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Computerized Investing > March 18, 2017

An Overview of the Major Tax Prep Services 2017

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by Jaclyn N. McClellan

AAII

Each year we review tax preparation services. This year, before preparing our review, we surveyed a group of CI subscribers and AAII members on which service they use and asked for their input on its benefits and downsides. The responses were valuable in helping to focus our write-up, and we refer to their comments throughout.

In this article, we talk about the three major tax preparation services: TurboTax, TaxAct and H&R Block. For each, we give a brief overview, summarize the good and bad features as reported by survey respondents, and discuss the tools available, costs and security. Online versions are used to highlight the features of each service.

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Discussion

bob fox from PA posted 5 months ago:

The article states that the writer was prompted to purchase TurboTax Premium for sales of investments. Later in the article there is a link to forms included with all versions of TurboTax. Schedule D is on the list, so it is not necessary to upgrade to Premium. I completed my taxes, including stock sales, using the Deluxe version.


R Rubin from FL posted 5 months ago:

In this years version of TurboTax Deluxe there is a problem with the program. As soon as I get an explanation from the IRS I will be contacting Intuit about the problem. After filling out the itemized deductions section TurboTax concluded that the standard deduction was what I needed; however, it took my itemized deductions and entered them instead of the standard deduction. After the program did its review and said everything was okay I e-filed the return. It was accepted by the IRS and several days later the IRS (through Where is my Refund site) indicated that my refund was going to be less than what TurboTax indicated. My son, who is a wizard with Excel, put all my tax information into an excel spreadsheet he developed and found the mistake. We went back to TurboTax and sure enough there was an error. After telling me that the standard deduction was what should be used the program did not automatically take the standard deduction. For those using this year's TurboTax be aware of a possible problem in the program itself. I hope the IRS sends me an explanation so I can notify Intuit.


James from PA posted 5 months ago:

I was disappointed to learn that effective for 2016 tax year,the CD version of TurboTax cannot be installed on my computer with Windows XP operating system. I had to use the online version of TurboTax, which was more expensive. In addition, I was not able to import data from my 2015 TT tax file, even with assistance from customer service.


John Heckmueller from NC posted 5 months ago:

I used HRBlock Premium & Business to file a 1041 discretionary trust tax return. The program is very difficult to understand how it takes the interview inputs and passes them onto the forms. Some entries on the "Whole Form" inputs can be overridden but these overrides do not flow to other worksheets. It is not clear and I can find no instructions to the program that tell me what inputs flow automatically through others and onto the filing return. E.g. I discovered through experiment that the driver input for an NOL is on the apportionment worksheet for tax exempt interest even though I did not have any tax exempt interest. Also, when I entered data for a blend of foreign and domestic dividends the program assumed all the the dividends were foreign because I entered some "foreign taxes paid" on the data input worksheet. I go around it by just splitting the data into separate worksheets even though by 1099-Div from fidelity lumps the totals together. The program also has a peculiar way of apportioning expenses in such a way that the credit for Foreign taxes paid flowed to the beneficiary. I could override this issue on the federal return but could not get this to flow to the NC state return in the same manner. For the $7 credit, I stopped trying to fix it further.


Jeff from NY posted 5 months ago:

I have used the H&R Block software for many years and had only one minor problem a few years back. The issue was resolved by making a manual entry on a form. It is less expensive than TurboTax and e-file for both Federal and state is included at no extra cost. The only concern I have currently is that several updates were issued AFTER I filed and I do not know whether these may have affected calculations. I would guess that this is not unique to this brand.

I am curious about people filing later than usual this year. The IRS is warning people to file EARLIER to prevent fraud.


Deskandchairs from WA posted 5 months ago:

Jeff, in my opinion the admonition to file early is such nonsense. Only those with the most simple returns can accomplish this. (is that where most of the fraud occurs)?
Each year the IRS imposes more record keeping burdens on brokers and 1099s arrive later and later. I just received my corrected broker 1099 dated March 10 (plus time in the postal system). For those of us on this site (AAII) it would seem obvious that some investment activity is involved in our returns. Typical government "we are here to help" telling us to file early but making it impossible to do so. But, like you, it would be interesting to know more facts on the delayed filing trend (rather than mere opinion as I express above)


Scott O Connor from AZ posted 5 months ago:

Someone complained that Turbotax did not handle their irrevocable trust needs well. That would be because you need TurboTax Business for a 1041. Oops.

Turbotax is really good at importing data from prior returns, for asset depreciation, placeholders for K-1's, 1099's, etc.

I have a relatively complex return, with a Schedule C, plus numerous K-1's, and it handles my needs well.

e-filing, and electronic refunds are a snap.


Michael Armstrong from WA posted 5 months ago:

To comply with the IRS's advice to file early, and accommodate all the late-arriving 1099s, I just do the best I can with what I've got, and e-file before the end of January. Later, when I'm satisfied that I've got all my data, and received my refund, I file an amended return, usually early in April. I enclose a check for any more tax due, and explain the reason(s) for the amended return, as the IRS wants. They've never complained.


Charles Mc Chesney from PA posted 5 months ago:

There is a MAJOR error in the review of H&R Block software! The schedules and forms are different in the on-line and the downloadable or CD versions of the Deluxe version (Federal Forms.

I nearly had a heart attack when I read Jacklyn's review and saw that Deluxe, which I bought recently and have used for nearly 20 years had NO Schedule D!!! After all, if you are an investor, you MUST have Schedule D for stock gains and losses. After checking the HRB website, I found that the downloadable and CD versions of Deluxe have Schedules D & E and the on-line version does NOT.

So this is a warning to the unwary...


Claire August from NY posted 5 months ago:

I would urge tax software users to verify, early in the process, that 1099's and other tax documents can be imported from their brokers.
Even though my broker, Oppenheim & Co was compatible with H&RBlock, H&RB was unable to achieve the import. I switched to TurboTax and imported in a split-second.

To AAII: Re: Cost of TurboTax table listed above:
It would be very helpful to have an up-to-date cost table, since you note prices were increased
3/16/17. Thanks.



HW from WA posted 5 months ago:

I am so pissed with Turbo Tax. It's the second time I signed up for a service and price and just as I'm to file (and pay), I get a big price jump. 25% this time. No notice of the impending increase. And TT didn't prompt me for looking for more deductions as in previous years (like the State Sales Tax deduction for WA residents). I'm rereading this article and trying another service.


JB from CA posted 5 months ago:

I've used Turbo Tax for years. Next year Mac users will have to have Mac OS Sierra installed to run the program.

I had major difficulty this year with my defined benefit earnings 1099R because of the design of the input: I could not enter a Taxable Amount that was different from Gross Distribution and had to try several times before it was not considered an IRA Distribution. This had never happened before. I always use the Deluxe edition.

Good luck.


Thomas Hirsh from IL posted 5 months ago:

You need Turbotax Business to do a 1041 for a trust, but after I bought it I discovered Turbotax Business will not import 1099 data from brokerages.

I purchased it specifically because I had read that Turbotax had the smoothest imports of 1099 data.


Joseph Durusau from TX posted 5 months ago:

In addition to not working on Windows XP, the
CD version of Turbotax will not work on my
laptop computer running Windows 7, probably
because it has a smaller screen than the
program wants. Someone needt to tell Intuit
about the danger of hiring script kiddies to
do production programming. I'm going back
to the land of Excel.


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