Monday, November 21, 2016

Product review: H&R Block Tax Software Deluxe + State 2016 Win

I have been using H&R Block tax software for many years. I keep using it because it does what I need it has always been cheaper than TurboTax. I have been buying the Deluxe version of H&R Block because it covers the mutual funds sales, cost basis calculations are included (Schedule D), the form for Foreign Tax Credit from mutual funds is present (Form 1116), as well as stock sales. To get this functionality in TurboTax you need to buy the Premium version of the software.

I always do my preliminary tax prep at the end of year before the final version is ready, and have not had any any issues other than not having the final version of the software. This year's software seem to have a few more glitches.

(1) Some information on the screen is rendered in a very small font and is hard to read, however most of text is okay.
(2) Initially I had issues importing previous year tax data, but I was able to resolve this problem after I saved this year's empty return and then used a menu choice "File - Import Last Year's Tax Data".
(3) I found it confusing that on the first page after install it had two references to activation codes. Each reference used a different terminology. The first activation code was to unlock the H&R Block software, the second activation code was to unlock 5 free filing. It was not clear to be if this was redundant information using different terminology or if I will actually need this information later when I am ready to file. I saved a screen shot in case I ever need this information but since I am not ready to file I will not known the answer until a few months down the road.

* If you are using a digital download you will need an activation code to install the software. The activation code can be located in several ways.
Option 1: The activation code is included in the message I received from Amazon with the subject line 'Your order of "H&R Block Tax software"'
Option 2: You can locate activation code in your Amazon account:
1) Log into Amazon
2) Select 'Your account' and scroll to the section called 'Digital Content'
3) Select 'Your Games and Software downloads'
4) Then under H&R software entry you will see activation code listed under H&R Block title

* If you have a virus scanner it will generate an alert the first time you run the program, change the permission to "Permit Always" otherwise the program will be blocked.

* Does H&R allow to install the software on two PCs?
No. The license agreement that one needs to accept during the install says this:
"At no time you cab have the Software installed on more than one computer. You may copy the Software for backup and archival purposes only."

I purchased H&R Block Deluxe plus State. This version entitles me to 5 free federal e-files. I do tax returns for an elderly relative so I use a couple of them. Note that there is no limit on how many returns can be printed on paper, so you can print and mail more than 5 return if desired.

The rights to install one state software is included in the package but the package does NOT include free e-file for the state return (see exceptions below). If you want to e-file your state return you will need to pay a fee of $19.95 to e-file each state return. Alternatively, you can print all the forms and mail them using US post office without any additional fees. If you need to file taxes for more then one state, then you need to purchase additional states. Each additional state is $39.95 plus $19.95 e-file fee.

Note 1: NY state residents can e-file state returns for free if they meet income level qualifications
Note 2: It is not possible to e-file a state return for New Hampshire, the NH returns have to be mailed.

* The state forms are not available as of 11/20/2016 as I write this review. H&R web site says they will become available in January. To see the latest status you can go to H&R website, click on "Download software", and select "State Editions". Currently it says "Coming soon in January 2017". When the state forms became available the state software can be downloaded directly from the H&R Block software installed on your PC.

Here are my other observation after finishing my preliminary return. Note: the forms are not final until January of 2017. Overall it worked as expected, my comments are on low lights and high lights of my experience.

* H&R Block starts the interview process with an annoying up-sell pitch, recommending an upgrade from Deluxe to Premium even when it is not necessary. In my opinion, they should have determined if the person would truly benefit from the Premium version first. That would have been useful. As it stands now it is just annoying.

What is the difference between Premium and Deluxe? The Premium version offers advanced tools for self-employed and rental property owners: cost basis of home sales, dividends, gifts, and inheritance assets. It has advanced schedule C guidance to maximize deductions for self-employment income. And finally it has guidance for rental property income and expenses. The rest of the Premium package is the same as Deluxe.

Note that the Deluxe package has support for self-employed income as well as stock sale cost basis calculations.

* I do not like that the Help is not context sensitive. For example, they requested my mobile phone number this year. Next to this request there is a link "How is this information used." I clicked on it and it just put me into the top index of H&R help. I was not able to find a relevant help segment. Maybe I did not think of the right keywords. The help should have put on the specific text in help that explained how the mobile number would be used. This is typical, none of the Help is context sensitive and I rarely find anything useful there. If I need help I search the internet and I find better answers to my questions.

* H&R Block provided me some guidance for completing Form 1116 (foreign tax credit, for example foreign tax paid by a mutual fund). However, I needed to keep switching between the whole-form view to enter data and then back to interview to read the instructions. Even though the form where you can enter data is visible at the same time as instructions you cannot enter data into it until you switch into whole-form view. This is cumbersome, but at least there is some guidance for this form.

* I like DeductionPro which helps suggests reasonable prices based on condition of the donated used clothing items. It is nice not to have to come up with what is reasonable on my own.

* At the end of the interview process there is a check step (which you can run at any time, but the interview ends with this check). This step flags problems (e.g. missing information) and potential audit alerts (e.g. unusual deductions), and reminders (e.g. things you marked tentative). I find this check step very helpful.

* The final tax return can be saved in a .PDF format for future reference. I always do that so I can re-print an old return without having to run an old copy of H&R Block (especially down the road when a new computer may not even have an old H&R Block installed).

* H&R Block can print forms when Ethernet connection is disconnected. In 2014 TurboTax's introduced a requirement that the data had to be sent to Intuit's servers to be formatted for printing. H&R Block does not have this requirement.

* Does H&R has the ability to import TurboTax data from previous years?
Yes. TurboTax files have a .tax extension. Use the Browse button within H&R Block application to navigate to the folder you need and it will import the data from TT return.

* If you owe taxes there are three options for payment: electronic withdrawal from your bank, mailing a check and paying by credit card from a secure web site. Is there a charge to pay by credit card? Yes. There are three web sites that do this service and the fees vary from the lowest of $2.50 flat fee for a debit card to highest of 2.25% fee by credit card from one of the web sites. If you search for "pay taxes by credit or debit" you will see the detailed fee schedule on the web site.

PRICE considerations
The price on this package changes often and you can catch some great discounts. I use a nice tool that shows history of Amazon prices. If you enter "Amazon price history alert" in Google it will come up at the top, my favorite has the word "camel" (repeated 3 times) in the name. You can set up the tool to send you an alert when you desired price drop is reached. During the last tax year season the price fluctuated between $20 and the list price of $44.99, dipping below $30 a number of times. It also qualifies for digital credits for No-rush Prime shipping (but it appears that if you use the digital no-rush credits even for a portion of the full price Amazon removes the Verified purchase stamp treating them as Gift Certificates).

Also note that Amazon adds the State sales tax to the final price of H&R Block (in states where it has physical presences such as Massachusetts).

I am a little less happy with this version of H&R Block than in prior years, but overall no major road blocks. I will update this review if I find new issues or new kudos. If you have a question I have not covered leave a comment and I will do my best to answer it.

You can find it on Amazon by following this link.

Ali Julia review ★★★★☆

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