Last Edited by drawz
February 27, 2024
at
09:43 AM
Download vs online tax software comparison[thefinancebuff.com]
- Download Deluxe supports nearly everything that Premium does, including investments, real estate, self-employment, etc. The marketing from H&R Block is confusing here.
- When using download/desktop software, your data stays local, which is probably more secure (but make sure you have a backup!)
- Download includes 5 federal e-files and virtually unlimited printed returns.
- Downloaded state software allows preparation of state tax forms, but state e-file is an additional $20 per state. You can print and mail for virtually nothing. It is $40 to download the software for each additional state.
- Some states[thefinancebuff.com] allow free e-file on their dept of revenue website
- Online allows you to work from any device
- Online stores a copy of your tax return in the cloud for archival purposes and also next year's taxes
Some free options to try first...
1: FreeTaxUSA
(100% free for AGI $45,000 or less through FreeFile, Federal + State)
(no income limit, free federal, $15 for state) https://www.freetaxusa.com/
2: Cash App Taxes (Formally Credit Karma Tax)
(no income limit, free federal and free state) https://cash.app/taxes
3: OnlineTaxes (OLT.com)
(100% free for AGI $45,000 or less through FreeFile)
(no income limit, free federal, $10 state) https://olt.com/main/home/default.asp
One major advantage of H&R Block & TurboTax, download or online, is that they support importing 1099 forms from banks and brokerages. While this is definitely useful and can save some time, you often have to enter your passwords in their software, which some people are not comfortable with. With 1099 investment income, you can often enter aggregate data[hrblock.com] and not list each trade individually, which makes this much less painful that you might think.
Privacy concerns
Tax prep companies are required by law to get your consent before they can share your personal information with 3rd parties. If you are concerned about this, I recommend reading the privacy policies and/or license agreements from each company. Of course, you can avoid this issue altogether by using downloaded desktop software where your data stays on your local computer only. IRS FAQs Related to Strengthened Taxpayer Control over Tax Information[irs.gov]
"The general rule expressed in both the 1974 regulation and the 2007 regulation is that taxpayers – not the government - control their tax information. No tax information can be disclosed or used without taxpayer consent."
FreeTaxUSA Terms of Use[freetaxusa.com] "We do not and will not sell your information to third parties." OLT.com privacy policy[olt.com] "Specifically, we do not share, sell or rent your Personal Information to third-party advertisers, "spammers", or anyone else who we know will use it for their own advertising or marketing purposes." Cash App Taxes Privacy Policy[cash.app] - This one is a little more vague, read it carefully.
H&R Block and TurboTax online DO sell your personal information with your consent...but you can opt-out. See here[washingtonpost.com] for more details. Their free versions are quite limited and they also use deceptive marketing practices to try to upsell you to more expensive products. Both have been in trouble with the FTC for their deceptive marketing tactics.
This is a good deal for sure, and the download version of H&R Block/TurboTax are more powerful than their online counterparts. Comparison of H&R Block/TurboTax download to online.[thefinancebuff.com] Five federal e-files are included in the package, and you can print/mail many more. One common point of confusion - the state software included here is only the software to prepare the taxes, but does not include state e-file. That's an additional $20 or you can print/mail it for almost nothing (also see below).
One major advantage of H&R Block & TurboTax is that they support importing 1099 forms from banks and brokerages. While this is definitely useful and can save some time, you often have to enter your passwords in their software, which some people are not comfortable with. With 1099 investment income, you can often enter aggregate data[hrblock.com] and not list each trade individually, which makes this much less painful that you might think.
However, there are also free or low cost options that don't require you to share your information and do support the common investor forms. Tax prep companies are required by law to get your consent before they can share your personal information with 3rd parties.
FreeTaxUSA[freetaxusa.com]and OnLineTaxes[olt.com] are 100% free federal, regardless of income, and $10-15 per state if your AGI is > $45k. Both do not share your personal information with 3rd parties and both support nearly all tax forms.
H&R Block and TurboTax online DO sell your personal information with your consent...but you can opt-out. See here[washingtonpost.com] for more details. Their free versions are quite limited and they also use deceptive marketing practices to try to upsell you to more expensive products.
