Updated March 4, 2014

Best Tax Software: TurboTax vs H&R Block vs TaxACT

Personal Tax Software Showdown, 2014

The holiday shopping season is over, and with the new year comes a new season: tax season. Taxes are either something you look forward to (refund time!) or something you dread (lots of paperwork!). Regardless, doing your taxes has never been easier, thanks to software companies that have streamlined the process.

In the world of tax prep software, three giants reign supreme: TurboTax, H&R Block, and TaxACT. Each one promises to guide even the most novice of tax preparers to a successful filing. New and improved versions allow you to file from anywhere, using your computer, tablet, and even your smartphone.

But how do these products compare? And which one is the right one for you? To help you decide, CreditDonkey has done our own review of tax software to see how they stack up.

Roundup Methodology

Here are the main factors we considered in comparing tax software:

  1. Cost
  2. Accessibility
  3. Support

The great thing about filing your taxes online is that there are no upfront costs. All three programs let you fill out the information for free before charging you when it comes time to file. If your tax needs are simple, that cost will be low. But if your situation is a bit more complicated, say if you’re a small business owner, then expect to pay a lot more.

Of course, cost doesn’t matter much if the program is too complicated to use. Fortunately, all three programs are well-designed and intuitive. The programs will guide and ask you simple questions. Before you know it, your refund check will be on the way.

As simple as these programs can be, you may have experienced a new situation this year or a fancy tax term will leave you scrambling for help. That’s where software support comes in. While all three offer support, the options and cost vary widely from program to program.

Best Accessibility: TurboTax

  • Cost: Free federal file, Basic federal $34.99 (plus $36.99 state), 3/5
  • Accessibility: Program simplifies even the most confusing tax terms, 5/5
  • Support: Free phone and chat support, but no in-person support, 4/5
  • CreditDonkey Score: 4/5

TurboTax is arguably the most well-known name in the world of consumer tax preparation software. The program has a number of different versions designed to fit the needs of any tax filer. And you’ll pay more as your taxes get more complicated. Are you a single full-time worker with one job, no kids, no house? You would qualify for the free federal return. If you do have to pay to get the version that suits you best, you’ll likely find the added expense worth it, assuming you are not a tax expert. TurboTax comes with a clean and quick interface that’s as close as possible to making taxes sorta, kinda fun. Help is available with free phone and chat support.

More than any other software, TurboTax seems to be the one easing the pain of tax preparation. The program is a consistent winner with expert and customer reviews. Macworld reviewer Jeffrey Battersby wrote that the program is the “best, easiest to use tax filing product on the market.”

Why We Like It
TurboTax makes it possible for anyone to handle their own taxes, regardless of how complicated. And if you discover your taxes are maybe a little too complicated, the software’s extensive help system will guide you through.

Its Downsides
Depending on the version, TurboTax can be expensive. It is possible to file your federal return for free using TurboTax, but you’ll lose access to the “Walk me through everything” option that has made the program so popular.

Who It Works Best For
The software is ideal for small business owners or people who have multiple deductions.

Best Support: H&R Block at Home

  • Cost: Free federal file, Basic federal $19.99 (plus $36.99 state), 4/5
  • Accessibility: Well-designed but not as intuitive as competitors, 4/5
  • Support: Free phone, chat, and local office support, 5/5
  • CreditDonkey Score: 4.33/5

Like TurboTax, H&R Block at Home wants to appeal to a wide range of potential filers. The software comes in different versions with increasing features and costs, just like TurboTax. Both products do a great job of demystifying the tax code, but one trip around town shows where H&R Block stands out: real offices with – hold on – real people inside. This feature makes H&R appealing to those who still feel more comfortable sitting across from a professional with a calculator and a stack of papers. Also, while all three programs offer audit support, H&R Block is the only one that provides you with someone to represent you during your audit by the taxman.

H&R Block at Home is using this “best of both worlds” approach to stand out from an increasingly crowded marketplace. And, so far, the strategy appears to be working. PC Mag's Kathy Yakal wrote that “the variety of ways you can interact with the company’s experts is greater than what’s offered by any competitor.”

Why We Like It
With a combination of online resources and local offices, H&R Block is the only company to provide a true choice when it comes to tax preparation. The office can provide a sense of security for those wary of dealing with the IRS alone. Also, the office locations I’ve been to give you free coffee while you wait.

Its Downsides
While the coffee is free, the software is not. Prices are similar to TurboTax, but are also more than what most people likely need for basic returns. Software-only users might be forced to seek out expert support due to a more complicated interface.

Who It Works Best For
People already familiar with H&R Block software. Those with complicated returns who aren’t quite ready to commit full-time to a tax professional.

Best Pricing: TaxACT

  • Cost: Free federal file, state additional $14.99, 5/5
  • Accessibility: Easy to use for simple returns, 4/5
  • Support: Free e-mail support, 2/5 (the lack of support options is what's holding TaxACT back from wide adoption; offering free support only through e-mail is not enough for most people)
  • CreditDonkey Score: 3.67/5

The word “free” shows up 19 times on TaxACT’s homepage, so it’s clear who the software is targeting. TaxACT wants to be the first choice for people looking for a simple and cost-effective tax solution. And yes, while filing a federal return is free, filing a state return is not. Still, TaxACT is the cheapest solution for keeping the IRS happy. The program is a champ for basic returns but struggles with more advanced forms. Free support is offered in the way of an online answer center, but getting help via phone will require an additional cost.

TaxACT has made great strides over the past few years and is gaining on its competitors. CNET editors gave the program 4.5 out of 5 stars and wrote that they were “impressed with what it offers, especially compared to similar products.”

Why We Like It
It’s simple to use and costs less than all the other programs.

Its Downsides
Despite claiming to handle “simple AND complex tax returns,” TaxACT works best for the former. Support is there but the options are not as robust as from its competitors.

Who It Works Best For
Anyone with a simple return looking for the shortest route to a refund.

Web-based or Desktop

All of the products are available either directly through the Web or through an in-store purchase. The benefits of using a Web-based option means you can fill out and file your return remotely through your computer or mobile device. You can use the camera on your smartphone or tablet, take a picture of your W-2, and the software’s mobile app will do the rest.

But tax prep power users should consider downloading or buying a physical copy. As New York Times reviewer Tim Gray wrote, a single purchase lets you “prepare and file multiple returns.” Gray said that “what you lose in convenience, you gain in control.”

Other Software to Consider

For those with a simple W-2 without deductions, the IRS has a number of different options to file your federal return for free. Some of the products will also allow you to file your state taxes for free or for a reduced amount.

While we hope our research helps you decide which product to use, the right choice for you depends on your specific tax situation. In most cases, if your tax needs are complicated enough to make you question if you should see a professional, then the answer is likely “yes.”

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