Sunday, February 15, 2015

Tax Preparation

This year, like every other year since I came to the US, I started preparing my taxes the first week of February, using Turbo Tax DeLuxe (TT), and for the last 4 years I have used the same program to help my mother in law to prepare her taxes. TT is easy to use and efiling is a wonderful invention. However this year, due to some serious mistakes by Intuit and the designers of TT, some functionality was excluded from the installed DeLuxe version, and, in order to get these extras users were required to pay more. H&R Block (HRB) used this as an opportunity to expand their customer base. They offered their tax software free to anyone who had purchased Turbo Tax DeLuxe.

I had no reason to be dissatisfied with TT - I didn't need the extra funtionality, but I also saw no reason to not try out HRB, especially as it was going for free. So, I followed the instructions and sent off an email. Within two days I had the software installed on my computer alongside the already installed Turbo Tax.

I then set out to complete our taxes for 2014 in both programs to see if there was much difference between them. Both came up with identical results, however I had one small complication, a slight overpayment into my 401K which HRB resolved for me without any fuss, whereas TT advised that I needed to request a payment from my 401K and the associated 1099-R and some other form I would need to complete. HRB handled the overpayment as income, a solution I found much easier. And while I suspect somewhere in the future that small overpayment may be double taxed when the time comes to take distributions from my 401K, it is still a better solution for me.

I found a Consumer Reports comparison of these two tax programs online, see it here. Overall I agree with them, however I felt that TT interface was somewhat slicker, but HRB offers free In-Person Audit Support, whereas you do have to pay TT for this. The other big difference appeared when I was assisting my mother in law with her taxes. TT showed her owing over $500 in taxes, HRB on the other hand came up with a figure of less than $30 owed. I input the data three times in each program, same result each time. So, I printed out the two 1040s and compared them. The error in TT was immediately obvious.

I did one last complete run through on both returns and filed through HRB and I am afraid that TT has lost another customer, as I am sure I am not the only one who took HRB's offer and discovered the software to be as good, if not better, and cheaper overall. Too late Intuit back peddled and announced that they will roll back their greedy changes. HRB got some extremely inexpensive and very effective advertising handed to them on a plate by Intuit.

For many years I have been an advocate for TT - now I will be lauding HRB to anyone who cares to listen, while at the same time wondering if there were other years where errors in the software had caused differences in the final results. I will never know, because one thing is for sure, I am not revisiting my tax preparation for previous years, once is difficult enough! I absolutely hate doing tax returns, which is why I tackle them at the earliest possible moment.

So glad that is over for another year!