Review of US tax return software

[GiantSaver]

Summary: For tax year 2024 I tried TurboTax Deluxe (download), H&R Block Deluxe (download), FreeTaxUSA, and OLT.
I recommend TurboTax.
I don't recommend FreeTaxUSA or H&R Block if you are claiming foreign tax credit (form 1116).
I don't recommend H&R Block if you pay Net Investment Income Tax (form 8960) and you reach the SALT deduction limit.

H&R Block
I have been using TurboTax Deluxe for several years. I tried H&R Block Deluxe this year. While claiming foreign tax credit, the foreign source income needs to be adjusted. Instead of calculating this, H&R Block says "You might need to adjust this amount if it includes foreign capital gains or qualified dividends. To learn more, see the Form 1116 instructions, under Foreign Qualified Dividends and Capital Gains (Losses)." It wants me to figure it out myself, which I did, but I didn't buy the software for that!

Next, I found that H&R Block makes an unfavorable calculation for Net Investment Income Tax (form 8960). For investment expenses allocable to investment income, which is the deduction for NIIT, H&R Block calculates line 9b using:

Code: Select all

min(SALT limit, state_income_taxes) * investment_income / AGI

whereas TurboTax calculates:

Code: Select all

min(SALT limit, state_income_taxes * investment_income / AGI)

TurboTax's calculation will result in a higher deduction if you exceed the SALT deduction limit, while still respecting the limit. The instructions for form 8960 does not seem to specify how the SALT deduction limit should be handled for this form, simply saying that "any reasonable method" may be used. TurboTax calculates a higher deduction and hence lower Net Investment Income Tax.

TurboTax also has a much better user interface than H&R Block.


OLT
I tried OLT and found its organization of tax areas confusing. The wording of its instructions is also terse and confusing. I wasn't confident that I would use it correctly and abandoned it quickly.


FreeTaxUSA
FreeTaxUSA has a nice UI and its customer support was good. But they had several inaccuracies in form 1116 for foreign tax credit. It seems like they have added this form to their software without thoroughly reading the IRS instructions. These errors cause FreeTaxUSA to incorrectly limit my foreign tax credit resulting in an incorrect higher tax. Like H&R Block, it too does not calculate the adjustment for foreign source income. But, it at least directly gives the formula for the adjustment instead of referring to the instructions. Now to the inaccuracies.

For line 3a (deductions), the IRS instruction states to include "State and local personal property taxes" among other deductions. FreeTaxUSA missed this one. Customer support confirmed this mistake within 2 days of my reporting, fixed the issue in about a week, and sent me a gift card.

After the fix their line 3a was still wrong. The IRS instructions caution "The deduction for state and local taxes on Schedule A (Form 1040), lines 5a through 5c, is generally limited to $10,000 ($5,000 if married filing separately). Don't include more than this amount of state and local taxes on Form 1116, lines 2 and 3a." My line 3a was much higher than this limit that the IRS says this line cannot exceed. This is a very obvious error. Customer support has confirmed this error too, fixed it within a week and has said that they will send a gift card.

Two errors down, but their form 1116 is still wrong. On line 18, the form itself (not the instructions) cautions “If you figured your tax using the lower rates on qualified dividends or capital gains, see instructions.” They completely ignored this caution. This requires using the Worldwide Qualified Dividends and Capital Gains worksheet from the IRS instructions.

While their support is very responsive, I don't have confidence in their software. What other errors remain in their software that did not affect my return this year, but could affect yours or affect mine in another year. I, a non-professional consumer tax preparer, should not be the sole tester of their tax calculations. It is clear that they have not read the instructions or even the cautionary notes on the form. Since I discovered these errors by doing my taxes in TurboTax, I am now back to TurboTax. It seems to be the most solid of all.

[tixoboy]

Thank you for taking one for the team and taking the time to do your taxes so many times!

Having run into slow performance using Turbotax Premier (download) on Mac because of their non-native x86 implementation, I was debating whether to spend the tens of hours repeating my taxes with different software. After reading your review, I know I can definitely pass given the foreign tax credit and NIIT handling.

[cacophony]

...
Two errors down, but their form 1116 is still wrong. On line 18, the form itself (not the instructions) cautions “If you figured your tax using the lower rates on qualified dividends or capital gains, see instructions.” They completely ignored this caution. This requires using the Worldwide Qualified Dividends and Capital Gains worksheet from the IRS instructions.
...

