Tax app showdown
We know, tax time is the pits, but if it makes you feel better, we did ours six times while researching the pros and cons of TurboTax (Windows|Mac|Online), Tax Act (Windows|Online), and H&R Block At Home (Windows|Mac|Online), formerly called H&R Block Tax Cut. So we know a thing or three about taxes. (And we hate them six times more than you do.)
Obligatory disclaimer: We tested both the online and desktop versions of the Deluxe version of TaxAct, TurboTax, and H&R Block At Home (called Ultimate Bundle in TaxAct, since it includes the State return). We prepared our Federal and California state taxes online and on a Windows 7 computer, using our real W-2s and tax forms, so our experience may not reflect your personal situation.
What you need to know about tax prep software
- Which one?: Most software comes in four levels of guidance covering simple returns (the 1040 EZ form) to the complex. Most people go with Deluxe, which walks you through deductions for things like home owners and renters, investment income, dependents, and charitable donations. Premier or Premium adds on home ownership, rental property, and more complicated investments and deductions; Business keeps an eye on small-business owners after going through personal investments and deductions.
- E-filing versus printing: E-filing can net you a refund in as few as 8 days, whereas refunds on tax forms you print and mail can take up to 6 weeks. Most programs include at least one free Federal e-file for one tax return, but additional e-filing costs rack up after that. Many packages charge extra to e-file State returns or returns for additional family members.
- Online and desktop: All three programs offer online and desktop versions. H&R Block At Home and TurboTax support Windows and Mac; TaxAct is Windows-only. Online versions mostly mirror desktop versions, but with minor differences. Desktop software is typically licensed for up to five free Federal e-files (you can print off as many as you'd like), while online tax prep usually includes one free Federal e-file. Online tax returns are encrypted and stored on the provider's Web servers. Desktop returns are stored locally on your computer.
TurboTax vs. TaxAct, vs. H&R Block At Home: What's the difference?
When it comes down to it, the actual content of the tax interview--the questions and sections that the tax apps guide you through--is nearly identical in these competing programs, including the online and desktop variations. Clarity in language, extra tools, and help and support features are key differentiators, not to mention the price. We sum these up below. See more pricing charts here. Read full reviews on TurboTax, TaxAct, and H&R Block At Home.
Tax prep software 2009
|TurboTax Deluxe 2009||H&R Block At Home Deluxe 2009||TaxAct Ultimate Bundle 2009|
|Good||Strong importing options for W-2 and investment income; robust help files and community forum; new bookmarking feature. Separate audit support apps.||Now imports investment information; improved interface is easier to navigate. Includes (some) live support and live audit support. "Personal Tax Guide" for select professions.||Significantly lower prices; decent calculation tools.|
|Bad||Tina, the useless online digital assistant; too many summary screen interrupt flow, especially online.||Investment importing list still small; some gaps in Help files.||Most legal jargon; least amount of help and support. Weak importing, especially for investment information. Stripped-down interface.|
|Bottom line||TurboTax isn't the cheapest option, but it's clearly worded and saves you the most time when importing data. Its bundled tools make it worth the extra cost for those who don't anticipate needing personalized help.||The included support features make H&R Block At Home a sound value for those who prefer extra guidance, though the software still plays catch-up to TurboTax.||If you're a tax prep whiz who just wants to fly through the return with the fewest distractions and limited guidance, TaxAct is the most affordable of the bunch and netted us the same final result as the others.|
Which is better: Filing online or on the desktop?
- Pros of online tax prep: Convenient to start and file online; free option for simple forms; start and resume from any computer; flexibility for those without long-term access to a computer, or without rights to install programs on a Mac or a PC computer. Cons: Costs add up (it can cost $50 extra to download a State return and e-file it; even with the free online option); price covers one individual.
- Pros of desktop prep: More affordable for families (one package applies to five people); locally store data on the computer for offline access and sense of security; can download from the publisher's Web site or buy boxed. Cons: Installation takes time; Mac and Windows only--no Linux support; may need to transfer over previous years' files when switching computers over the years.
While there's no absolute rule, we tend to think of online tax prep as ideal for those filing individually. Desktop prep may be better suited for families, who can file up to five Federal e-files as part of the software license.
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