H&R Block has long been a trusted name in affordable tax preparation. (And their commercials have been pretty on-point for the past few years, too!) Now, they offer their DIY tax filing option online. What’s new this year, and what level of H&R Block’s online software might work best for your needs? Get the details in this review.

H&R Block — New Features for Tax Year 2016

H&R Block didn’t roll out many new features for tax year 2016. It still offers a trimmed-down, less-expensive tax filing option online. However, this year it did expand its More Zero option to include itemized deductions. This free online tax filing option is available for:

• Single or married filers who don’t have dependents and who use the 1040EZ form
• 1040 A filers who have expenses like student loan interest, educator expenses, and tuition and fees deductions
• 1040 Schedule A filers who itemize relatively simple expenses, such as mortgage interest, child care expenses, charitable donations, or medical expenses
• Those who qualify for the EITC (Earned Income Tax Credit) can claim it without paying for the software

Other than these expansions, H&R Block’s software for tax year 2016 is similar to what it’s offered in the past. With that said, it didn’t need major updates. It’s a solid tax preparation option for those who want to DIY file through a reputable provider without spending a fortune.

The Levels

Free

H&R Block’s free DIY version includes e-file for your federal taxes and an audit review. Even the free level will let you import your W-2s from certain employers and will automatically import last year’s tax return if you used TurboTax or TaxAct. Of course, it’ll also save your returns from year to year if you’ve used this software before.

The free version also comes with unlimited tax advice during standard chat hours. This is great if you’re confused on some points of your taxes or if this is the first time you’ve filed them on your own.

Plus, the free version will automatically import your federal filing information to your state taxes, ask you a few additional questions, and file your state taxes for free, too. This is a big benefit, as many other filing software options are free for federal taxes, but charge a hefty fee to file your state taxes.

All versions of H&R Block also come with free audit support and representation if you’re ever audited. This could be a huge savings if you have tax situations likely to get you into an audit.

H&R Block’s list of supported tax forms for the Free edition is surprisingly robust. It includes not only your basic 1040 forms, but also mortgage and student loan interest forms, tuition payment forms, and interest income.

So, who can file taxes for free with More Zero? A lot of people, it turns out! H&R Block estimates that six in 10 taxpayers will be eligible for More Zero this year. Basically if you file a 1040EZ or a 1040 A with relatively simple deductions, you may qualify.

Learn More About Tax Credits and Deductions for College Expenses

Deluxe

After expanding the More Zero edition to so many filers, H&R Block nixed the Basic edition this year. Now, you’ll skip straight from More Zero to Deluxe. The main difference (besides price!) is that Deluxe offers forms for more deductions. Right now, it costs $34.99 for federal filing and $36.99 per state return.

Deluxe offers all the same benefits as More Zero, but also includes reporting for freelancers and independent contractors, as well as the DeductionPro tool. This helps ensure that you get all the deductions for which you’re eligible. Supported forms include forms for Residential Energy Credits, Non-deductible IRAs, Health Savings Accounts, and more.

Now that homeowners and those with childcare expenses can use More Zero, only those with more deduction options will need to pay for the Deluxe Edition. But it’s a good fit for business owners who can file their business taxes using form C-EZ.

Premium

Premium includes everything included in Deluxe, as well as more support for rental property income and expenses, cost basis for home sales, gifts, inheritance assets, and more. It’s a better fit for those with more complicated self-employment taxes, including those who need to use Schedule C to report business income and deductions.

Premium also includes Schedule F for Profit or Loss from Farming and Schedule K-1 for Estate and Trust Income. Generally, it gives you access to any form you might need and support for filing those forms. Check out the full list of supported forms here.

The Premium version of H&R Block costs $54.99 for the 2017 tax season, with an additional $36.99 per state filed. That’s still a good deal for access to all these available forms.

The Interface

Signing up for an account with H&R Block was pretty simple. I didn’t notice additional security protocols, other than having to set three verification questions and meet their parameters for a password. I received an email as soon as I’d signed up.

Right after signing in and starting to file, the software asked how I filed taxes last year:

 

I was somewhat disappointed that I have to upload the PDF of last year’s taxes to take advantage of this feature. In the advertising, it sounds like H&R Block could just use your login information from the other provider to grab the information for you, like Mint.com does with my banking information. This is not the case, though uploading a PDF isn’t too terrible:

The basic interface of H&R Block’s software is similar to that of TurboTax, and it’s prettier than it was last year, with lots of fun little graphics. Unlike last year, you can now click around to any section, so you can do your taxes out of order. Or you can just let the software walk you through all your options.

The one exception here is that you’ll have to fill out all the personal information before you can jump around to other sections. But this is understandable.

Once I dug into the financial piece of the software, things were interesting. It’s nice because the software gives you access to any type of income you might possibly file, like this:

When I dig into a type of income I know isn’t included in the Free version that I’m currently using, the software lets me know how to upgrade:

Since you don’t have to pay until you get to the end of the process, you can continue to add forms as needed, and then pay for the lowest possible version when you finish your filing.

Even though H&R Block includes all the options you might need in this main income interface, it doesn’t offer to walk you through all the options step-by-step like TurboTax and other software options do. If you already know what types of income you have, this may not be an issue. If you’re less familiar with tax filing, you might need the step-by-step help others offer.

If you do opt for H&R Block, I’d probably come up with a system to ensure that you use the information on every single tax form you get in the mail — from your W-2s and 1099s to interest information from your bank. That way, you can be sure you won’t miss anything, even if the software isn’t asking you specific questions.

This isn’t to say that H&R Block doesn’t ask any questions. When I get to the end of my make-believe income filing, it asks a few questions about less-common income types, including income from foreign transactions.

What To Do If You Get Audited

Based on your answers in the Deductions and Allowances section, the software will recommend either an itemized or a standard deduction. This is par for the course with tax software. Personally, I’d trust the recommendation of H&R Block, since they have such a great reputation.

Who It’s For

I’d be most likely to recommend H&R Block to a friend with very simple-to-file taxes or to a friend who is experienced in filing his or her own taxes. I might actually use it myself this year and save some money on software fees. It’s best, though, for those who aren’t likely to miss forms and who don’t need the step-by-step help other tax software offers.

It’s certainly worth checking out if you’re in the market for a tax filing option for your W-2 and standard deduction taxes in 2016, especially if you have simple deductions that might not be included in other providers’ free tax filing versions.

Visit H&R Block’s website for more details.

Topics: financial planning • Money and Life • Personal Finance • Taxes

The post A Review of H&R Block’s 2017 Tax Preparation Software (Tax Year 2016) appeared first on The Dough Roller.

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