H&R Block At Home 2010 Federal and State Tax Software Review

Since I use a CPA to do my taxes, the past two years I've had a friend do a write-up of TaxCut software for me (here's 2008's review and here's 2009's review). We did the same thing again this year (except the software is now called H&R Block At Home), and here is his review.

This is my third year reviewing H&R Block’s TaxCut (now H&R Block At Home) tax program. The past two years I have printed the returns but I had not e-filed because the machine that I used in my basement office was not hooked to the internet. This year I thought I would try e-filing for the first time.

Last year I had a problem trying to download the updates on a computer with an internet connection and then transferring the updates to my basement computer. So, to avoid a 3 hour hassle again I ended loading the program on a laptop with an internet connection. I then proceeded to get the large updates and then downloaded the state forms. I then copied last year’s tax return file from the non-internet basement machine onto the laptop with the help of a thumb drive so that I could import last year’s data into the program.

At Home brought over the previous year’s tax information without a hitch and then it started to ask me if there were any changes to my family member’s data. I was then able to start responding to the orderly questions by logging in my income. The program showed the previous year’s 1099int, 1099div accounts, and bank accounts. You can add or delete the accounts as needed and then change the amounts. The same thing happened for the deduction section. It assumed that I was giving to the same charitable organizations and that my mortgage was with the same mortgage company.  I just added and deleted as with the income accounts.  This year I had purchased a vehicle that would qualify for a $1300 alternative fuel tax credit. I couldn’t find much information about the forms that needed to be filled out last year, but At Home filled in the proper forms like a trooper.  I was already well organized with my receipts so it only took about a half hour of answering questions before I was done with the 1040 federal return.

One gripe is that I am not a fan of the way that it prints the tax forms. I wish they would work on this function so that at any time you can just take a “draft” look at the 1040 form.  Maybe there is a way to do this, but it is not very intuitive. 

I then went to the state form and answered the questions and plugged in the numbers and was done with that form in about 15 minutes.  The State of Michigan hardly gives you any tax breaks so there is not much to fill out. (Unless you are some obscure wild rice farmer that uses homemade bio fuels to drive his 1809 machinery and make less than $15,000 per year. Then there are a bunch of tax breaks.)

I then printed out the forms with the schedules and worksheets, and reviewed all 60 pages of them.  I then preceded to e-file the tax federal tax return. I set up pass words and filled in the banking information for a direct deposit of the refund and sent it off. I got an email back from H&R Block stating that they will send me an email when the federal government acknowledges that they have received my tax return. (As of writing this I have not receive that acknowledgement which can take a day or two.)

I then turned to e-filing the state return. As I was going through the motions I found out that it wanted to charge me $9.95 to e-file the state return. I wondered about this and then looked at the fine print on the box. The software only includes free filing for federal returns and not state returns. What’s up with that! You pay good money for the program and yet they only include federal e-filing in the price?  No problem since I owed money. So I just backed out of the e-filing section, printed the form, attached a check, and popped it into an envelope.

Here are my findings:
 
Likes: 

• Easy to use.
• Putting income in accordance with the boxes that are on the w-2 and 1099’s.
• Checking the boxes of sections that you need to fill out and avoid wading though unwanted tax questions.

Dislikes:

• Print preview functions.
• No state e-filing included in the price.
• Price of the software.

At Home does a nice job a methodically moving you through the federal tax maze and takes a lot of the time out of researching the tax guide books on what forms and schedules that need to be filled out. This is truly the benefit of using the program.

However, I basically have the same beef as I did last year. Why is tax software so expensive? This beef is not against just At Home but all the major software vendors.  It seems that one should be able to buy the original software for $45 and then each year download any new updates and forms for a nominal $10 -$15. The architecture of the software has hardly changed from one year to another and you are already downloading the new federal and state forms from the internet. So why should we consumers have to buy a totally new package each year? I believe that the first software package to come up with an easy to use and accurate tax program with nominal upgrade charges each year will get the majority of the business.  Then again, maybe we should scrap the whole tax code and just do a straight flat tax on a post card and make all of our lives simpler.

Comments

[Jeffinwesternwa]

My Fred Meyer (Kroeger) Dept. store had the H&RBlock software on sale in January, the "home owner and investor edition" I purchased, sold for just $19.95 on sale (at least $10 off MSRP if not more) but, you ALSO got a $5 gift card with purchase, NET cost just $14.95! I like the ease of use, I dislike there is no way to "see" the Form 1040 in completion or as a draft, just various "sections" instead, still it updated, worked fine, asked the hard questions, (I purchased a vehicle for the special sales tax deduction for example and saved $913~ by NOT itemizing and had capital gains losses carried forward)...for the price, it could not be beat. Will use again this year. In fact the tax "estimator" is handy for what if scenarios and figuring witholding to file an updated W-4 or estimated quarterly payments, as often as you need! CAN'T BE BEAT FOR THE PRICE!

