Tax filing season is upon us and investors need to start thinking about filing their returns. In addition to all the standard tax issues, investors must also consider the cost basis of their investments, short term versus long term capital gains, and much more. Great software can make this process easy, while poor software can make the process nearly impossible. NerdWallet investigated the online and software options offered by two of the largest online tax preparers. The conclusion? H&R Block is significantly less expensive for investors while TurboTax is a more pleasant user experience.
| Product | Format | Price | 1st State Return | Total Cost | Guidance for your Investments | Tracks & calculates cost basis | Average Customer Review | Designed For |
|---|---|---|---|---|---|---|---|---|
| Free | Online | 0.00 | $27.95 | 27.95 | 4.5 stars | Beginners | ||
| Basic | Online | 19.95 | $19.95 | 39.90 | 4.2 stars | Simple Tax Situations | ||
| Deluxe | Software | 44.95 | FREE | 44.95 | Yes | 4.0 stars | Homeowners or Basic Investors | |
| Deluxe | Online | 29.95 | $19.95 | 49.90 | Yes | 4.1 stars | Homeowners or Basic Investors | |
| Basic | Software | 19.95 | $39.95 | 59.90 | 4.0 stars | Simple Tax Situations | ||
| Premium | Software | 64.95 | FREE | 64.95 | Yes | Yes | 4.0 stars | Self-Employed/Rental Properties |
| Premium | Online | 49.95 | $19.95 | 69.90 | Yes | Yes | 3.9 stars | Self-Employed/Rental Properties |
| Premium & Business | Software | 79.95 | FREE | 79.95 | Yes | Yes | 2.8 stars | Owners of S or C corps or partnerships |
Best Product for Investors: Premium
Cost for 1 Federal & 1 State Return:
- Online: $69.90
- Software: $64.95 (can be downloaded)
Customer Comments on H&R Block:
- “Easy to use, maximizes refund, and price was GREAT!!!”
- “It was difficult to navigate and locate any errors.”
- “It was nice to import our information so I didn’t have to re-enter everything in.”
- “Took me all of about a couple of hours to fill out my tax return…in the past it usually took me around 5 hours…so much easier!”
- “The online support via the live chat was fantastic.”
- “It takes you through all the steps, checks for errors and shows you where the corrections should be made.”
- “Very impressed by the intuitive user interface.”
Interested in using H&R Block? Click here for 15% off!
| Product | Format | Price | 1st State Return | Total Cost | Guidance for your Investments | Tracks & calculates cost basis | Average Customer Review | Designed For |
|---|---|---|---|---|---|---|---|---|
| Free | Online | 0.00 | $27.99 | 27.99 | 5.0 stars | Beginners | ||
| Basic | Online | 19.99 | $36.99 | 56.98 | 4.5 stars | Simple Tax Situations | ||
| Deluxe | Software | 59.99 | FREE | 59.99 | 4.6 stars | Homeowners & others with deductions | ||
| Deluxe | Online | 29.99 | $36.99 | 66.98 | 4.8 stars | Homeowners & others with deductions | ||
| Basic | Software | 29.99 | $36.99 | 69.98 | 4.6 stars | Simple Tax Situations | ||
| Premier | Online | 49.99 | 36.99 | 86.98 | Yes | Yes | 4.8 stars | Investors & Rental Property Owners |
| Premier | Software | 89.99 | FREE | 89.99 | Yes | Yes | 4.4 stars | Investors & Rental Property Owners |
| Home & Business | Software | 99.99 | FREE | 99.99 | Yes | Yes | 4.4 stars | Self-Employed |
| Home & Business | Online | 74.99 | 36.99 | 111.98 | Yes | Yes | 4.8 stars | Self-Employed |
| Business | Software | 149.99 | 49.99 | 199.98 | Yes | Yes | 5.0 stars | Owners of S or C corps or partnerships |
Best Product for Investors: Premier
Cost for 1 Federal & 1 State Return:
- Online: $86.98
- Software: $89.99 (can be downloaded)
Customer Comments on TurboTax:
- “The wizard guides you through everything and it is nearly impossible to forget anything.”
- “I will always use this; have been using for over 10 years and the refunds have been quick and easy.”
- “It is lacking in some very critical areas for people like me who own several properties.”
- “Trying to print and save or just print difficult and confusing.”
- “Very easy because information from last year’s returns transferred automatically.”
- “Used a different lower cost program last year. Never again.”
- “We’ve had several “life-changes” and TT makes them all easy to navigate.”
- “Turbo Tax works great with 1 state but not 2 state”
- “This is the 6th year I’ve used it to do my taxes and I won’t use anything else.”
Conclusions:
- Investors should choose TurboTax’s Premier or H&R Block’s Premium Product
- H&R Block costs approximately $20 less than TurboTax for a single federal & state filing; additional states widen the gap further; H&R Block is also currently offering a 15% off discount on top of their already low prices
- TurboTax is more highly rated by its user than H&R Block; Users rate TurboTax Premier an average of 4.4 to 4.8 stars while H&R Block’s Premium is rated 3.9 to 4.0 stars out of 5.
Photo credit: Tax Form 1040 from Shutterstock
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