H&R Block vs. TurboTax vs. Jackson Hewitt: An Overview
Here comes tax season again, when you must decide whether you want to take the do-it-yourself route or hire somebody to prepare your tax return for you. However, the question isn’t that black and white. There’s a middle ground.
You can use one of several tax preparation online apps and software programs if you choose to prepare and file your own taxes. H&R Block, TurboTax, and Jackson Hewitt are among the most popular. Which you choose can depend on your personal financial situation and how much you want to spend. (Prices and features described below are as of Feb. 3, 2020.)
- All three providers offer various tiers of programs that you can choose among, depending on the complexity of your tax situation. More complicated means paying more.
- All three offer free editions for the simplest returns.
- The least expensive version used to be offered by Jackson Hewitt, but the other two companies have brought prices down to be more competitive.
- The most expensive programs for more-complex tax situations range from $49.99 (Jackson Hewitt) to $79.99 (H&R Block) and $90.00 (TurboTax).
Online vs. CD/Download vs. In-Person
All tax preparation platforms discussed in this article are online. H&R Block and TurboTax also have CDs as well as downloadable software. Jackson Hewitt and H&R Block also offer in-person filing. Generally speaking, CD/download versions are the least expensive and in-person filing is the most expensive. As features and services offered vary, direct comparison is difficult.
H&R Block offers four tiers of online tax preparation programs as of the 2020 filing season when you’re preparing your 2019 tax return: Free, Deluxe, Premium, and Self-Employed. The company also includes options to do it yourself with the help of a tax professional, uploading your documents for a tax pro to do for you, and making an appointment to sit with somebody who will do your taxes.
The Free online edition should do you just fine if you have only W-2 income and you rent your home. It can handle child dependents too. A free state return is part of the deal.
The Deluxe online plan, H&R Block’s next tier, is designed for homeowners, investors, those with retirement income, and those who’ve made contributions to health savings plans. It offers support for stock and other investment sales, and it also covers home-mortgage interest deductions, charitable giving deductions, and all other itemized deductions if you don’t want to claim the standard deduction. It costs $29.99—down from $49.99 last year—and that includes support for most Form 1099s, free tech support, and a “drag and drop” feature that permits the free importing of current and past-year data. Plan to spend an extra $36.99 for each state return filed.
The next plan is the Premium online tier, coming in at $49.99—down from $69.99 last year. This should meet the needs of freelancers and independent contractors who may have more than one 1099 but with expenses of less than $5,000, and it also accommodates investors who have rental property or sold stock. Again, each state return is an additional $36.99.
H&R Block also offers a Self-Employed online tier to serve the more than 60 million freelancers, independent contractors, and other self-employed taxpayers. Among its features are an import of Uber driver tax information and full support for common tax situations faced by self-employed individuals. This product costs $79.99—down from $104.99 last year—plus an additional $36.99 for each state tax return. The Self-Employed online edition includes support for rental property owners as well, although the Premium version does, too, if rental property is all you need.
Finally, there are add-on options that allow you to get assistance starting at $39.99 and topping out at $139.99. State returns range from free to $36.99 per state. In addition to all of the features and services included in the four tiers, these add-ons allow for a tax professional’s review and double check of your return, as well as officially signing the return before filing it for you.
All programs include live technical support if you run into a problem, along with a screen share feature that allows you to show where you’re having difficulty. H&R Block offers the ever-popular W-2 capture feature, so you can simply snap a pic of your form without entering all that tedious information by hand. And you can import your old returns if you did your taxes with another software provider in previous years.
TurboTax is thriving, not just because of its aggressive ad campaign but also because Intuit, the maker of TurboTax, also makes QuickBooks, the popular accounting software.
It offers a basic Free online edition that, like its competitors’ free products, is generally suitable for only the simplest tax situations and returns. A state return and e-filing come free with this package as well.
TurboTax is the only one of these programs that lets you seamlessly import from the accounting program QuickBooks.
