TurboTax vs. HR Block vs. TaxAct

It’s many people’s least favorite time of year: tax season.

Between frantically searching for your tax forms, organizing your receipts, figuring out how much it’ll cost you to file and trying to remember the most recent updates to the tax code, tax season can be stressful … to say the least.

Thankfully, some smart software companies have made the process way easier — and, in some cases, even free.

Even the tax pros themselves are getting on board.

“I actually informally started my own tax practice using TurboTax to prepare people’s returns from my kitchen table,” said Ben Rugg, CPA.

So you can rest assured your taxes are in good hands with online tax filing services — and save yourself a boatload of money and stress.

Best Tax Software 2021: At a Glance

The three best online tax programs with paid plans are undoubtedly TurboTax, H&R Block and TaxAct. Here’s a quick look at how they stack up.

Note: The prices below are accurate as of Jan. 27, 2021 but may fluctuate throughout tax season.

Each of these three tax prep services offers a similar suite of options that are split among their free and paid tiers. The details and prices vary among them, so take a look at the features that are important to you to see which product is the right fit.

Tax Software Features, Compared

Free Editions

Each tax preparation service includes a free option for basic filers. What each covers varies, so which is best for you depends on how complex your tax situation is.

• H&R Block: H&R Block’s most basic online version covers earners whose wages come entirely from W-2 income, and also includes deductions for student loan interest and child tax credits.

• TurboTax: The TurboTax Free Edition covers W-2 income, the Earned Income Tax Credit (EIC) and child tax credits.

• TaxAct: This tier covers W-2 income; and tax breaks for dependent deductions, Earned Income Tax Credit (EITC) and other child tax credits, student loans and education expenses for current students, and retirement income.

Support for Complicated Returns

Each service offers almost identical paid tiers for more complicated tax returns: a “Deluxe” and a “Premier” or “Premium” tier.

These tiers help you prepare your taxes when you have additional deductions and credits to claim, or you have income from anywhere other than an employer.

• H&R Block: Deluxe covers additional deductions related to things like home ownership, charitable donations and Health Savings Accounts (HSAs). You’ll need Premium to cover income from freelancing, contract work, investments or real estate.

• TurboTax: Deluxe covers mortgage and property tax deductions, charitable donations, student loan interest, education expenses and 1099-MISC income from freelancing or contract work. Premier covers investment and rental property income, and refinancing deductions.

• TaxAct: TaxAct Deluxe is more comprehensive than the others; it covers itemized deductions, mortgage interest, real estate taxes, student loan interest, Health Savings Accounts (HSAs) and adoption credits. Premier adds options for investors, people earning royalties or K-1 income, rental property owners and foreign bank account holders.

Need money now? H&R Block and TurboTax both offer a tax refund advance, while TaxAct does not. An advance from H&R Block will cost you a lot more than one from TurboTax.

• H&R Block: The Emerald Advance line of advance credit to put up to $1,000 of your tax refund in your pocket before you file through a Mastercard debit card with a $45 annual fee and 36% interest rate.

• TurboTax: The service offers an advance up to $3,000 (typically around 50%) of your expected federal tax refund with 0% interest and $0 loan fees. Eligible customers get access to funds within a few hours via Visa debit card.

• TaxAct: TaxAct doesn’t offer a tax refund advance.

Pay with Your Refund

All three services let you use your tax refund to pay for product and filing fees, so you never see an out-of-pocket cost for your tax preparation. The competition is in the fees.

• TaxAct: $17.99 if you’re receiving your refund by direct deposit or $9.99 if you’re receiving it on a PayPower reloadable debit card.

Guarantees

The companies offer different levels of peace of mind for using their products.

• H&R Block: If there’s an error in your tax return, H&R Block will reimburse you for up to $6,000 in additional taxes owed due to its mistake.
• TurboTax: If you tally up a larger refund (or similar tax liability) with another tax preparation service, TurboTax will refund your fee (or pay you $30 if you used the Free edition).
• TaxAct: If there’s an error on your tax return, TaxAct will reimburse you for up to $100,000 in additional taxes owed dues to its mistake, plus refund your TaxAct fees. If you’re not totally satisfied with TaxAct for any reason, you can discontinue using it before completing your return and paying the fee.

Fees

To prepare and file your taxes online with each service, you’ll pay a product fee, filing fees for state returns, and — depending on the company — fees for live tax professional assistance.

Here’s how they compare.

Alternatively, you can download tax preparation software from each company, so you can save your tax information on your own computer. Software products are tiered similar to online tiers and include a one-time download fee and filing fees.

H&R Block vs. TurboTax vs. TaxAct: Which Is Best for You?

Any of these popular, tested tax preparation services are a good fit for you if you want to DIY your tax returns this year and file online — with added assurance from software or tax pros that you’re doing everything right.

Here are a few standout differences among H&R Block, TurboTax and TaxAct that might help you pick the best product for your situation.

H&R Block is best for you if…

• You want access to in-person tax pros. H&R Block is the only of these three services that runs brick-and-mortar offices where you can work with tax pros face-to-face.

• You’re concerned about a complicated audit. Both TurboTax and H&R Block provide audit assistance, but H&R Block’s service offers a better user experience and is available in-person — which could be comforting in a stressful situation.

• You own a small business. All three services provide ample support for self-employed filers, but H&R Block has the most robust suite of services for year-round tax support.

You can always file your federal taxes for free-free, if you’re eligible, through the IRS Free File portal. This service is available to filers who earned $72,000 or less (in 2020), and the page also links to free fillable forms for earners at all levels.

The IRS doesn’t directly provide this service, but it partners with 13 tax preparation companies — like H&R Block and Jackson Hewitt — to facilitate your process.

2. United Way MyFreeTaxes

If you made less than $66,000 in 2019*, take advantage of United Way’s MyFreeTaxes program to file federal and state taxes online for free.

The site notes that 100 million Americans qualify for this free filing option, powered by H&R Block.

*Information for tax year 2020 wasn’t available as of this writing, but we suspect it’ll continue to be in line with the IRS Free File requirement of $72,000.

3. TaxSlayer

If a 1040EZ is all you need to file, TaxSlayer will help you do it online for free. The Simply Free edition offers a deduction finder, and you can add your state returns at no charge.

Active duty military members can file a federal return for free, regardless of your tax situation.

4. EFile

EFile offers free basic federal filing and advises this option if you’re single or married and filing jointly with no dependents. You can get 50% off the state filing fee with the promo code “50eFile.com.”

5. Volunteer Income Tax Assistance Program (VITA)

Get help with basic tax prep from an IRS volunteer through the Volunteer Tax Assistance Program (VITA) and Tax Counseling for the Elderly (TCE) programs. VITA assistance is available to:

• People who “generally make $57,000 or less” (for tax year 2020).
• People with disabilities.
• Limited English-speaking filers.

TCE assistance is available for filers over age 60, and volunteers specialize in questions about pensions and retirement-related issues.

All volunteers are certified by the IRS and many have professional backgrounds in accounting and finance.

6. Credit Karma Tax

Credit Karma provides free federal and state tax filing for the most common tax forms, including those for more complex tax situations, like business income (Schedule C) and itemizing deductions (Schedule A).

Plus, when you create an account to use Credit Karma Tax, you’ll also get access to Credit Karma’s other free services, including a look at your credit scores from TransUnion and Equifax, details from your credit reports and credit score monitoring.