52 KIPLINGER’S PERSONAL FINANCE^ 04/2020
- H&R Block
PROS: Smooth navigation
CONS: Costly upgrades
http://www.hrblock.com
In the past, you could count on H&R
Block to offer value at a reasonable
price. This year, not so much. While
our single taxpayer was able to stick
with the free online version, our item-
izing couple had to use the Deluxe
version, which costs $30 for a federal
and $37 for one state tax return. Block
offers eight online tax prep services
that range from free to $150.
Once you get over the sticker shock,
Block provides what you need with
little hassle. The software tracks your
refund—or the amount you owe—as
you complete your return, and you can
easily review your work for errors.
Taxpayers with only W-2 income and
no HSA contributions can file their
federal return and up to three state
returns for free. - TaxAct
PROS: Imports W-2s and previous-year
tax returns
CONS: Limited help
http://www.taxact.com
In years past, TaxAct was popular with
budget-minded taxpayers who didn’t
need a lot of assistance. The program
still doesn’t provide much in the way
of help, but it’s no longer a bargain.
Our fictional single taxpayer, who
claimed the standard deduction, was
required to upgrade to TaxAct Deluxe
because he deducted interest on his
student loan, even though he didn’t
have to itemize to claim this tax break.
That means he would need to shell
out $30 to file a federal return and
an additional $40 for one state return.
Our married couple had to upgrade
to TaxAct Premium—($40 for a fed-
eral return and $40 for a state return)
because they had a modest amount of
investment income. Live chat for tax-
related questions is limited to custom-
ers who purchase TaxAct’s Premium
or Self-Employed+ versions. Q - TaxSlayer
PROS: Classic version supports all returns
CONS: Limited tax help
http://www.taxslayer.com
TaxSlayer Classic provides great value
for people who don’t need a lot of
hand-holding. For only $17, any tax-
payer can complete a federal tax re-
turn using this program. Each state
tax return costs $29.
You can get some basic written tax
guidance if you’re a Classic user, but
you’ll have to pay an additional $37 to
upgrade to TaxSlayer Premium if you
need one-on-one help from a tax pro.
TaxSlayer allows you to import in-
formation from your W-2, and you can
import information from last year’s
return, even if you used a competitor’s
product.
returns, including returns filed via
TurboTax, H&R Block and TaxAct,
but can’t import your W-2s or 1099s.
You need to upgrade for access to live
chat from a tax professional, but the
cost is a modest $7. Plus, it costs only
$12.95 to prepare and file one state tax
return—about half of the amount some
other programs charge.- TurboTax
PROS: Superior navigation and help features;
imports most W-2s and 1099s
CONS: Free edition can be used only in limited
tax situations, and upgrades are expensive
http://www.turbotax.com
TurboTax excels in providing smooth
navigation and loads of support. It
also has the most robust import capa-
bilities, allowing users to import data
from more than 150 million W-2s,
along with information from hundreds
of financial institutions. For an addi-
tional charge (an extra $50 for Deluxe;
$70 for Premier), users can have a
certified public accountant review
their tax return and point out any
deductions they may have missed.
But unless you have a complex return
or are a nervous filer, that’s probably
overkill because the program does
such a good job of highlighting tax
breaks and alerting you to possible
errors. TurboTax provides clear and
understandable answers to questions,
and also provides videos and live help
from a large community of users at
no extra cost.
All of these bells and whistles come
at a cost. TurboTax offers a free version
to taxpayers who have W-2 income
and claim the standard deduction,
but even someone with a seemingly
straightforward return can quickly
become ineligible. Our fictional single
filer was required to upgrade to De-
luxe ($30 for a federal return and $40
for one state tax return) in order to de-
duct interest on a student loan. Our
itemizing couple had to upgrade to
Premier ($55 for a federal return and
$40 for one state tax return) because
they had a modest amount of invest-
ment income.
KipTipFree Filing
Most tax preparation providers offer a free
version of their programs, but it’s usually
limited to taxpayers with simple returns.
If you had income of $69,000 or less in
2019, however, you can prepare and e-file
your federal tax return through IRS Free
File even if your return is complex. Some
tax preparation companies that partici-
pate in IRS Free File include a free state
tax return; others will charge you for that.
This year, there are 10 Free File partici-
pants. Each participant is permitted to
impose its own criteria. For example, H&R
Block’s Free File program is open to tax-
payers with adjusted gross income of
$69,000 or less who are between the
ages of 17 and 51, along with active mem-
bers of the military with AGI of $69,000 or
less. The IRS provides a tool that will help
you find a program you’re eligible to use.
Be careful: Some tax software provid-
ers use search words such as “free file” to
persuade customers to sign up for pro-
grams that end up costing them money.
To avoid confusion, go straight to the
source: http://www.irs.gov/filing/free-file-do-
your-federal-taxes-for-free.MONEY
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