheaper with H&R Block, getting live assistance from a CPA is less expensive on TurboTax. It costs between $60 and $90 to get video help via TurboTax, while Online Assist on H&R Block costs between $39.99 and $169.99. TaxSlayer’s live support is not competitive with the other two options.
  • Despite the live help costs, H&R Block has a more extensive customer support system that includes free “knowledge base” articles and chat and email support. H&R Block also has brick-and-mortar offices, which Intuit does not have. TaxSlayer has a limited knowledge base and no physical locations, but does offer phone, chat, and email support.
  • TurboTax’s user interface is more intuitive than H&R Block. That said, H&R Block’s UI isn’t particularly challenging to use, and some users may prefer its minimalist design. TaxSlayer has a very simple, intuitive design as well, but it lacks some of the features that H&R Block provides.
  • H&R Block occupies the middle ground between versatility and affordability. Even though its paid options are pricey, its free tier is still more feature-rich than TurboTax and TaxSlayer.

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