TurboTax vs. TaxACT vs. H&R Block at Home: 2012 Lightning Review

AppId is over the quota
AppId is over the quota

According to a MyMoneyBlog.com reader poll taken last year, 52% used TurboTax, 18% used TaxACT, and 14% used H&R Block at Home to prepare their tax returns, which agreed with the most popular software overall in the US. The remaining 16% either used an accountant (10%), filed on paper (4%), or used another software (2%).

Last year, I used each of “The Big 3? to do my taxes in order to compare and contract in detail the three software programs. (As an example, my TurboTax 2011 review talks about comma-insertion as a feature…) I plan to do the same thing this year, but to help you early-birds, here’s the highly-condensed version of my reviews:

Accuracy and Maximum Refund Guarantees
In terms of accuracy and interview style, I think all three are comparable if not nearly identical. In fact, I’m certain they all dissect each other’s products annually to ensure this. As such, all three offer a “Maximum Refund Guarantee” as well as a “Accuracy Guarantee” that states that they will pay any penalty and interest assessed by the IRS or your state due to calculation errors on their part (though H&R Block limits this to $10,000).

In my opinion, the remaining major differentiating factors are price, time-saving features, and audit support. Now, there are various discounts and sales that pop up, but here I’m just comparing regular sticker prices.

TurboTax Online

The most popular and most polished-looking user interface.Federal Deluxe regular price is $29.99. State return price is $36.99.Best import support from payroll providers and financial institutions for automatic import of W-2 and 1099 forms.Moderate audit support (you get help, but no in-person representation)

Bottom line: The time-saving choice if you have a lot of brokerage and/or bank 1099s to electronically import, or a lot of details to import from last year’s return and you used them last year. For those like me that would pay extra to avoid all that tax lot data entry.

TaxACT Online

Cheapest overall with Federal Deluxe regular price at $9.99. Many can get by with Federal Free version. Cheapest state return at $8.00.Again, just as accurate as the others.Limited import support (worst of the three).Limited audit support (worst of the three).

Bottom line: The value choice if you just want reliable DIY tax return software and don’t need any extras.

H&R Block at Home Online

Federal Deluxe regular price is $29.95. State return price is $34.95.Moderate import support for 1099s and W-2 (not as broad at TurboTax, better than TaxACT)Best free audit support, as it includes an H&R Block Enrolled Agent actually attending your audit in-person. Neither TurboTax and TaxAct not offer representation. However, you must think about whether you would hire your own representative in the actual event of an IRS audit (probably depends on severity).

Bottom line: The sleep-well-at-night choice if you want the assurance that a federally-authorized enrolled agent will guide you for free through a potential albeit unlikely audit.

Find more in Reviews, Taxes | 1/10/13, 8:51pm | Trackback

Free TurboTax Deluxe Online with State Farm Bank Account (Easy to open, No monthly fees)

AppId is over the quota
AppId is over the quota

State Farm is again offering their bank customers TurboTax tax-prep software at a great discount. TurboTax Deluxe Online is free, Premier is $20, Home & Business is $30, and State is also included free with e-File for all versions. You can see the offer mentioned here, but with very limited details. Keep reading for how it only takes a one-time $25 deposit and a week’s time for anyone to open an eligible checking account and get this valuable perk.

According to my blog archives, from 2006-2009 State Farm offered TurboTax Deluxe for free to all customers including insurance policyholders. Starting in 2010 or 2011, they started offering it only to bank customers. However, it has been relative easy to maintain a checking account there with a small balance of $100 with no monthly fees. Even at 5% interest, that’s just $5 a year in exchange for what is worth over $40. Plus, it looks like now you only need to commit $25.

My experiment this year was to test if you could simply open up a new account and immediately get free access to TurboTax. I thought that perhaps you had to be a deposit customer for a certain period or there was a cut-off date. Well, it appears that from application to free access takes about a week. Here are my findings.

First, I opened a new account online. Make sure to apply for “Free Checking” and not “Interest Checking” which has higher minimum balance requirements. I was able to do everything online, nothing to mail in. They ask for driver’s license number for verification. New customers must fund their checking account with at least $25, and the easiest methods are to use an online bank transfer (routing and account numbers) or fund with a credit card. The site warns you that it may be classified as a cash advance, and in the spirit of discovery I tried using a Citi credit card and it was indeed marked a cash advance (I paid it off immediately so the interest charges on $25 should be less than $2).

Next, get an account number and gain online access.. You’ll need to wait for approval and a snail mail letter with your new account number. There may be another way to get this number faster (calling in?) but I just waited a few days. You’ll need your account number to link your bank account to your online profile. After providing it, I had to wait about 24 hours for the account to show up online.

Success! Once your bank account shows up in your online profile, the website will recognize you as a State Farm Bank customer and you’ll be given access to free TurboTax. Simply log into your account and look for the TurboTax logo under the right sidebar. You should see the following new prices (click to see full screenshot):

To see the State filing prices, click on the blue “State additional” link. You should see this popup showing that it’s also free. Retail for State is $36.99.

Note: TurboTax only charges you when you finally file your return. To guarantee that you’ll get your free software, you’ll have to access TurboTax initially every single time via StateFarm.com and NOT TurboTax.com. I simply changed my browser bookmark to go to StateFarm.com. You’ll still eventually do your taxes on a secure site at TurboTax.com, but you need the redirect from State Farm’s site.

To receive your special TurboTax offer, you must access and complete your return through the links on statefarm.com. If you access your return directly from Intuit’s site, payment will be required.

Find more in Banking, Deals & Offers, Taxes | 1/3/13, 6:31pm | Trackback