New this year is IRS Direct File[irs.gov], where you can file your taxes directly with the IRS. This is a pilot of their new online software that uses the typical interview process to generate your tax forms. The pilot is limited to 13 states and only supports limited tax scenarios. They will likely expand the functionality in the future.
Last, but not least is IRS Free Fillable Forms[irs.gov]. This is free for anyone and supports all forms, but is not interview-based software. This is basically an electronic version of the old paper forms.
Bonus: some states allow you to e-file for free directly on their department of revenue website. You either have to transcribe the numbers from your software of choice into their system, or just use their system in the first place. Quality of this software varies by state. List of states that support this[thefinancebuff.com].
Sign up for a Slickdeals account to remove this ad.
This is a good deal and the download version is much more safe than the online versions. This is much better than the free options that require you to share personal information and don't support many of the common investor forms.
The Deluxe download will work for nearly all tax returns, premium is generally not necessary for most people.
This is a good deal and the download version is much more safe than the online versions. This is much better than the free options that require you to share personal information and don't support many of the common investor forms.
I agree with you in principal about having a downloaded version vs. the online version and all of your data being stored at H&R Block BUT...
There are some security unknowns if you Fed File electronically w/H&R Block and if you use H&R Block's downloaded version to electronically pull your data from your employers (W-2) or Banks/Brokers.
- First, the password to secure your return within the app (is this stored securely or plain text)?
- Second, when your Federal (or State) return is electronically filed through H&R Block's servers on their way to the IRS (or your state tax agency), is that data sent securely (how secure) and is the data ever retained/stored at H&R Block for any purposes?
- Third, how are the credentials being passed over the internet, when the software connects to your bank/broker and is that data securely sent back to the software?
I hope all the above is done with extensive security in mind but it's something I've always wondered in the back of my mind....and I'm a 10+ year user of H&R Block. But again, just food for thought...
Nice deal ($14.99 after GC) too BTW, too bad it's linked to a limited amount of Gift Cards.
This is a good deal and the download version is much more safe than the online versions. This is much better than the free options that require you to share personal information and don't support many of the common investor forms.
The Deluxe download will work for nearly all tax returns, premium is generally not necessary for most people.
This is a good deal for sure, and the download version of H&R Block/TurboTax are more powerful than their online counterparts. Comparison of H&R Block/TurboTax download to online.[thefinancebuff.com] Five federal e-files are included in the package, and you can print/mail many more. One common point of confusion - the state software included here is only the software to prepare the taxes, but does not include state e-file. That's an additional $20 or you can print/mail it for almost nothing (also see below).
One major advantage of H&R Block & TurboTax is that they support importing 1099 forms from banks and brokerages. While this is definitely useful and can save some time, you often have to enter your passwords in their software, which some people are not comfortable with. With 1099 investment income, you can often enter aggregate data[hrblock.com] and not list each trade individually, which makes this much less painful that you might think.
However, there are also free or low cost options that don't require you to share your information and do support the common investor forms. Tax prep companies are required by law to get your consent before they can share your personal information with 3rd parties.
FreeTaxUSA[freetaxusa.com]and OnLineTaxes[olt.com] are 100% free federal, regardless of income, and $10-15 per state if your AGI is > $45k. Both do not share your personal information with 3rd parties and both support nearly all tax forms.
H&R Block and TurboTax online DO sell your personal information with your consent...but you can opt-out. See here[washingtonpost.com] for more details. Their free versions are quite limited and they also use deceptive marketing practices to try to upsell you to more expensive products.
New this year is IRS Direct File[irs.gov], where you can file your taxes directly with the IRS. This is a pilot of their new online software that uses the typical interview process to generate your tax forms. The pilot is limited to 13 states and only supports limited tax scenarios. They will likely expand the functionality in the future.
Last, but not least is IRS Free Fillable Forms[irs.gov]. This is free for anyone and supports all forms, but is not interview-based software. This is basically an electronic version of the old paper forms.
Bonus: some states allow you to e-file for free directly on their department of revenue website. You either have to transcribe the numbers from your software of choice into their system, or just use their system in the first place. Quality of this software varies by state. List of states that support this[thefinancebuff.com].
