TurboTax, H&R Block, and TaxAct are the three major players that dominate the tax filing landscape.
TurboTax consistently produces the highest quality, easiest to use tax filing software on the market, and H&R Block follows closely on its heels. TaxAct tends to lag the pack in terms of usability, but it also chalks in at the lowest price point.
Each software offers “free” filing. However, the free filing has limits. All three offer paid filing tiers as well. Of course, each company offers different inclusions at each tier which makes comparing features all the more difficult. To clarify pricing, we’re comparing the three major players in 2021.
This article isn’t as much about the features as the prices. We’ll be comparing prices of TurboTax, H&R Block, and TaxAct 2021. We bucketed the programs in the closest features per version.
If you don’t know what tax software is right for you, check out our guide to the Best Tax Software which breaks down our picks based on your tax situation.
Note: These prices were compiled in early March. Prices change throughout tax season, with the lowest prices being available in December and January. We will adjust these prices as we find them, but there may be sales, specials, or discounts we miss. Please let us know in the comments if you find a good deal!
The Big Changes In 2021
Following the COVID-19 wave, all three of the major players had to adjust their pricing strategies, especially what they are including in their free offerings.
Historically, these companies have supported W-2 income, Social Security income, and in some cases the Earned Income Tax Credit (EITC) on their completely free offerings. In 2021, all three tax filing companies are supporting the following in their free tiers:
TurboTax and H&R Block are also supporting unemployment income on their Free Tiers, but TaxAct is not. H&R Block has expanded its Free coverage to include student loan interest and educational expenses. TurboTax took a different approach and included a free expert review with its Free tier (however it did not expand offerings beyond the listings above) as long as you file before February.
Both TurboTax and H&R Block are emphasizing their “Expert Assistance” options which come at a higher price point. TaxAct rolled out a similar “Xpert Help” functionality, but the price point isn’t disclosed yet. To top off the focus on virtual filing, H&R Block has a virtual “Have an expert do it” option in 2021.
In addition to expanding the free coverage, all three software packages kept pricing in line with the previous years.
Comparing Online Free Editions
TurboTax, H&R Block, and TaxAct all offer some form of completely free tax filing. That means the federal filing costs $0 and the first state costs $0. However, not all tax filers will qualify for the free pricing option.
For example, none of the big three supports Health Savings Account (HSA) contributions on the free pricing tier. If you or your employer contributed to an HSA in 2020, you can’t use the free tier. This is particularly disappointing since so many people have Health Savings Accounts, and the contributions are typically reported on a Form W-2. Additionally, none of the three support the Child and Dependent Care Tax Credit (For daycare, education costs, etc.) on the free tier.
However, H&R Block has expanded the free tier to encompass deductible student loan interest, child tax credits (not child care credits), and other education credits. TaxAct does not support student loan interest deductions, but it supports other education-related credits on its free tier.
If you file by March 27, 2021, TurboTax Free includes a free review from an enrolled agent or a CPA. While TurboTax’s free review from an expert sounds enticing, few people will qualify for TurboTax’s limited free tier.
Recommendation For Free File: For this reason, we still recommend H&R Block 2021 since it’s easy to use and includes the most options for free filers.
Comparing Online Deluxe Editions
Ok now that we’re moving into the deluxe” tiers, we can start really comparing prices of TurboTax, H&R Block, and TaxAct 2021. The Deluxe level is typically targeted toward people who want to “maximize deductions and credits.”
In theory, this should mean itemizers. In practice, it means anyone with dependent care expenses, student loan interest, HSA contributions, or some other sneaky credit that requires an upgrade.
In my opinion, the Deluxe tiers are the worst value for all of these software packages. Free software like Credit Karma Tax can cover these situations easily. Additionally, low-cost competitors like TaxHawk match the functionality at a lower price point.
While H&R Block and TaxAct support education credits at their lower tiers, TurboTax requires people with current higher education expenses to upgrade to Deluxe to claim their American Opportunity Credit.
H&R Block offers the lowest price at this tier, but users should look to alternatives before paying nearly $70 for a software that is available at much lower costs.
If you fall into this tier and have a basic tax return, you might check out Credit Karma Tax. It’s 100% free, and does have some limitations. But many people who fall into this category will find value at Credit Karma Tax.
