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Wednesday, May 25, 2022

H&R Block 2022 review: Well-designed tax software with robust free filing

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H&R Block

H&R Block returns for the 2022 tax season with more well-rounded tax-preparation software that ranks almost at the top of our list of best tax software. Its software package offers four tiers of service that encompass most taxpayer situations. The surprisingly full-featured free version works very well for students and most W-2 employees.


What separates H&R Block from the pack is a free version that allows Form 1040 Schedule 1 — which includes deductions for student loans and tuition fees — as well as free support for the child tax credit, earned income tax credit and education credits. Those additions make H&R Block’s free plan an attractive choice for filers like students who don’t have complicated tax situations but want to claim certain important deductions and tax credits.  

A spare, simple interface and questionnaire-style process make H&R Block Online easy to use. Though not quite as smooth as our top pick, TurboTax, H&R Block Online employs a well-designed, interview-style system to guide you through your tax return and eliminate potential errors. The help screens and extra information are useful, if sometimes not easy to find. 


Like

  • Slightly lower pricing than other top tax software
  • Free basic audit support and 100% accuracy guarantee
  • Receive online assistance or get help in person
  • Child tax credit, student loan interest deductions and educator expenses can be claimed with the Free Online version

Don’t Like

  • Price tag is still relatively high
  • Less polished user experience
  • Online Assist doesn’t guarantee help from a CPA

Who should use H&R Block?

Much like TurboTax, H&R Block Online offers a range of tax-preparation software services that can cover most income tax situations. What separates H&R Block is the ability to get assistance in-person at a physical H&R Block office and the robustness of its free offering.

We recommend students and other filers looking for free tax software consider H&R Block, as well as taxpayers who’d like the option of making an in-person appointment with a tax preparation professional. If you’re filing multiple state returns, you might want to look elsewhere. (Jackson Hewitt, for instance, offers unlimited state returns, plus your federal return for $25.)

What are H&R Block’s different products?

H&R Block offers four different online products: Free Online, Deluxe, Premium and Self-Employed, which range from $0 to $85. The decision on which is best for you depends mostly on the deductions and tax credits you want to claim.


Free in-person audit support is offered with all H&R Block tax plans, and enhanced “Worry-Free Audit Support,” including IRS communication and in-person audit representation, can be added to any plan for $20. H&R Block’s Online Assist feature — additional virtual support with live assistance and screen-sharing — can also be purchased on top of any of the plans for either $40 more for Basic or Deluxe, or $60 for Premium or Self-Employed. Tax Identity Shield — proactive protection against tax identity theft — can be added to any plan for another $20.


Free Online: Best for students and most W-2 employees

The Free Online plan, as the name suggests, costs $0 for filing federal taxes and $0 for one state return. If you made money in multiple states, you’ll need to pay $37 for each additional state return.

H&R Block’s free tax plan works best for W-2 employees with simple tax returns, but it’s also great for students as it allows for both education tax credits and deductions for student loans, tuition and fees. 

The free plan includes coverage of 1040 Schedule 1, which allows reporting many more types of income like gambling winnings, alimony and stock options. It also allows for income adjustments such as educator expenses and IRA or student-loan interest deductions. 

While the free plan also covers 1040 Schedule 3 — “Additional Credits and Payments” — it doesn’t include most of the supplemental forms needed to claim the many credits, such as the increased child care credit, the retired saver’s credit and the electric vehicle credit, on that schedule. 

H&R Block Free Online does include Form 8863 for education credits, including the Lifetime Learning Credit and American Opportunity Credit, which again bolsters its appeal for students.

While the paid versions of H&R Block include access to phone or web chat support, the Free Online version does not. You can buy support: Online Assist ($40), Worry-Free Audit Support ($20) or Tax Identity Shield ($20). 

Deluxe: Best for itemizing deductions and HSAs

The Deluxe plan costs $30 for your federal return and $37 for each state return. 

H&R Block’s Deluxe plan offers all the features of the Free Online version with the addition of itemized deductions and support for health savings accounts. 

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H&R Block Deluxe plan includes many big deductions.


