H&R Block Review: Make Taxes Easy

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Everybody’s “favorite” time of year is here once again. It’s tax time.

If you’re looking for free tax filing this year, you can use H&R Block.

As one of the largest tax prep services, you can effortlessly file your federal and state taxes. And, you can enjoy other benefits that smaller tax prep software might not offer like a free Amazon gift card. 😉

I’ve used several tax prep programs over the years to file my taxes. H&R Block is one of my favorites because of the low cost, extensive tools, and it’s easy to use.

While TurboTax is still the “gold standard” for many, H&R Block places a close second. You will get similar results and pay less to file. In fact, it’s for these reasons I stopped using TurboTax. I personally tired of overpaying for similar results and experiences.

In this H&R Block review, you’ll see how you can maximize free tax filing. And, how to stretch your refund a little further.

H&R Block Review

Product Name: H&R Block

Product Description: H&R Block offers several different options at several price points to fit your needs when filing taxes.

Overall
4.33
  • Ease of Use
  • Cost
  • Features

Free Tax Filing 2018: Where to Go

If you pay rent and didn’t sell any investments in 2018, there’s a good chance you can file your federal and state income tax returns free!

It used to be that the only way to get free tax filing was making less than a certain annual income. Now, you can file for free regardless of your income if you only need to claim the following income and deductions:

  • W-2 Income (not Form 1099 self-employment income)
  • Interest and Dividend Income
  • Student Loan Interest
  • Earned Income Credit
  • Child Tax Credits

If you have home mortgage interest to deduct, sold investments, own rental property or earn freelancer or self-employed income, you will have to pay to file your return with H&R Block.

H&R Block Free

  • Federal Cost: $0
  • State Cost: $0

H&R Block calls their free filing option, “H&R Block Free.”

With this option, you can file basic federal and state returns free. Seriously, no strings attached.

If this isn’t your first tax season, you probably remember filing your federal return for free. But, having to pay to file your state return. This fee is usually around $40.

Who Can Use It?

H&R states their Free platform is best if you “have a W-2, kids, and rent.”

But, you might fall into this category if you have itemized in the past because of the 2017 Tax Cuts and Jobs Acts is making it harder to itemize. For tax year 2018, experts estimate only 10% of people can itemize instead of the usual 30%.

Gen Z college students and young Millennials will most likely be able to file for free. Even homeowners who don’t have enough itemized deductions ($12,000 for single filers and $24,000 for joint filers).

Easily Upload Your Tax Documents

Block’s free tax filing 2018 perks are pretty good. In the past, you had to type all your tax information by hand. To upload your documents, you needed to upgrade to a paid option.

With your mobile device or webcam, you can take a picture of your W-2. In seconds, the data uploads to H&R Block and spares you from accidentally typing the wrong information into the incorrect box.

You can also upload the forms you receive from your bank, brokerage, health insurance marketplaces, and student loan lenders too. Some of these forms include:

  • 1095-A (Health Insurance)
  • 1098-E (Student Loan Interest Paid)
  • 1099-DIV (Stock Dividends)
  • 1099-INT (Bank Account Interest)

And, H&R Block lets you import last year’s tax return that makes completing this year’s return faster.

Free Earned Income Tax Credit

The free version of H&R Block sees if you qualify for more than 350 credits and deductions. One of these is the Earned Income Tax Credit. If you qualify, you can boost your tax refund without paying a dime to file your return.

Free Chat Technical Support

Since you’re filing a “simple” return, you shouldn’t have any complex tax questions. For the tax questions you do have, you should be able to find an answer in the online self-help guide.

If you can’t figure out how to upload a form or need help navigating the platform, H&R Block offers free chat support. Keep in mind, this isn’t free tax advice like you get from an accountant or Block’s premium Tax Pro Review.

Refund Reveal Explains Refund Amount Changes

The various tax prep programs display your current tax refund amount in real-time. As you enter new income, deductions, and credits, that dollar amount fluctuates. If you’re a tax novice, you might not understand why the refund amount changes.

The Refund Reveal tool helps explain these changes so you understand why you are receiving the tax refund you are. Or, why you’re paying in this year if enough wasn’t withheld.

5% Amazon Gift Card Bonus

When you choose to receive your tax refund as an Amazon gift card, Amazon boosts your balance by 5%. Let’s say you put your entire $3,000 refund on a gift card. If so, you get a $150 cash bonus. You can use all or part of your refund as Amazon cash if you choose.

Despite the 5% bonus, a better use of your tax refund can be paying high-interest debt or putting your cash into a sinking fund.

For instance, I used my tax refund to make extra student loan payments to pay them off early.

Free Tax Audit Support

If you’re audited, H&R Block provides free basic audit support. They will help explain the audit process and what follow-up actions you may need to complete.

This free benefit doesn’t include audit defense where an H&R Block provides in-person representation when meeting with the IRS agent. This deluxe coverage costs extra.

Tax Filing Options for Homeowners and Investors

If you deduct mortgage interest and property taxes or sell stock in 2018, you have to pay H&R Block to file your federal and state returns. The IRS requires you to report this information on a separate tax form that you include with the standard Tax Form 1040.

