Comparing Prices Of TurboTax, H&R Block, and TaxAct 2021

The Big Changes In 2021

Following the COVID-19 wave, all three of the major players had to adjust their pricing strategies, especially what they are including in their free offerings. 

Historically, these companies have supported W-2 income, Social Security income, and in some cases the Earned Income Tax Credit (EITC) on their completely free offerings. In 2021, all three tax filing companies are supporting the following in their free tiers:

• Recovery Rebate Credits (for people who didn’t receive their $1200 stimulus check)
• Earned Income Tax Credit (EITC)
• Child Tax Credits

TurboTax and H&R Block are also supporting unemployment income on their Free Tiers, but TaxAct is not. H&R Block has expanded its Free coverage to include student loan interest and educational expenses. TurboTax took a different approach and included a free expert review with its Free tier (however it did not expand offerings beyond the listings above) as long as you file before February.

Both TurboTax and H&R Block are emphasizing their “Expert Assistance” options which come at a higher price point. TaxAct rolled out a similar “Xpert Help” functionality, but the price point isn’t disclosed yet. To top off the focus on virtual filing, H&R Block has a virtual “Have an expert do it” option in 2021. 

In addition to expanding the free coverage, all three software packages kept pricing in line with the previous years.

Comparing Online Deluxe Editions

Ok now that we're moving into the deluxe" tiers, we can start really comparing prices of TurboTax, H&R Block, and TaxAct 2021. The Deluxe level is typically targeted toward people who want to “maximize deductions and credits.”

In theory, this should mean itemizers. In practice, it means anyone with dependent care expenses, student loan interest, HSA contributions, or some other sneaky credit that requires an upgrade.

In my opinion, the Deluxe tiers are the worst value for all of these software packages. Free software like Credit Karma Tax can cover these situations easily. Additionally, low-cost competitors like TaxHawk match the functionality at a lower price point.

While H&R Block and TaxAct support education credits at their lower tiers, TurboTax requires people with current higher education expenses to upgrade to Deluxe to claim their American Opportunity Credit.

H&R Block offers the lowest price at this tier, but users should look to alternatives before paying nearly $70 for a software that is available at much lower costs.

Comparing Online Premium Editions

The Premium pricing tier is where the big three players diverge in their offerings. At this tier, TurboTax and TaxAct only support landlords and stock market investors (including cryptocurrency traders). H&R Block also supports freelancers or gig economy workers who don’t have significant expenses.

This is also the tier where functionality becomes extremely important. For example, TurboTax supports integrations with Coinbase which makes it easy for cryptocurrency traders to report their gains or losses in terms of US Dollars. The other software packages don’t host such integrations.

Comparing Online Small Business Editions

The self-employed filing software is required for anyone who had Schedule C (self-employment) income. Given the rocky economic conditions of 2021, I suspect that a lot of people have done some gig work this year. All of those side hustlers will need to upgrade to this tier for their filing.

As previously noted, H&R Block Premium support users who want to declare Schedule C income, but don’t have significant expenses to report. However, those with significant expenses will need to upgrade to this level.

In terms of usability, TurboTax leads the pack. It integrates seamlessly with Quickbooks, offers plenty of options for imports, and makes it easy to depreciate your business assets. If your business doesn’t have assets, you may not need TurboTax or any of these software options. TaxSlayer Classic and TaxHawk offer similar functionality at much lower prices.

Comparing Prices Of TurboTax, H&R Block, and TaxAct Download Editions

While most tax filers will rely on online services to file their taxes, these three major players also offer downloadable software products. Downloadable products offer enhanced security by allowing users to avoid storing information in the cloud.

They function the same as the corresponding online software and typically cost more. But, in 2021, H&R Block seems to be offering some deals on its downloadable software. Even when you include the cost of e-filing, the overall price of downloading seems to be lower. Of course, this could change soon.

Below, we'll be comparing prices of TurboTax, H&R Block, and TaxAct download versions. By the way, if you’re watching prices, you might have some luck shopping on Amazon.com. Buying the download software online is almost always less expensive than buying the physical product in a store.

Comparing Downloadable Basic Editions

At this point, H&R Block is the least expensive option among the basic software packages. While its still fairly expensive, it is the option we recommend this year.

*First state is free.

Across the board, the Deluxe edition brings more functionality at a lower price point (compared to the Basic edition).

*First state is free.

*First state is free.

Comparing Downloadable Self-Employed Editions

Consistent with other tiers, H&R Block is still the low price leader. Clocking in at under $100, the H&R Block downloadable software is quite a steal. If you’re going to use H&R Block Premiums & Business, you'll actually save $12 by choosing to download.

*First state is free.