This is a good deal for sure, and the download version of H&R Block/TurboTax are more powerful than their online counterparts. Comparison of H&R Block/TurboTax download to online.[thefinancebuff.com] Five federal e-files are included in the package, and you can print/mail many more. One common point of confusion - the state software included here is only the software to prepare the taxes, but does not include state e-file. That's an additional $20 or you can print/mail it for almost nothing (also see below).
One major advantage of H&R Block & TurboTax is that they support importing 1099 forms from banks and brokerages. While this is definitely useful and can save some time, you often have to enter your passwords in their software, which some people are not comfortable with. With 1099 investment income, you can often enter aggregate data[hrblock.com] and not list each trade individually, which makes this much less painful that you might think.
However, there are also free or low cost options that don't require you to share your information and do support the common investor forms. Tax prep companies are required by law to get your consent before they can share your personal information with 3rd parties.
FreeTaxUSA[freetaxusa.com]and OnLineTaxes[olt.com] are 100% free federal, regardless of income, and $10-15 per state if your AGI is > $45k. Both do not share your personal information with 3rd parties and both support nearly all tax forms.
H&R Block and TurboTax online DO sell your personal information with your consent...but you can opt-out. See here[washingtonpost.com] for more details. Their free versions are quite limited and they also use deceptive marketing practices to try to upsell you to more expensive products.
New this year is IRS Direct File[irs.gov], where you can file your taxes directly with the IRS. This is a pilot of their new online software that uses the typical interview process to generate your tax forms. The pilot is limited to 13 states and only supports limited tax scenarios. They will likely expand the functionality in the future.
Last, but not least is IRS Free Fillable Forms[irs.gov]. This is free for anyone and supports all forms, but is not interview-based software. This is basically an electronic version of the old paper forms.
Bonus: some states allow you to e-file for free directly on their department of revenue website. You either have to transcribe the numbers from your software of choice into their system, or just use their system in the first place. Quality of this software varies by state. List of states that support this[thefinancebuff.com].
I agree with you in principal about having a downloaded version vs. the online version and all of your data being stored at H&R Block BUT...
There are some security unknowns if you Fed File electronically w/H&R Block and if you use H&R Block's downloaded version to electronically pull your data from your employers (W-2) or Banks/Brokers.
- First, the password to secure your return within the app (is this stored securely or plain text)?
- Second, when your Federal (or State) return is electronically filed through H&R Block's servers on their way to the IRS (or your state tax agency), is that data sent securely (how secure) and is the data ever retained/stored at H&R Block for any purposes?
- Third, how are the credentials being passed over the internet, when the software connects to your bank/broker and is that data securely sent back to the software?
I hope all the above is done with extensive security in mind but it's something I've always wondered in the back of my mind....and I'm a 10+ year user of H&R Block. But again, just food for thought...
Nice deal ($14.99 after GC) too BTW, too bad it's linked to a limited amount of Gift Cards.
1. Unclear, this information is not disclosed by H&R Block (or Intuit) as far as I can tell. It would be wise to ensure strong security and encryption for any device or location where you might store your tax files, including any original PDF documents you may have received. This includes backups in the cloud or elsewhere. Note that Windows now uses OneDrive by default for document storage if you sign in with a Microsoft account. Apple is similar with iCloud.
2. The IRS uses the Modernized E-file (MeF) Program[irs.gov] to define the file formats and security protocols any software must use to electronically transmit your tax return to them. This should generally be the same regardless of vendor, but they do go through the vendors servers en route to the IRS (i.e. not directly from PC to the IRS for download software). There is some discussion on Bogleheads and other forums about the IRS requiring tax software companies to keep a copy of the MeF file on their servers for a minimum of one year, but I could not find a reference for this. They certainly don't show it to you if they do.
State tax agencies will vary by state, but presumably similar protocols are in place.
You could avoid this by printing and mailing, but your mail can be intercepted too. Plus there will be delays in getting your return into their system (and therefore your refund). Registered mail would give you some degree of confirmation that it was received, but could still be lost or damaged before being processed. And of course there is the risk for transcription errors when the information is transferred from paper to their electronic systems. I personally feel safer with electronic submission.