These are the three main reasons you have to fill out an extra schedule:

  • Mortgage Interest or Property Taxes (Schedule A)
  • Self-Employment Income (Schedule C-EZ or Schedule C)
  • Investment Income by Selling Shares of Stock (Schedule D)

Our tax code is confusing. Don’t worry about the exact Schedules you must complete right now. H&R Block walks you through every tax situation and fills out these additional forms when you reach that part of the process. Even if you start with the free option, they will notify you when you need to upgrade to an advanced plan to continue filing.

If you can’t file for free, you will most likely either use the Deluxe or Premium plan. For an extra set of eyes on your return, you may also opt for the TaxProGo which lets you file online with the help of an H&R tax professional who offers personal tax advice.

Tip: Save money by filing your taxes ASAP. H&R Block raises prices as the April 15 tax filing deadline approaches. You can get up to 25% off your federal return by acting now.

Deluxe Plan

  • Federal Cost: $29.99   (Full Price is $49.99)
  • State Cost: $36.99

Want me to let you in on a little secret?

Downloading the Deluxe software to file your federal and state income tax (instead of filing online) can save you $12.

Who Can Use It?

Homeowners and itemizers with W-2 Income who didn’t sell any investments in 2018.

Itemize Mortgage Interest, Taxes, and Charity (Schedule A)

Mortgage interest deductions, state and local property taxes (up to $10,000), charitable contributions, and medical expenses are all itemizable expenses.

Since you can claim more deductions, H&R Block uses a more extensive screener to find more deductions. Their DeductionPro tool that provides the value of any tangible items you donate. For instance, this tool assigns a cash value to your clothing and household items you donate to your local thrift store.

Free Tax Document Storage

It’s a good idea to keep a paper copy of your tax return in your personal files for up to six years. This way, you have a copy if you need to apply for a loan or apply to an IRS inquiry. If you’re audited, the IRS can request your tax documents for the most recent six years.

Having a digital copy on H&R Block means you never lose your documents. It’s also easier to send a copy to the loan officer. And if you move to a new house, you don’t have to worry about losing these important papers during a packing purge.

Phone Technical Support

If you don’t like live chat support, you get free phone technical support with H&R Block Deluxe.

Premium Plan

  • Federal Cost: $49.99   (Full Price is $69.99)
  • State Cost: $36.99

Who Can Use It?

When you sell investments or earn freelancing income in 2018, you must use Premium.

Even if you sell one share of stock, your broker will send you an extra tax form that requires a Schedule D. For instance, a family member in 2017 sold stock and had $60 in taxable capital gains and didn’t itemize. They had to use the Premium option to complete a Schedule D.

Had they not sold any shares and continued to collect the regular dividend payments, they could have filed for free.

Also, if you earned any freelancer or self-employment income and receive a Form 1099, you have to file a Schedule C-EZ. When filing a C-EZ, you can still claim basic self-employment deductions less than $5,000 total. You might complete this form if you have an online side hustle.

Having employees or claiming asset depreciation means you have to upgrade to the Self-Employed plan. This applies to rideshare drivers.

Import 1099-B Investment Income

So you don’t spend as much time completing the Schedule D as the rest of your tax return, you can import your broker’s investment income statement. On the Schedule D, you must report the cost basis (the original investment amount) and the final sales value for each investment sale you make.

This can be a monotonous task. It’s also easy to type the wrong information in the wrong field causing further delays

H&R Block helps you determine the accurate cost basis for stocks, home sales, inheritance, and other investment income.

Import Expenses from Expense-Tracking Apps

When you have freelancer income to report from a Form 1099, you probably have deductible expenses too. You can import your expenses from apps like Stride, Uber, and Lyft. These apps can track your mileage and other expenses so you don’t want to forget.

As a self-employed person, I keep a running log for all my business-related expenses so I can quickly tally my expenses in January. And, tracking expenses in real-time ensures you don’t forget certain expenses.

Self-Employed

  • Federal Cost: $79.99   (Full Price is $104.99)
  • State Cost: $36.99

Who Can Use This?

If you’re a business owner, you will need to submit the full-scale Schedule C. Rideshare drivers hustling for Uber or Lyft will need to use H&R Block Self-Employed too.

To save you money, H&R Block will determine if you can file a Schedule C-EZ first. They will prompt you to upgrade if you have a complex self-employment tax situation.

Find Common Business Deductions

One benefit of being self-employed is that you can deduct certain expenses that W-2 employees can’t. To help you find every possible deduction, H&R Block helps you find eligible business deductions, asset depreciation, and startup costs to lower your taxable income.

Get Assisted Tax Prep Online

H&R Block also offers two virtual tax prep add-on services. With either option, a tax expert reviews your return to look for any missed deductions and potential audit red flags.

Tax Pro Review

  • Cost: $49.99 plus federal and state filing fees

With Tax Pro Review, you complete your return yourself and a tax expert reviews it before sending it to Washington.

This isn’t a bad idea if you’re itemizing or you earn self-employment income as these two types of returns are more complex.

