Best Online Tax Software: TurboTax Online vs. HR Block Online 2012

Best Online Tax SoftwareCall me a nerd, but I like to get my taxes done as early as possible.  Beyond just trying to complete my taxes to file early, I also like to get an idea of where I stand in the tax realm.  That’s why I leverage the information in my Quicken to see exactly how much I’ve earned in dividends, interest, capital gains, salary, etc.  I then like to plug it into the tax software to see where I’m at, before the time even comes.

As such, I rely on online tax software like TurboTax Online and H&R Block Online.  I love using the online versions to figure out my taxes because both TurboTax and H&R Block don’t charge anything until you file.  So, you can input all your information and have it saved, and it’s free!  I love free…

This year, I decided to compare the two major pieces of tax software (at least the online versions), and let you know my thoughts.

 

H&R Block Online

HR Block OnlineI tried out H&R Block Online for the first time this year.  Last year I read a lot of reviews and heard a lot of positive comments from readers on my Free TurboTax 2012 Review that their primary tax tool was H&R Block.  As such, I was expecting it to be a really solid tool.

Getting Started with H&R Block Online

Starting with H&R Block Online was very straightforward.  As I was expecting, I just entered all my personal information, and it had options to download my W-2s and other statements from my banks or brokerages.  It was really quick to setup an account and enter all my information, which was useful.

The Pros of H&R Block Online

The best thing about H&R Block Online is the pricing.  H&R Block is much cheaper than its competitor TurboTax Online.

Right now, the prices are as follows -

  • Very Basic – Free
  • Basic – $19.95
  • Homeowners/Investors – $29.95
  • Self-Employed/Rental Property – $49.95

Also, I like that you can connect to your bank and brokerage accounts online and download your information.  You can connect to any of my favorite free online money management tools to get your information as well.

The Cons of H&R Block

The biggest cons of H&R Block Online is that it is a little difficult to use because of how it guides you through income and expenses.  I don’t know if this has to do with their delays in product completion, but it is relatively hard to complete the same transactions that you can easily input in TurboTax.  I was very disappointed with how difficult it was to enter different types of income using their Question and Answer system, and I had to go back through several times.  This was frustrating, especially when the data didn’t match at the end.

Also, there is no connectivity to any of the online accounting programs like Wave Accounting or  Freshbooks.  If you’re a business, this would be a great feature.

 

TurboTax Online

TurboTax OnlineI’ve been a huge fan of TurboTax for many years, which is why I have been writing a TurboTax Review every year and highlighting the changes that they have been making each year.  I continue to find TurboTax a great tool for doing taxes, and they continue to offer a great product with their online offering.

Getting Started with TurboTax Online

TurboTax Online also let’s you get started for free, which has enticed me to use their product each year.  I like being able to see everything with my taxes without having to make a commitment.  Just like H&R Block Online, you start by entering all your information.  If you’ve used their product before, all of your information will carry forward from prior years, which is helpful and saves time.  This also happens at H&R Block, but I find TurboTax Online to be more convenient.

The Pros of TurboTax Online

The best things about TurboTax Online is the ease of use, compatibility with financial software, and product completion.  TurboTax is very easy to use.  It walks you through everything, or let’s you go through the categories yourself.  I have always found their system of inputting income and expenses very easy, and TurboTax has connectivity with all the major banks and brokerages as well.  Plus, since it is an Intuit product, it also has connectivity to major online finance sites like Mint, and online accounting programs like Quickbooks Online.

The Cons of TurboTax Online

The biggest drawback of TurboTax Online is the price.  TurboTax Online is more expensive than H&R Block Online, especially when comparing investing and business versions.  While both companies offer a free level for basic taxes, beyond that, TurboTax is more expensive.  Plus, sometimes figuring out which version you need can be difficult.

  • Very Basic Level – Free
  • Basic – $19.99
  • Deluxe – $29.99 (Basic Income plus Itemized Deductions)
  • Premier – $49.99 (Investors)
  • Home & Business – $74.99 (Rental Property and Self-Employed)

As you can see, the most robust version is $25 more expensive than H&R Block Online.

 

Comparing The Options Side-by-Side

Look at the two options side by side.  You can see that TurboTax is priced slightly higher, especially when you are getting into Home & Business needs.  H&R Block Online offers home and business features in the Premium version, which is $25 less that TurboTax.

TurboTax HR Block Pricing

 

The Best Online Tax Software

As of right now, I think that TurboTax Online is the better of the two major online tax software programs.  I think that H&R Block Online needs to improve their user interface and connectivity options.

I think the big differentiator is that TurboTax Online wants you to file your taxes online, while H&R Block wants to leverage their software to get you into their storefronts where a tax professional can help you finish or review your return.  This is essentially their upsell, but it makes their online product less effective.

So, if you’re looking for online tax software, consider going with TurboTax Online.

What is your go-to tax software?

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  • http://www.wealthinformatics.com Suba

    I usually do a dry run of our taxes during the last week of the year, just incase we need to do any end of the year adjustments. This year I have not done that so far. I am a fan of Turbotax esp. their import features from most major brokerages. I am assuming H&R Block has them too?

    • http://thecollegeinvestor.com Robert

      Yes, H&R Block does allow you to import from most banks and brokerages. However, I wasn’t able to see that feature in full glory yet because the schedules weren’t ready.

  • http://moneylicious.org Ornella @ Moneylicious

    I think you beat me on filing taxes early. I usually complete it by the end of Feb. I find Turbo Tax to be pretty convenient.

  • http://www.thefreefinancialadvisor.com/average-joes-money-blog/ AverageJoe

    I’ve had complicated tax situations for years so I’ve had to use a CPA. It’s finally calming down, and in the next year or two I’m going to be doing my own. I appreciate the comparison because I haven’t yet read any blow-by-blow until now on these two products.

  • http://www.littlehouseinthevalley.com Little House

    I used H & R Block online last year. I can’t remember which version I used, but I liked that it was so easy. I’ll be using it again this year (and I don’t necessarily like doing taxes early because I usually owe.) I also haven’t received any of my W-2′s or 1099′s yet either, so I’ll have to wait. It’s great that you were able to get your taxes out of the way!

    • http://thecollegeinvestor.com Robert

      There not done – I use the data from my Quicken. The nice thing is that even if you owe, you can still e-File and not pay until April 15. A lot of people think they have to pay when they file, which isn’t true.

  • http://www.iheartbudgets.net Jacob @ iheartbudgets

    I’m not a fan of software in general. As a tax professional, we are CONSTANTLY amending returns for individuals who tried using software but didn’t know what they were doing. That being said, if you do know what you’re doing, you should be fine.