FORT MYERS, Fla. (CONSUMER REPORTS) Are you among the intrepid tax filers who prepare their own returns online? Then you’re probably using tax preparation software from H&R Block, TaxAct, or TurboTax, the three leading do-it-yourself tax products.
To figure out which might be best for your purposes, we evaluated the web-based versions of all three. (You can do the same; you pay only when you file.) All of these products are aimed at people who itemize.
We considered how easy the systems were to use, including navigation and data entry. We looked at special features that the software programs offered, and we examined the depth of information each program provides, such as how it defines a dependent—a big question among taxpayers, according to the Internal Revenue Service. (The IRS also has its own tool to help you figure it out.)
The Basics
The prices for the programs vary. H&R Block Deluxe costs $34.99 to prepare and file a federal return and $36.99 per state return. TaxAct Plus costs $27 for a federal return and $33 per state return. TurboTax Deluxe runs $54.99 for a federal return and $39.99 per state return. (Some prices were lower earlier in the season.)
Each allows you to import your earned income (W-2 form) from thousands of employers. You can opt to have the tax-prep programs guide you as you answer their questions or you can skip sections that don’t apply. And all three offer “trackers” as you go along that constantly update the amount of tax you’ll pay or the refund you will receive.
Got a tax question? They all let you input queries or search their databases for answers. They all offer free, live advice from tax pros online or by phone.
Preparing and Filing by Smartphone
If you’re inclined to do your taxes by smartphone, the mobile versions of H&R Block and TurboTax let you prepare the “long form” (IRS Form 1040) as well as the “short forms” (1040-A and 1040-EZ) on their apps. TaxAct’s mobile version only handles short forms.
The apps all automatically transfer any data you input into their programs so that you can access the information from multiple devices, such as your phone, iPad, or laptop computer.
All three programs let you take a photo of your W-2 using your phone, and upload the information into your return. However, TurboTax wouldn’t give us the option to photograph W-2’s during our evaluation. When we typed in the employers’ tax IDs, TurboTax determined that it could import the W-2s directly, so photographs weren’t necessary.
CR’s View
All three tax-prep services do a good job of handling simple returns. They all guarantee that their math is accurate, so if there’s a mistake, they will refund you the penalties you are charged along with any interest. H&R Block and TurboTax have also simplified the language they use, making their explanations a tad easier to understand than those from TaxAct. We found all relatively easy to navigate.
But each tax-preparation program has features that put it one step ahead of the others:
Help. We liked that TurboTax had a “Talk to an expert” tab at the top right of every page. Clicking on that tab took us to three different ways to get answers to our questions: a search box, a list of questions and answers related to the topic at hand, and a link to reach an expert.
Access to IRS information. Using TaxAct, we found it easy to access (on the right side of your screen) a trove of tax information, including IRS forms. Although the explanations in TaxAct are somewhat more complex, we found it to be a good value: a less costly choice for consumers.
Using your smartphone. If using your smartphone for any portion of your tax preparation is important to you, H&R Block’s service may be the best choice. When photographing W-2s, it captured more earnings information than TaxAct, so we didn’t have to fill in blanks afterward. (We could not compare this feature in the TurboTax app because the program automatically imported the W-2s directly, so it didn’t offer the option to photograph them.)
We also found the “up” and “down” navigation and “back” and “next” buttons at the bottom of screens easier to use on H&R Block’s mobile system than TurboTax’s mainly left-right swipe navigation. With TaxAct’s app, you move to the next panel mainly by clicking on an answer to a question; because it’s a simple program, it doesn’t have many explanations or require much navigation.
Each also has limitations. While TaxAct Plus Online provides step-by-step guidance for investors, for example, H&R Block Deluxe and TurboTax Deluxe require that you upgrade for that feature. Another limitation: If you’re self-employed and need to fill out Schedule C, all three require that you upgrade.
Finally, the TaxAct app can only be used to prepare and file state returns for California. If you want to prepare and file another state’s return, you’ll have to revert to the web-based TaxAct product.