FreeTaxUSA correctly used the Worldwide Qualified Dividends and Capital Gains worksheet to calculate line 18 of form 1116 for my 2024 return. They also included the populated worksheet in the "Federal Tax Worksheets" pdf.

In my case FreeTaxUSA has achieved the correct result with form 1116 the last four years, though I do need to manually calculate the adjustment.

[b4nash]

Thanks for this! My taxes are fairly straightforward so I always use TurboTax + a free option (up until filing) to make sure the numbers match. I usually end up with Cash App Taxes for free federal and state filing. I decline all optional data sharing with TurboTax and Cash App Taxes. Hopefully Direct File will continue to expand and I can use it one day instead.

[Parkinglotracer]

I used turbo tax desk top this year on my 2 year old MacBook Air. The software was unpredictable and crashed a few times making me uneasy that it was going to work. I have used turbo tax on line for many years and I have not experienced that problem before. All and all turbo tax desk top worked for my moderately complex tax return but I will likely go back to using the online version next year.

[Stinky]

Summary: For tax year 2024 I tried TurboTax Deluxe (download), H&R Block Deluxe (download), FreeTaxUSA, and OLT.
I recommend TurboTax.
I don't recommend FreeTaxUSA or H&R Block if you are claiming foreign tax credit (form 1116).
I don't recommend H&R Block if you pay Net Investment Income Tax (form 8960) and you reach the SALT deduction limit......

[snip]

......I am now back to TurboTax. It seems to be the most solid of all.

Thank you for doing all of this testing, and sharing the results with your fellow Bogleheads.

[Ervin]

I was an HR Block fan for years, until one year I had a lot of 1099-B's from Fidelity, and HRB couldn't import them properly. TT did it without a hitch, and has become my go-to tax software (the Mac desktop version). For me, it's been rock stable.

I think the two are not far from each other, and one should use the software one knows best, and works best for one. I am the kind of guy who always reads the forms and worksheets the software generates, to see if there isn't a mistake in the data or the calculations, so either of them will do. I keep switching between the step-by-step questions and the forms, to see if I'm not missing something. For example, the question for deducting the interest from government bonds, from the income taxable by my state, is an easily missed checkbox in the federal questionnaire (super-annoying - I think HRB has the same "bug"). I missed it the first two years, and had to amend my state returns to claim the deduction.

I am convinced that TT has a bug when calculating the gross income for foreign tax credit purposes (form 1116). It was reported at least 4 years on the TT forums, by others, still not fixed. The effect on my return is too small to bother.

[wa1fju]

I am getting less and less enamored with these tax preparation software packages. I had problems with TaxCut last year and problems with TurboTax this year.

My return is about as simple as it gets: a W-2, a bunch of 1099's, standard deduction. Just add it all up and pay the tax. I could probably prepare the entire return in less than 30 minutes. So I am basically using the tax software as a glorified adding machine with the ability to e-file. And the only reason I e-file (I used to print out the return and mail it to the IRS) is that in 2019, the IRS "lost" my return. This caused my 2021 Medicare IRMAA to be based upon my 2018 return which had much more income. This cost me about $3,000 in IRMAA premiums until I finally got my congressman and the IRS Tax Advocate to straighten it all out. No more mailed returns for me after that!

Since e-file is my principal use for the tax software, I would rather use the IRS Direct File or Free Fillable Forms. But I have too much income for the former and the latter does not yet support all my 1099's.

I wonder how much it would cost if I walked into an accountant's office with my fully prepared and printed return and said, "type this into your system and e-file it for me."

[plmd]

I’ve been using TurboTax desktop for the past 10+ years. I find the forms mode very useful. However, I couldn’t use TT last year, because it didn’t support NY IT-657 to claim a credit related to COVID, so I attempted to use FreeTaxUSA, which did support that form. But then FreeTaxUSA didn’t support Form 7203 to report shareholder basis for an S-corp. I ended up trying OLT, which actually supported both forms, so I used that to file.

However, OLT is confusing at times, so I’m back to using TurboTax desktop this year.

