- 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.
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
4: MyFreeTaxes
https://myfreetaxes.com/
5: IRS Free File: Do your Taxes for Free (for AGI $79,000 or less)
https://www.irs.gov/filing/free-f...s-for-free
https://irs.treasury.go
6. New Pilot for 2024: IRS Direct File
only supported in some states, limited functionality for this pilot
https://directfile.irs.
7. IRS Free Fillable Forms
(no income limit, federal only, not full featured software)
https://www.irs.gov/e-file-provid...able-forms
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.
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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].
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However, for download software e-file, I believe the data still goes through H&R Block (or Intuit) servers en route to the IRS servers. Proof of this (or the opposite) would be in the modernized e-file spec from the IRS. Or perhaps you could watch the open connections on your router while submitting your e-filed return.
Some more about the protocols from the IRS: https://www.irs.gov/e-file-provid...e-internet
In the end, I personally think e-filing is as secure as anything else you do online related to your financial and personal information. Mailing a return opens up slightly different risks and it's hard to quantify what is safer. Maybe driving to the IRS office and handing it to them yourself is the safest!
Your data will never get to H&R Block that way.
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IMHO, whatever Premium can do, Deluxe can do it too.
IMHO, whatever Premium can do, Deluxe can do it too.
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