3. The security protocols to banks & brokers is not disclosed. I know that in the past, I occasionally had to disable 2FA to import, but that hasn't been an issue in recent years. Some still require entering your bank/brokerage login/password into the tax software, whereas others use a code on the forms so you don't have to disclose these security details. This will vary by bank/broker and the tax software in use. Most secure is to not import anything.
We know that the online versions of H&R Block, TaxSlayer, and TaxAct shared private data with Google/Facebook[arstechnica.com], but this was not a security failure. I'm not aware of any data leak that has ever impacted download software. I am also unaware of any data breach that was the result of a security failure at ANY of the major tax prep companies. Feel free to share if you have evidence of these things happening.
I agree with you in principal about having a downloaded version vs. the online version and all of your data being stored at H&R Block BUT...
There are some security unknowns if you Fed File electronically w/H&R Block and if you use H&R Block's downloaded version to electronically pull your data from your employers (W-2) or Banks/Brokers.
I was shocked last year at how much personal data TT wanted from me to put into their system to file federally, I finally just opted to mail in my forms once again. I would love to just submit my forms electronically directly to the IRS.
One of these years I'm going to put these two programs side by side to see if they spit out the same result.
Quote
from drawz
:
...You could avoid this by printing and mailing, but your mail can be intercepted too. Plus there will be delays in getting your return into their system (and therefore your refund). Registered mail would give you some degree of confirmation that it was received, but could still be lost or damaged before being processed. And of course there is the risk for transcription errors when the information is transferred from paper to their electronic systems. I personally feel safer with electronic submission.
One year I mailed my forms and check in, IRS got the forms and LOST!!! the check. They said it was because it needed to be sent to another location internally.
Unfortunately the only one safeguarding your personal information is you.
This is a good deal and the download version is much more safe than the online versions. This is much better than the free options that require you to share personal information and don't support many of the common investor forms.
The Deluxe download will work for nearly all tax returns, premium is generally not necessary for most people.
This is a good deal and the download version is much more safe than the online versions. This is much better than the free options that require you to share personal information and don't support many of the common investor forms.
The Deluxe download will work for nearly all tax returns, premium is generally not necessary for most people.
Download is exactly the same security (https) as online version and data goes to the same database anyways....
This is a good software I used it to file my tax for years. EV rebate section supposedly be ready on March 1st for those who purchased an EV last year
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One major advantage of H&R Block & TurboTax is that they support importing 1099 forms from banks and brokerages. While this is definitely useful and can save some time, you often have to enter your passwords in their software, which some people are not comfortable with. With 1099 investment income, you can often enter aggregate data [hrblock.com] and not list each trade individually, which makes this much less painful that you might think.
However, there are also free or low cost options that don't require you to share your information and do support the common investor forms. Tax prep companies are required by law to get your consent before they can share your personal information with 3rd parties.
FreeTaxUSA [freetaxusa.com]and OnLineTaxes [olt.com] are 100% free federal, regardless of income, and $10-15 per state if your AGI is > $45k. Both do not share your personal information with 3rd parties and both support nearly all tax forms.
Cash App Taxes [cash.app] is 100% free federal and state, regardless of income. Their privacy policy [cash.app] is less explicit, but I don't think they share your information with 3rd parties. There are more scenarios that they don't support [cash.app], the biggest being multi-state taxes. But they do support [cash.app] most of what most people need, including investments, rentals, self-employment, etc.
H&R Block and TurboTax online DO sell your personal information with your consent...but you can opt-out. See here [washingtonpost.com] for more details. Their free versions are quite limited and they also use deceptive marketing practices to try to upsell you to more expensive products.
New this year is IRS Direct File [irs.gov], where you can file your taxes directly with the IRS. This is a pilot of their new online software that uses the typical interview process to generate your tax forms. The pilot is limited to 13 states and only supports limited tax scenarios. They will likely expand the functionality in the future.
Last, but not least is IRS Free Fillable Forms [irs.gov]. This is free for anyone and supports all forms, but is not interview-based software. This is basically an electronic version of the old paper forms.
