Tax Sites: TurboTax Is Still the One to Beat
H&R Block at Home
Not to be confused with the heavily marketed H&R Block Live (a videoconferencing tax-consulting service), H&R Block at Home Premium ($85 for one state and federal return, including e-filing charges) offers a wealth of options for adding human help to your tax software experience. Block also has beefed up its ability to import data from a previous year's return--though people who invest in H&R Block and Home Premium might be disappointed at how little Schedule C (sole proprietorship) data shows up.
Block at Home Premium lets you import 2010 tax data from the online or desktop versions of TurboTax, TaxAct online, or any H&R Block return. In my test importation of a PDF version of a TurboTax Online return, the fields that Block completed for me (most of the personal information) looked good. But I was disappointed to see no records of depreciated assets for my freelance writing business. Block also supports importation of payroll and investment data, but its partner roster is much smaller than TurboTax's.
Despite its supermarket color scheme, Block's lime green, orange, and aqua interface has a rather spartan simplicity, with few icons to break up the text. But because Block tends to put only one or two items on a page, getting through its Q&A-style interview takes a lot of clicking. Like other tax services, Block tailors the interview to your needs by presenting you at the outset with a checklist of "life events" (such as job changes, deaths, and purchase or foreclosure of a home).
But Block constrains you from navigating to topics upstream in its interview process by graying them out in the clickable 'Take Me To' list of topics (which is otherwise a very effective navigation tool, easily accessible via a button on the top right of every page). Block says that this limitation is designed to prevent users from altering its carefully designed Q&A flow.
Unfortunately, even getting to previously visited areas can be a challenge. In trying to revise my Schedule C business expenses, I had to click through a list of categories--there was no way to see them all on a single page and then click the one I wanted. The best workaround would be to flag a specific item using the Bookmark feature--but you don't always know that you'll want to revisit an item when you're first working on it.
I also found Block's approach to some business issues a little confusing. To enter the purchase of my iPad, which I wanted to write off as a Section 179 deduction, I first had to go through screens asking me to choose a standard accounting depreciation method. Eventually I reached the Section 179 option, but the process would have been a lot simpler if I could have seen it up front.
Block does provide some basic FAQ-style information in a pane to the right of each interview question, along with a search box. However, to get personal tax assistance from an H&R Block Tax professional--which is part of the service--you have to leave the Q&A completely and navigate to the main menu, where you type in your question. Block asks you to limit yourself to one tax topic per message, but you can send multiple messages.
On the other hand, Block's service does include audit defense help, which costs extra if you go with arch-rival (and already more expensive) TurboTax. If you want a tax pro to review and e-file your entire return, you can opt to pay $30 more for Block's Best of Both service (which raises the total cost to about that of TurboTax Online Home & Business with no tax pro review or audit defense).
Block has a solid product with a clean and simple design, and access to human help via messaging. It falls a bit short in the navigation department, and it doesn't deliver all the importing assistance you get with TurboTax, but otherwise it will amply meet the needs of many taxpayers.
TaxAct Online Ultimate Bundle
TaxAct from 2nd Story Software remains the outstanding bargain option among tax sites: The TaxAct Ultimate Bundle gives you federal and state returns, including e-filing, for just $18. To sweeten the deal further, TaxAct this year supports importing of 2010 returns in PDF form from a dazzling array of competitors: ATX, CompleteTax, eSmart Tax, ezTaxReturn.com, FreeTaxUSA, H&R Block At Home, IRS Free File Fillable Forms, Lacerte, ProSeries, TaxSlayer, and TurboTax.
TaxAct also lets you import W-2 data from employers who use the TALX W2Express service, but the only way to import 1099 data is via a CSV spreadsheet file, which most users would have to create. You might as well just enter the data manually.
TaxAct provides a very slick Q&A-based interface, with a running tax bill ticker, a bookmark feature, and navigation help via a 'Jump to Forms and Topics' link on the top right of each screen. Clicking the Help tab in the right pane gives you access to basic general explanations and answers related to the topic at hand in an updated Answer Center; other tabs afford one-click access to tax forms and assorted calculators.
More often than not, though, TaxAct's skimpy help will ultimately send you to a relevant IRS publication. This is particularly true of Schedule C topics for sole proprietors, for which TaxAct provides only bare-bones assistance. Also, the import function didn't transfer much Schedule C data from my 2010 TurboTax Online Home and Business-created PDF.
For $18, you can't expect much in the way of personalized or human help, and TaxAct doesn't provide it. But if you have a relatively simple return with no novel peculiarities, and you don't view importing W-2 or financial institution data as crucial, but you do want some inexpensive and straightforward guidance as an alternative to filling out the forms on your own, TaxAct may be all you need.
Next: TaxBrain 1040 Premium and CompleteTax Premium