[Carrie]

I have used H&R Block online for the last several years and love it. The Basic package is cheap and really isn't that basic. I recommend it to everyone that asks me tax questions (I'm an accountant).

[billyjobob]

I've been using Turbo Tax. I like it ok, but I wish it was cheaper too. I even get a discount through Fidelity.

FMF. I liked the last line you wrote. "maybe we should scrap the whole tax code and just do a straight flat tax on a post card and make all of our lives simpler." I couldn't agree more. Our taxes really shouldn't be so complicated that it takes profesional help to get them done. I'd like to see a combination of a flat rate income tax and an increase in consumer tax to help pay our bills. Let those that consume more, pay more. What could be more fair?

[Kyle]

Back when I compared TaxCut with TurboTax, there was no comparison: TurboTax was the clear winner. But if I didn't run a business, I'd probably go with H&R Block just based on price.

[JD from Penny Saved]

I have used Tax Cut, er H&R Home Edition (what's up with the name change anyway?) for several years. I too bought it because it does an adequate job of doing my taxes, and it is usually cheaper than TurboTax. I agree that it adds insult to injury to have to pay for a product or service in order to pay taxes. I think even Congress could improve their approval ratings if they made the tax code simpler!

[StL Pastor]

Rather than a flat tax, what I'd really like is for the IRS to send out mostly completed tax forms (like Finland http://www.epractice.eu/en/news/289843), so that we wouldn't have to do so much work. Unfortunately, tax prep is big business, so it will probably never happen.

[Brian]

They keep sending me the CD in the mail at the high price. The first one had a coupon for $10 off, so I bought if off Amazon for a much cheaper price AND used the coupon...I think about $20 in all. They wasted all that money sending me 2 CDs in the mail, only to be thrown away. How that helps their profit margins I'll never understand. But now that I know how they market it, I'll never spend $40 again - at least not until the normal prices is $60 and the Amazon price is $40!

[kitty]

I use Turbo Tax which I get via State Farm. Online filing is free, but if I want my own copy it was nothing for cheapest, $19.95 for deluxe and $29.95 for the premier.

Except for this year I may have to go to an accountant after all. I do taxes for myself and for my parents. This year my parents' got final K-1 for a limited partnership that terminated (it was a real estate partnership they invested in years ago and that finally sold the commercial rental.

Normally K-1 with Turbo Tax is no big deal, but this time it has 4 items in box 20 which is other information and code Y which can mean virtually anything at that. Three of these items are section 743 adjustments to other items and one is final net capital loss or something (why wasn't it in other boxes which listed capital gains and losses for partnership?). The instructions on K-1 that the partnership sent says to read documentation to various forms (E, D, some other) about how to enter this information. Except for the relevant forms don't have this information. Interestingly, as I was searching the web for it, I found some accountant forum in which CPAs were asking advice from each other about entering some of those section 743 adjustments. One of the apparently gave wrong answer that another said was wrong but didn't provide clear answer. The final question in this discussion between CPAs was - "have anybody figured it out?". So how can I trust that a particular CPA would know? Plus my parents are low income - social security and some interest from savings/IRA distributions from whatever they managed to save during 15 years or so they worked in the US. They would already have to pay taxes on recaptured depreciation from this partnership - depreciation they haven't benefited from over the years because they were too low income for it to make a difference. So paying a few hundred dollars to an accountant when it's not even clear it'll make a difference isn't something I'd want.

Oh well, will try to read up more on this.

So yes, I agree to what people said about simplifying. The tax code shouldn't be as complex that two low income retired people need to spend hundreds of dollars (in addition to owing taxes on "phantom" income - taxable at 25% no less regardless of bracket - they never could take advantage of) on help.

[Johnathan Newman]

I am a pastor and thought H&R At Home did a great job getting it right although minister's taxes are confusing. I give it an A+ for that. But I give it an F because it will not allow ministers to efile. It claims that ministers cannot efile because there must be a written statement on minister's income and housing allowance etc. and attached to be mailed in with the forms. I have never needed to do this in the past. Turbo Tax never made me do this and my professional tax agent has never had to do this.

If H&R Block will get this right I will give them an A+ all the way around!