Bonus: some states allow you to e-file for free directly on their department of revenue website. You either have to transcribe the numbers from your software of choice into their system, or just use their system in the first place. Quality of this software varies by state. List of states that support this [thefinancebuff.com].
Sign up for a Slickdeals account to remove this ad.
The Deluxe download will work for nearly all tax returns, premium is generally not necessary for most people.
There are some security unknowns if you Fed File electronically w/H&R Block and if you use H&R Block's downloaded version to electronically pull your data from your employers (W-2) or Banks/Brokers.
- First, the password to secure your return within the app (is this stored securely or plain text)?
- Second, when your Federal (or State) return is electronically filed through H&R Block's servers on their way to the IRS (or your state tax agency), is that data sent securely (how secure) and is the data ever retained/stored at H&R Block for any purposes?
- Third, how are the credentials being passed over the internet, when the software connects to your bank/broker and is that data securely sent back to the software?
I hope all the above is done with extensive security in mind but it's something I've always wondered in the back of my mind....and I'm a 10+ year user of H&R Block. But again, just food for thought...
Nice deal ($14.99 after GC) too BTW, too bad it's linked to a limited amount of Gift Cards.
The Deluxe download will work for nearly all tax returns, premium is generally not necessary for most people.
One major advantage of H&R Block & TurboTax is that they support importing 1099 forms from banks and brokerages. While this is definitely useful and can save some time, you often have to enter your passwords in their software, which some people are not comfortable with. With 1099 investment income, you can often enter aggregate data [hrblock.com] and not list each trade individually, which makes this much less painful that you might think.
However, there are also free or low cost options that don't require you to share your information and do support the common investor forms. Tax prep companies are required by law to get your consent before they can share your personal information with 3rd parties.
FreeTaxUSA [freetaxusa.com]and OnLineTaxes [olt.com] are 100% free federal, regardless of income, and $10-15 per state if your AGI is > $45k. Both do not share your personal information with 3rd parties and both support nearly all tax forms.
Cash App Taxes [cash.app] is 100% free federal and state, regardless of income. Their privacy policy [cash.app] is less explicit, but I don't think they share your information with 3rd parties. There are more scenarios that they don't support [cash.app], the biggest being multi-state taxes. But they do support [cash.app] most of what most people need, including investments, rentals, self-employment, etc.
H&R Block and TurboTax online DO sell your personal information with your consent...but you can opt-out. See here [washingtonpost.com] for more details. Their free versions are quite limited and they also use deceptive marketing practices to try to upsell you to more expensive products.
New this year is IRS Direct File [irs.gov], where you can file your taxes directly with the IRS. This is a pilot of their new online software that uses the typical interview process to generate your tax forms. The pilot is limited to 13 states and only supports limited tax scenarios. They will likely expand the functionality in the future.
Last, but not least is IRS Free Fillable Forms [irs.gov]. This is free for anyone and supports all forms, but is not interview-based software. This is basically an electronic version of the old paper forms.
Bonus: some states allow you to e-file for free directly on their department of revenue website. You either have to transcribe the numbers from your software of choice into their system, or just use their system in the first place. Quality of this software varies by state. List of states that support this [thefinancebuff.com].
One major advantage of H&R Block & TurboTax is that they support importing 1099 forms from banks and brokerages. While this is definitely useful and can save some time, you often have to enter your passwords in their software, which some people are not comfortable with. With 1099 investment income, you can often enter aggregate data [hrblock.com] and not list each trade individually, which makes this much less painful that you might think.
However, there are also free or low cost options that don't require you to share your information and do support the common investor forms. Tax prep companies are required by law to get your consent before they can share your personal information with 3rd parties.
FreeTaxUSA [freetaxusa.com]and OnLineTaxes [olt.com] are 100% free federal, regardless of income, and $10-15 per state if your AGI is > $45k. Both do not share your personal information with 3rd parties and both support nearly all tax forms.