TurboTax’s lowest-tier paid option, the Deluxe online package, is its most popular. It can deal with all manner of tax credits and deductions, and it’s offered for $40—down from $60 last year. Each state return costs an additional $40.
TurboTax’s Deluxe plan also maximizes mortgage interest and property tax deductions, and it offers a “deductible service” that can help you organize charitable donations and value them correctly. It searches more than 350 sources of tax deductions and credits, and covers freelance and 1099 income, along with simple expenses.
The $70 Premier online plan is $20 cheaper than last year and is what you’d use if you have investments. It also covers rental property and related tax implications. Each state return filed using this option will set you back another $40.
According to Turbotax, “TurboTax Premier has been completely redesigned to deliver the best experience and cover nearly every tax situation for the 21 million US taxpayers (1099Bs) with investments. There’s new personalized guidance to help you identify which type of investor you are—whether it’s retirement, employee stock, heavy stock trader, or you just sold a single stock this year—and ensure your taxes are done right. TurboTax Online also now supports uploading more than 2,000 cryptocurrency transactions at one time, covering the vast majority of taxpayers with cryptocurrency.”
The Self-Employed edition is the upper end of TurboTax’s online plans. It’s designed for small business owners and sole proprietors. It costs $90—down from $120 last year. This package lets users import data directly from QuickBooks, a significant advantage. You might have asset depreciation and Schedule C income as a small business owner, which would make the Self-Employed edition a necessity.
The Self-Employed version also gives you access to a TurboTax product specialist who can guide you through preparing your return. New for 2020, according to Turbo Tax, you can easily import your 1099-MISC using a picture from your mobile device.
A separate tier, TurboTax Live, includes upgraded online versions of Basic ($50 vs. $80 last year ), Deluxe ($90 vs. $120), Premiere ($140vs. $170), and Self-Employed ($170 vs. $200) that let you consult with a certified public accountant (CPA) or an Internal Revenue Service (IRS)–enrolled agent (EA) for help and advice. Included in each package is a review by a CPA or an EA to make sure you received all deductions and that your return is done right. You can also upgrade to a Live version from within other tiers.
You’ve probably noticed Jackson Hewitt cubicles in the superstore if you’re a Walmart customer. Jackson Hewitt has more than 6,000 locations, and half of them are inside Walmart stores. The company also offers an online filing platform. Unlike H&R Block and TurboTax, Jackson Hewitt did not lower its prices for the 2020 filing season.
Jackson Hewitt offers a free option for simple returns, including state filing, but you have to claim the standard deduction—no itemizing. You must earn less than $100,000 and can only have W-2 or unemployment income. You can be either married or single, and you can use the free version to claim the earned income tax credit (EITC), but only if you don’t have any dependents.
The next step up is a $29.99 Deluxe edition for more-complicated returns, plus $36.99 for each state return. It’s geared to homeowners, parents, and retirees, and includes covering retirement income. Children and other dependents are no problem. It can handle claiming the EITC and the child tax credit, as well as the child and dependent care credit. Student loans and educator expenses are covered as well.
The top tier Premier edition is aimed at small businesses, those who are self-employed, and anyone with an income over $100,000. It covers rental property income and expenses, as well. It will cost you $49.99, and an additional $36.99 per state.
All these packages include selling points, such as maximum refund guarantees, free e-filing of federal returns, and 100% accuracy. The differences involve how much you have to pay to access the features you need. All three offer federal and state returns at no cost for simple returns.
The differences between TurboTax’s Premier plan at $70 and Jackson Hewitt’s at $49.99 aren’t that apparent, but unlike last year, when there was a $40 price difference, this year the difference is only $20.
In 2020 we’re seeing substantial price drops from two of the three companies, and although Jackson Hewitt didn’t follow suit, its prices were already some of the lowest in the industry. All of the companies now have a compelling offering, but if you use QuickBooks, TurboTax’s price drop might make the QuickBooks integration available in its Self-Employed option more compelling than in the past.