Pros: Simple to use, competitive cost, accurate
Cons: Missing charitable contribution tracker... at least in the $19.95 version
After six seasons of using the TurboTax on-line site, I was offered the opportunity of trying H & R Block TaxCut Online. I decided the best avenue would be to complete my taxes on both sites and compare my results. For those unfamiliar with either site, this is possible to do for free. Both will only request payment before printing and/or e-filing. For those interested in my results, I'll get to that in just a bit.
The Process and Ease of Use
The folks at H&R Block designed the site in a very well laid out manner. The layout is strikingly familiar to me based on my experience with TurboTax. Your information can be added and is retained in a number of distinct areas. Once you have entered your information the program makes it easy to return at any time to edit information from a simple checklist page separated under the following headings:
Each heading on your easy to view checklist page is further divided into their sub-categories. For instance Personal Information is separated into Filing Status, Taxpayer Information and Dependent Information. As you complete each area, the program checks the items as complete.
This checklist page is key when it becomes necessary to edit specific items. Not only has editing information been made easy but the H & R Block TaxCut Online software allows you to stop working at any point and save your latest information. Upon re-entering the program, you are given the option to return to your last completed page. Again, both TurboTax and this program perform these functions equally as well.
Similar to TurboTax, H & R Block TaxCut Online actually takes you through the 1040 (or 1040EZ) form line by line as if you were still working with pencil and paper. These programs offer you the distinct advantage of not worrying about collecting the proper forms. As a matter of fact, you are unaware which forms are created until final printing of your return. If you sold your primary residence, sold equities, had a theft or casualty loss or feel you may qualify for college tax credits, no problem, the program will cue you with questions and add the information to the necessary form. In the past, when this type of problem arose, I had to take the time for a trip to the local library and pay for photocopies of the necessary forms or more recently head to the IRS website and download forms.
Upon completing the filing process, you are offered two options, printing the forms for your own mailing or transmitting electronically. Electronic filing has gotten more simple over the years to a point where it is totally unnecessary to mail anything to the IRS. There is no longer a need to send W2's or even a signature page as was required several seasons ago. I will say this ease of e-filing is the standard and the same at TurboTax as well I assume with nearly any tax program.
I chose not to, but you also have the option to continue and file your state returns as well. Of course this is at an additional cost and unfortunately I am unable to comment on either it's performance or accuracy.
Page loading from the on-line site is extremely fast and computations are all instantaneous. The only exception to these speedy page loads occur when or if you leave the site and decide to re-enter the program.
Accuracy and Time
I assumed both sites would take my information and work the figures accurately. Of course you are responsible for inputting the proper and legitimate figures into the program. My question was, would one lead me to any additional deductions or work my figures to any advantage. While certainly not one that does this for a living, I consider myself fairly knowledgeable in tax preparation.
I have a list of equity sales and purchases, tax bills, income and interest statements, etc always prepared and sitting at my side before entering my taxes. This was even the case prior to e-filing when I used the old pencil and paper method. One sheet of paper with income and deductions broken down in outline form is what I suggest. This preparation should take no more than an hour or so once you have accumulated the proper statements. You can make this even easier by maintaining a folder and adding important documents, copies of canceled checks, etc throughout the year.
I began at TurboTax and entered my return information line by line. Both sites offer a running total of your refund or amount owed in clear view at all times as you step through the process. When I reached the end of my return at TurboTax, I moved to the H & R Block TaxCut Online site. With all the proper information and documents in front of me, I was able to step through both sites in just under an hour and a half each. I'll say the TurboTax site may have taken me just a bit longer but I attribute that to the fact I entered those first and was a bit better prepared when I moved to this site.
So the question still remained. Are these sites really accurate? Is one more accurate than the other? My answer is BOTH are accurate. I ended up with a refund at both sites... the exact same number!
Are There Any Differences?
I did find just a few differences between the two sites. The first thing I noticed was in the capital gain/loss section of Schedule D. I found that entering data of equity sales and purchases was a bit more cumbersome at the H & R Block TaxCut Online site. Not a serious flaw but for those with a number of figures to add, this may become an issue.
Secondly, I found entering my non-cash charitable contributions very simple at TurboTax. This year they added the software which calculates "fair value" for donations of household and clothing to their basic package. I'm not sure but I believe it may have been part of their premium package in past years. I found I was not deducting as much as I was allowed in previous years. In fairness to TurboTax, I cheated and used this figure when it came up on the H & R site.
I usually receive a rather large refund, so come January, I'm usually prepared to file my Federal return. This season my return was electronically deposited in my account 10 days following my filing. Based on my experience with both sites, if you file on or before Thursday and have your return electronically filed and deposited, you will see your return on the following Friday. I can't state this as fact of IRS procedure, but I believe every return I have received over the past seven years has always showed up in my account on Friday.
H&R Block does have a help menu connected to the site to answer some of your specific questions but from plodding through it, I found the questions very basic and of little help. Help is available by either phone or email. I did not use the service and did not want to take their valuable time simply for purposes of this review so I cannot personally comment on their helpfulness. From the help menu, you can attempt either choice. The site claims an email response will be returned in one minute and a return phone call in an estimated 14 minutes when I clicked the link.
One consideration which taxpayers will want to consider is that of cost. When I first filed with TurboTax online in 2000, the cost was $9.99 with e-filing included. Over the past six years cost had risen to $29.95 plus tax for a grand total of $31.75 last season. I was of course pleasantly surprised to see that has been reduced to $19.95 plus tax this season... oddly, the same as you will find the H & R Block TaxCut Online version.
This price is the basic price which includes complete federal tax computations and e-filing. I believe the price increases after March 31st at TurboTax and may have already increased at H & R Block to $29.95. Next year... file early.
I entered into the site with the belief I could end up offering a clear choice for those interested in on-line tax preparation. As you can tell, through nearly the entire review I ended up using phrases such as Just as, Similarly, or Equally. I suppose TurboTax has a slight edge in both their ease of entering my Schedule D transactions as well as the excellent charitable contribution software for non-cash contributions. My reviews pertain specifically to the standard $19.95 versions of both TurboTax and H & R Block TaxCut Online and at this point, I recommend them both equally with a slight bias toward the TurboTax software. No matter which choice you end up selecting, either way it should be clear that its time to throw away the pencil and paper and begin e-filing.
I received this product from Fleishmann-Hillard in exchange for my honest review posted on Epinions.com