Recommendation For Deluxe: We recommend skipping the Deluxe version of all of these products. You pay a lot of something that is offered free elsewhere. You should consider Credit Karma Tax, TaxSlayer, or FreeTaxUSA.
Comparing Online Premium Editions
The Premium pricing tier is where the big three players diverge in their offerings. At this tier, TurboTax and TaxAct only support landlords and stock market investors (including cryptocurrency traders). H&R Block also supports freelancers or gig economy workers who don’t have significant expenses.
This is also the tier where functionality becomes extremely important. For example, TurboTax supports integrations with Coinbase which makes it easy for cryptocurrency traders to report their gains or losses in terms of US Dollars. The other software packages don’t host such integrations.
Once again, TaxAct is the lowest price offering. However, not by much this year. In fact, we still think you should consider the TaxAct Alternatives – or even go off this list and check out TaxSlayer at this tier, which offers every form for a great price. Check out our full TaxSlayer review here.
If you’re a landlord, both TurboTax and H&R Block offer easy to use depreciation calculators that make it easy to claim the right deduction. I find TaxAct’s to be a little clunkier, but overall it offers a reasonable experience.
Recommendation For Premium: At this tier, there’s no clear winner. TurboTax offers the best experience, but H&R Block offers a lower price point. If you don’t need the cryptocurrency integration, H&R Block Premium may offer superior value.
Comparing Online Small Business Editions
The self-employed filing software is required for anyone who had Schedule C (self-employment) income. Given the rocky economic conditions of 2021, I suspect that a lot of people have done some gig work this year. All of those side hustlers will need to upgrade to this tier for their filing.
As previously noted, H&R Block Premium support users who want to declare Schedule C income, but don’t have significant expenses to report. However, those with significant expenses will need to upgrade to this level.
In terms of usability, TurboTax leads the pack. It integrates seamlessly with Quickbooks, offers plenty of options for imports, and makes it easy to depreciate your business assets. If your business doesn’t have assets, you may not need TurboTax or any of these software options. TaxSlayer Classic and TaxHawk offer similar functionality at much lower prices.
Recommendation For Self-Employed: Given the close pricing at the highest tier, TurboTax seems to have the advantage, but H&R Block is comparable for slightly less in price. If you don’t want to try something new, check out H&R Block Self Employed.
Comparing Prices Of TurboTax, H&R Block, and TaxAct Download Editions
While most tax filers will rely on online services to file their taxes, these three major players also offer downloadable software products. Downloadable products offer enhanced security by allowing users to avoid storing information in the cloud.
They function the same as the corresponding online software and typically cost more. But, in 2021, H&R Block seems to be offering some deals on its downloadable software. Even when you include the cost of e-filing, the overall price of downloading seems to be lower. Of course, this could change soon.
Below, we’ll be comparing prices of TurboTax, H&R Block, and TaxAct download versions. By the way, if you’re watching prices, you might have some luck shopping on Amazon.com. Buying the download software online is almost always less expensive than buying the physical product in a store.
Comparing Downloadable Basic Editions
At this point, H&R Block is the least expensive option among the basic software packages. While its still fairly expensive, it is the option we recommend this year.
Comparing Downloadable Deluxe Editions
Across the board, the Deluxe edition brings more functionality at a lower price point (compared to the Basic edition).
Comparing prices of TurboTax, H&R Block, and TaxAct deluxe editions, we again see the H&R Block is by far the low-cost leader. Given the dramatic price disparity, H&R Block is again the winner for downloadable Deluxe software.
Comparing Downloadable Premium Editions
The premium pricing tier is a significant jump from Deluxe pricing. However, H&R Block still holds the title as the low-cost leader. The overall price of the downloadable version of H&R Block Premium is, once again, a couple of dollars cheaper than its online offering.
Comparing Downloadable Self-Employed Editions
Consistent with other tiers, H&R Block is still the low price leader. Clocking in at under $100, the H&R Block downloadable software is quite a steal. If you’re going to use H&R Block Premiums & Business, you’ll actually save $12 by choosing to download.
TurboTax Self Home & Business
H&R Block Premium & Business
After comparing comparing prices of TurboTax, H&R Block, and TaxAct, H&R Block again emerges as the clear winner among the Big Three filing companies. But that doesn’t necessarily mean H&R Block will be the best choice for you.
What are your thoughts on tax software pricing? Have you used any of these companies?