When it comes time to file and pay your taxes, there are a lot of tasks to complete. Whether you're figuring out your tax bracket or deciding whether you should itemize or claim the standard deduction, there's technical knowledge required at every step.
The good news is, the best tax software programs streamline the tax filing process by asking you a few simple questions and even auto-filling your forms for you. But there are lots of these programs out there, and picking which one to use is a challenge.
This review of TaxAct vs. TurboTax vs. H&R Block will help you decide which tax prep software is best for your situation.
TaxAct vs. TurboTax vs. H&R Block
TurboTax, H&R Block, and TaxAct all offer a user-friendly interface, though TurboTax is well known for being the most intuitive, and TaxAct generally has the fewest bells and whistles. Each tax preparation software asks you basic questions about your life and finances to identify opportunities to save on your taxes.
They all offer different tax filing software options depending on the complexity of your tax situation, though TurboTax's prices for paid services are higher than the other two. Free-file is available with each company as well, though H&R Block allows you to file more forms with its free option than its competitors.
Each company stands behind its programs with features such as satisfaction guarantees, but TaxAct is the only company that goes beyond refunding your program price if another software option helps you score a larger refund. TaxAct will refund up to $100,000 in lost opportunity to save on your taxes.
Because the programs are similar in many ways yet have important differences, you'll need to consider which features are most important to you to decide which program is the best fit.
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Full comparison of TaxAct, TurboTax, and H&R Block
If you're working on how to manage your money and paying the lowest price is your focus, consider H&R Block or TaxAct. Both programs are less expensive than TurboTax.
H&R Block is an especially good deal if you have a simple return but want to claim the student loan interest deduction, as it is the only program that enables you to e-file for free while scoring these tax savings.
If you have multiple state tax returns to file, H&R Block could also save you money as its state returns are a few dollars less than either TurboTax or TaxAct.
Ease of use
All three programs are easy to use, as they all allow you to take pictures of W-2s, and each helps you identify deductions and credits by asking you questions about your life. But TurboTax is especially well-known for providing the most intuitive and user-friendly interface for tax filers.
Available customer support
TurboTax, H&R Block, and TaxAct all provide chat support and assistance via phone. You can even share your screen to get help. TaxAct provides this option for free to Premier+ program users. TurboTax also offers a TurboTax Live add-on for an additional fee if you'd prefer to have a tax expert review your state and federal returns before you submit them.
H&R Block also has in-person tax centers where you can get assistance. However, not all H&R Block tax experts are CPAs or enrolled agents. H&R Block does indicate that it provides ample training to tax professionals.
All three programs receive mixed customer reviews, though TurboTax received the best ratings.
Some common complaints about TaxAct include software connection issues and price increases, yet many consumers had positive notes about its ease of use. TurboTax users frequently compliment the simplicity of using the software, but a few complain about login difficulties or are upset that free e-filing is so limited. H&R Block users reported that they were able to file more forms with cheaper programs using this software but that TurboTax offered better customer service.
Pros and cons
Here are some of the key advantages and disadvantages of each of the three software programs.
What is the best online tax service to use?
The best online tax service depends on the specifics of your situation. If you want to file for the lowest cost and need to use a paid filing program to itemize deductions or claim investment income, TaxAct will likely cost you less.
H&R Block can be the most affordable if you're filing multiple state returns, and it also allows you to claim the student loan interest deduction with free e-file — other programs don't. TurboTax costs you more, but is widely viewed as the easiest of all programs to use.
Can TaxAct import TurboTax?
You can only import a prior year's tax returns from competitor products if you have a PDF copy of the return.
Why is my refund different?
Each tax program uses its own proprietary software to scan for deductions and credits. They also have their own approaches to asking you questions and soliciting answers.
Because of this, you may find your tax refund differs from one program to the next. Each program has a refund guarantee, though, and will refund what you paid for the program if another method provides a larger refund. TaxAct also refunds you up to $100,000 if your refund was smaller than it could have been.
How much does it cost to file taxes with H&R Block?
The cost of filing taxes with H&R Block varies by program. It offers a free tax program if you have a simple income tax return. If you have a more complex tax situation, you'll pay between $28 and $68, with self-employed taxpayers paying the most. H&R Block also charges $37 per state return filed.
Can tax professionals use TurboTax?
No, TurboTax is licensed for personal use only.
Is it better to do taxes online or in person?
Whether it’s better to do taxes online or in person depends on your preferences. When you do taxes in person, you usually have to pay more for a tax preparer to complete your tax returns for you. But you get more assistance and have someone there to answer specific questions. This can be handy if your personal finance situation is more complex. For instance, if you're a homeowner with rental property or self-employment income, you may want to go this route.
When you do your own taxes online, you're ultimately filling out the tax forms yourself, though the programs ask questions and autofill some information to make it easier. They can also simplify certain things, like determining your tax bracket or figuring out whether it makes sense to claim the standard deduction or itemize. These programs can be more cost-effective and can help you avoid any tax mistakes.
You also have the option to pay for live help with TaxAct, TurboTax, and H&R Block. Although this comes at an added cost, it is often less than getting in-person help while still affording you the chance to get advice. So this can give you the best of both worlds during tax season.
Bottom line: TaxAct vs. TurboTax vs. H&R Block
Ultimately, if you're wondering how to file taxes, you can't go wrong with TaxAct, TurboTax, or H&R Block — especially given that each filing option provides guarantees. To determine the best tax software for you, see which one costs the least or provides the user interface you prefer, and you'll be well on your way to filing your returns efficiently and effectively.