H&R Block

If you want to itemize any deductions, such as home mortgage interest, medical expenses and property taxes, you’ll need to file tax Form 1040 Schedule A, which is available in the Deluxe version. Likewise, if you want to deduct your HSA contributions, you’ll need to file Form 8889, which only comes with the Deluxe plan and up.

While the child tax credit, earned income credit and education credits are included in the Free Online plan, you’ll also need to use the Deluxe plan if you want to claim the child and dependent care credit or any additional tax credits and deductions.

As with the Free Online plan, adding professional tax assistance to the Deluxe plan via H&R Block’s Online Assist program increases the price by $40. Extra services like Worry-Free Audit Support and Tax Identity Shield service can both be added for $20 each.

Premium: Best for investors, landlords or those who sold cryptocurrency in 2021

The Premium plan costs $50 for your federal return plus $37 for each state return. 

The third tier of H&R Block tax plan options adds several layers of tax services for those with more complicated tax situations. If you earned money from a rental property or have capital gains from the sale of stock, a house or other investments, you’ll need to pay for the H&R Block Premium plan.

Likewise, if you gained or lost money from the sale of cryptocurrency, you’ll need to use the Premium plan. 

The cost for virtual professional help, including screen-sharing via Online Assist, goes up to $60 for the Premium plan. The Worry-Free Audit Support and Tax Identity Shield services are still available for $20 a piece.

Self-Employed: Best for gig workers, contractors and business owners

The starting price for H&R Block’s Self-Employed plan is $85 for your federal return plus $37 for each state return.

The Self-Employed plan works for taxpayers who are self-employed, as you might expect, but it also applies to owners of small businesses, gig workers like Uber drivers and freelancers. If you have a side job or revenue stream, you’ll likely have to select this advanced tax preparation plan.

Virtual help from a live human is available via Online Assist for an additional $60. The supplemental services Tax Identity Shield ($20) and Worry-Free Audit Support ($20) are also available at the same cost as with other plans. Online Assist is an extra service that can be added on to any of the H&R Block tax preparation plans. It costs $40 for Free and Deluxe plans, and adds $60 to the price of Premium and Self-Employed Plans. 

The service provides virtual tax assistance from a professional online. It lets you share your screen so the pro can see exactly what’s going on in order to solve your problem.

It’s important to note that Online Assist doesn’t guarantee that you will be advised by a certified public accountant. H&R Block says that your adviser will be “an H&R Block tax expert, enrolled agent or CPA.” The company claims that their Online Assist experts have “on average 12 years of experience and more than 100 hours of training.”

Most taxpayers with common tax situations won’t need online assistance. However, whether or not Online Assist is right for you depends on your comfort level with doing your taxes alone and the nature of your own specific tax situation.

You can always add Online Assist at any time during the tax filing process. If you run into questions you can’t answer yourself when running the H&R Block software, you might consider adding Online Assist to your plan.

H&R Block products, compared

Best for Product Federal State* Online Assist Add-on
Students and simple tax returns Free Online $0 $0 $40 federal, $0 for 1 state; $37 for each additional state
Maximizing tax deductions and credits Deluxe $30 $37 $70 federal, $37 state
Crypto, investing and real estate income Premium $50 $37 $110 federal, $37 state
Freelancers and business owners Self-Employed $85 $37 $145 federal, $37 state

*Cost is per state return filed.

Is H&R Block Online Assist worth the cost?

online-assist-hrblock.png

H&R Block

Online Assist is an extra service that can be added on to any of the H&R Block tax preparation plans. It costs $40 for Free and Deluxe plans, and adds $60 to the price of Premium and Self-Employed Plans. 

The service provides virtual tax assistance from a professional online. It lets you share your screen so the pro (again, not necessarily a CPA) can see exactly what’s going on in order to solve your problem.

Most taxpayers with common tax situations won’t need online assistance. However, whether or not Online Assist is right for you depends on your comfort level with doing your taxes alone and the nature of your own specific tax situation.

You can always add Online Assist at any time during the tax filing process. If you run into questions you can’t answer yourself when running the H&R Block software, you might consider adding Online Assist to your plan.

How are H&R Block’s software downloads different from its online service?