Cash App Taxes [cash.app] is 100% free federal and state, regardless of income. Their privacy policy [cash.app] is less explicit, but I don't think they share your information with 3rd parties. There are more scenarios that they don't support [cash.app], the biggest being multi-state taxes. But they do support [cash.app] most of what most people need, including investments, rentals, self-employment, etc.
H&R Block and TurboTax online DO sell your personal information with your consent...but you can opt-out. See here [washingtonpost.com] for more details. Their free versions are quite limited and they also use deceptive marketing practices to try to upsell you to more expensive products.
New this year is IRS Direct File [irs.gov], where you can file your taxes directly with the IRS. This is a pilot of their new online software that uses the typical interview process to generate your tax forms. The pilot is limited to 13 states and only supports limited tax scenarios. They will likely expand the functionality in the future.
Last, but not least is IRS Free Fillable Forms [irs.gov]. This is free for anyone and supports all forms, but is not interview-based software. This is basically an electronic version of the old paper forms.
Bonus: some states allow you to e-file for free directly on their department of revenue website. You either have to transcribe the numbers from your software of choice into their system, or just use their system in the first place. Quality of this software varies by state. List of states that support this [thefinancebuff.com].
This is great info! Thank you!
There are some security unknowns if you Fed File electronically w/H&R Block and if you use H&R Block's downloaded version to electronically pull your data from your employers (W-2) or Banks/Brokers.
- First, the password to secure your return within the app (is this stored securely or plain text)?
- Second, when your Federal (or State) return is electronically filed through H&R Block's servers on their way to the IRS (or your state tax agency), is that data sent securely (how secure) and is the data ever retained/stored at H&R Block for any purposes?
- Third, how are the credentials being passed over the internet, when the software connects to your bank/broker and is that data securely sent back to the software?
I hope all the above is done with extensive security in mind but it's something I've always wondered in the back of my mind....and I'm a 10+ year user of H&R Block. But again, just food for thought...
Nice deal ($14.99 after GC) too BTW, too bad it's linked to a limited amount of Gift Cards.
2. The IRS uses the Modernized E-file (MeF) Program [irs.gov] to define the file formats and security protocols any software must use to electronically transmit your tax return to them. This should generally be the same regardless of vendor, but they do go through the vendors servers en route to the IRS (i.e. not directly from PC to the IRS for download software). There is some discussion on Bogleheads and other forums about the IRS requiring tax software companies to keep a copy of the MeF file on their servers for a minimum of one year, but I could not find a reference for this. They certainly don't show it to you if they do.
State tax agencies will vary by state, but presumably similar protocols are in place.
You could avoid this by printing and mailing, but your mail can be intercepted too. Plus there will be delays in getting your return into their system (and therefore your refund). Registered mail would give you some degree of confirmation that it was received, but could still be lost or damaged before being processed. And of course there is the risk for transcription errors when the information is transferred from paper to their electronic systems. I personally feel safer with electronic submission.
3. The security protocols to banks & brokers is not disclosed. I know that in the past, I occasionally had to disable 2FA to import, but that hasn't been an issue in recent years. Some still require entering your bank/brokerage login/password into the tax software, whereas others use a code on the forms so you don't have to disclose these security details. This will vary by bank/broker and the tax software in use. Most secure is to not import anything.
We know that the online versions of H&R Block, TaxSlayer, and TaxAct shared private data with Google/Facebook [arstechnica.com], but this was not a security failure. I'm not aware of any data leak that has ever impacted download software. I am also unaware of any data breach that was the result of a security failure at ANY of the major tax prep companies. Feel free to share if you have evidence of these things happening.
Sign up for a Slickdeals account to remove this ad.
There are some security unknowns if you Fed File electronically w/H&R Block and if you use H&R Block's downloaded version to electronically pull your data from your employers (W-2) or Banks/Brokers.
One of these years I'm going to put these two programs side by side to see if they spit out the same result.
Unfortunately the only one safeguarding your personal information is you.
The Deluxe download will work for nearly all tax returns, premium is generally not necessary for most people.
Does Deluxe work if you have a rental?
The Deluxe download will work for nearly all tax returns, premium is generally not necessary for most people.
This is a good software I used it to file my tax for years. EV rebate section supposedly be ready on March 1st for those who purchased an EV last year