Tax Pro Go

  • Cost: Starting at $59.99 plus federal and state filing fees

The other virtual tax prep option is Tax Pro Go. This is most similar to walking into your local H&R Block office to file your taxes. Since it takes place online, it can be cheaper and more convenient if you have a busy schedule.

With Tax Pro Go, the tax expert completes your tax return for you. This is ideal for complex returns where you deduct asset depreciation or payroll expenses.

Tax Pro Go is also good when you don’t feel confident completing the forms by yourself.

What We Like About H&R Block

  • Most non-itemizers can file federal and state taxes free
  • All plans can digitally import tax documents to quickly complete return
  • Easy-to-Navigate Platform
  • 5% Amazon gift card bonus
  • Can have a tax expert review your return (Tax Pro Review or Tax Pro Go)

H&R is one of the best tax prep programs for free tax filing. Even if you have to pay, the user experience is better than discount filing programs.

What We Dislike About H&R Block

  • Six years of storage only comes with paid plans
  • Can file Self-Employed returns for less elsewhere online

If you want H&R Block to digitally save your tax documents, you must pay for a premium plan. Some people might wish to have free document storage in lieu of having H&R Block auto-fill your taxable income into your Form 1040 tax return.

What Else To Know About Filing 2018 Taxes

While you have to file income taxes every year, your tax return will be different this year. If your employer withholds part of your paycheck, you might already see a small difference in your take-home pay.

Below are a few important changes you should know about so you don’t think H&R Block is miscalculating your taxable income.

Fewer People Can Itemize

While we’re not going to talk about all the 2018 tax law changes, one notable change is the increased standard deduction. Before, roughly 30% of taxpayers filed an itemized return with multiple tax-deductible expenses. That number is expected to shrink to 10% of all filers now.

This is partially because of several deduction removals like tax prep fees and unreimbursed work and travel expenses. Keep in mind, you can still deduct most of these expenses if you file a Schedule C to report self-employment income.

And, because the standard deduction doubles to these new amounts:

  • Single Filers: $12,000
  • Head of Household: $18,000
  • Married, Filing Jointly: $24,000

To “itemize,” you’re essentially limited to the three most commonly itemized expenses:

  • Home Mortgage Interest
  • State and Local Taxes
  • Charitable Deductions

Change to Home Mortgage Interest Deduction

If you have a mortgage originating on or after December 15, 2017, you can only claim the interest paid on the first $750,000 loan balance.

This restriction primarily affects homebuyers in high-cost-of-living areas like San Francisco.

State and Local Tax Deductions Capped at $10,000

You can now only deduct the first $10,000 in state and local income, sales, and property taxes each year. This deduction is more commonly known as SALT.

Anybody Can Deduct Student Loan Interest

One deduction that isn’t changing is deducting student loan interest. Even if you file for free, you can deduct the first $2,500 of student loan interest. You will receive Form 1098-E from your lenders stating how much interest you paid.

This deduction instantly reduces your taxable income just like pre-tax, traditional 401k or IRA contributions.

Health Insurance Is No Longer Required

For the past few years, you were subject to a financial penalty if you didn’t have adequate health insurance coverage from your employer, healthcare marketplace, or a health sharing ministry. The IRS collected this fee when you filed your federal income tax return.

With tax year 2018, the individual mandate is no more! If you paid penalties in the past, you won’t pay one this year.

Compare Prices for Downloading Software and Filing Online

To save a few dollars, compare H&R Block’s file online price to downloading their software first. In either case, your tax return is digitally sent to the IRS and your state’s tax agency.

While you might think filing online is always cheaper, H&R Block software downloads might be the cheaper option. If you have a computer and time to download, it’s worth price shopping.

Is Free Online Tax Filing Legit?

I might be dating myself here, but free tax filing online is still relatively new. As a cash-strapped college student, I would scour the web looking for free tax prep software. If you didn’t click the correct link on just the right page you had to pay to file your “free” return. But, you didn’t find out until after you entered all your information. So, you either paid the prep fee or re-entered all the information with a different tax prep program.

While these programs accurately calculated my tax refund, the experience wasn’t always pleasant. The websites were clunky and sometimes hard to navigate.

That’s not the case when you file taxes for free today. You can easily file with your phone, tablet, or computer. And, you no longer have to hand-enter all your information by hand.

What’s the Best H&R Block Plan For You

H&R Block offers four core products. The summary below helps you quickly see which option your tax situation lands in.

Free

  • W-2 and dividend income only
  • Not itemizing
  • Didn’t sell any investments

Deluxe

  • W-2 and dividend income only
  • Can itemize
  • Didn’t sell any investments

Premium

  • W-2, dividend, or basic freelancer (Form 1099) income
  • May or may not itemize
  • Sold investments
  • Own rental property

Self-Employed

  • Self-employment income
  • Advanced business deductions including ridesharing expenses

Don’t forget that you can also get a second glance from a tax expert with either Tax Pro Review or Tax Pro Go. Either of these add-ons can provide more peace of mind. And, they can still be cheaper than visiting your local tax preparer.

Can you file for free? What H&R Block tax prep tool excites you the most.

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