H&R Block also offers downloadable and CD versions of its software, broken down again into four tiers of services with similar limitations. The main differences between the downloaded software and the online service are the cost and the lack of a free state tax filing at the lowest level.

Whereas the online tax preparation software breaks down the levels into Free Online (base rate $0), Deluxe ($30), Premium ($50) and Self-Employed ($85), the downloadable versions are slightly different: Basic for $20; Deluxe + State for $45; Premium for $65; and Premium & Business for $80. H&R Block will also include a CD backup of the software for an additional $10.

For the downloads, a Basic plan at $20 is similar to the Free Online plan in terms of income and deductions, but unlike Free Online, it does not allow a free state tax filing. 

The downloads for the two middle plans, Deluxe + State and Premium, are virtually equivalent to their counterparts online, Deluxe and Premium, except for the price.  

It’s worth noting that alternative online sellers may offer the H&R Block downloads at cheaper prices than the tax provider itself. As of Feb. 4, Amazon was selling H&R Block Basic for $15, the H&R Block Deluxe + State edition for $30, the H&R Block Premium edition for $50, and the H&R Block Premium & Business edition for $55.

Other notable features

One of the coolest features in the H&R Block service is the ability to snap a picture of your W-2 instead of scanning it or entering details by hand. A simple text message to your phone contains a link to a secure webpage. Snap a quick photo with your phone, and your W-2 is uploaded instantly to your online account. The service also allows easy PDF uploads and transferring previous tax returns and forms.

You can choose to receive your tax refund from H&R Block in a few different ways:

  • Direct deposit
  • Paper check in the mail
  • Transfer to a Spruce mobile bank account from H&R Block
  • Transfer to the prepaid debit card Emerald Card

The Emerald Card is a Mastercard-branded prepaid debit card issued by MetaBank and offered by H&R Block. It works much like any debit card at retailers and ATMs, and funds are protected by the FDIC and Mastercard’s “Zero Liability” policy. 

Money from your refund can be automatically added to an Emerald card. Be sure to read the Cardholder Agreement on H&R Block and review the fees before deciding to get an Emerald Card.

H&R Block does offer a Refund Advance feature, but only for customers who schedule in-person appointments or use the company’s Digital Drop Off service. You can receive up to $3,500 at 0% APR on the day you file your return. The catch? You can only receive the loan on an Emerald Card, not via check or direct deposit — the card does allow one free transfer of funds via check or electronic transfer.

You’ll still need to be approved by the lender, MetaBank, but H&R Blocks claims that approvals only take minutes after applying. Refund Advance is currently only for early tax filers — it expires Feb. 28, 2022. Your loan can be automatically paid by your refund when it arrives, or you can pay back the loan by transferring money to H&R Block via the Emerald Card.

You can also use your expected tax refund to pay for your H&R Block tax preparation fees using a feature called Refund Transfer, but there’s an additional fee of $40.

hr-mobile

H&R Block’s MyBlock app lets you manage your Emerald Card.


H&R Block

H&R Block offers two different mobile apps to manage your tax returns: MyBlock and H&R Tax Prep and File. Both can be used to prepare your tax returns. Whereas Tax Prep and File focuses mainly on filing your tax return, the MyBlock app includes a variety of additional features like video chat with tax professionals, in-person appointment planning and managing a prepaid Emerald Card debit card.

Both apps let you prepare your tax return on your phone or via desktop computer. You can switch back and forth between the two as much as you like.

Along with the bevy of tax preparation tools for registered customers, H&R Block also offers free tax tools for anyone visiting their site, including a tax calculator to estimate the size of your refund, a “where’s my refund?” tool to track the status of your return and a tax prep checklist to review before you start the tax filing process. 

Summary

H&R Block 2022 tax software remains a top contender in the battle for best tax preparation software, though its user experience is not as clean or direct as TurboTax. The four various tiers of service cover most every common tax situation, and the Free Online plan could be a great fit for many students with loan deductions and W-2 filers with simple returns.

The optional Online Assist service offers virtual hand-holding at a reasonable price, and H&R Block overall includes many services of value for taxpayers, including mobile apps, tax calculators and multiple options for receiving tax refunds. And, if you run into trouble online, you can schedule an appointment in-person at an office, if necessary.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.



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