[bling]

to offer a counterpoint, i tried turbotax 2-3 years back and i wasn't impressed. for me i felt it held my hand *too much*.

i've been using FTUSA for years with no complaints. the only annoying thing for me here is that because i live and work in different states there's one thing i need to manually adjust every year.

this year, i decided to give try a OLT. for me, i think it did better than FTUSA overall that i'm going to switch. for one, it correctly calculated my double state adjustment that i have to manually do in FTUSA.

a common complaint of OLT is that it's not user friendly. i think this is both its biggest strength and weakness. i've found that it doesn't steer too far away from the original IRS/state forms. in one example, the state form said "check [ ] here if you do not want to...". in OLT, this became "if you do not want to...": yes/no. this was confusing to me, because English you would say "no, i do not want to...", but if you select 'no' on the questionnaire it would be wrong.

so how did i figure out what i was doing is right/wrong? OLT's super power is that it will generate every single form, both federal and state, before you file. you can double-check everything.

i've tried taxact/turbotax/ftusa before, and none of them showed you the state forms. you have to trust they did it correctly but there's no easy way for you to verify.

[JazzTime]

Summary: For tax year 2024 I tried TurboTax Deluxe (download), H&R Block Deluxe (download), FreeTaxUSA, and OLT.
I recommend TurboTax.
I don't recommend FreeTaxUSA or H&R Block if you are claiming foreign tax credit (form 1116).
I don't recommend H&R Block if you pay Net Investment Income Tax (form 8960) and you reach the SALT deduction limit.

Thanks for the comparison.
I've only used TT for many years so can't comment on the other programs. I always recommend using desktop vs online.

Since you mention form 1116 foreign tax credit, I don't think TT handles it all that well and there is a long discussion in the TT Community about this. If you have more than one foreign tax paid, TT will simply not prepare two columns as required to separate the payments. I don't exactly remember the proposed work around, but I believe they suggest creating a phantom 1099 for the second foreign payer. I simply gave up trying to do it correctly and simply enter either RIC or Various and lump together my two foreign taxes. I figure I'll let the IRS question it if they want. The amounts are too small to worry about and lumping together doesn't change my huge tax bill vs separating them. Once entered, I have no idea if TT calculates the credit correctly - not worth spending my time trying to figure it out.

[pshonore]

to offer a counterpoint, i tried turbotax 2-3 years back and i wasn't impressed. for me i felt it held my hand *too much*.

Have you tried working in Form mode vs Interview mode? Not much hand holding in Form mode

[JazzTime]

to offer a counterpoint, i tried turbotax 2-3 years back and i wasn't impressed. for me i felt it held my hand *too much*.

Have you tried working in Form mode vs Interview mode? Not much hand holding in Form mode

Also, did bling use desktop or online? Desktop allows you to "Select what I want to work on." So you can skip past unnecessary interview questions.

[bling]

to offer a counterpoint, i tried turbotax 2-3 years back and i wasn't impressed. for me i felt it held my hand *too much*.

Have you tried working in Form mode vs Interview mode? Not much hand holding in Form mode

hmm...i didn't recall that option being available.

Have you tried working in Form mode vs Interview mode? Not much hand holding in Form mode

Also, did bling use desktop or online? Desktop allows you to "Select what I want to work on." So you can skip past unnecessary interview questions.

this is probably why i couldn't find one. i used the online version.

[UpperNwGuy]

I used turbo tax desk top this year on my 2 year old MacBook Air. The software was unpredictable and crashed a few times making me uneasy that it was going to work. I have used turbo tax on line for many years and I have not experienced that problem before. All and all turbo tax desk top worked for my moderately complex tax return but I will likely go back to using the online version next year.

I stopped using the download version quite a few years ago. The online version has worked fine for me.

[Parkinglotracer]

I used turbo tax desk top this year on my 2 year old MacBook Air. The software was unpredictable and crashed a few times making me uneasy that it was going to work. I have used turbo tax on line for many years and I have not experienced that problem before. All and all turbo tax desk top worked for my moderately complex tax return but I will likely go back to using the online version next year.

I stopped using the download version quite a few years ago. The online version has worked fine for me.

Lots of bogleheads convinced me the desk top version had more features and was better. I will re examine that before next year!

[beyou]

I stopped using the download version quite a few years ago. The online version has worked fine for me.

Lots of bogleheads convinced me the desk top version had more features and was better. I will re examine that before next year!

I have used both over the last few years.
There are 2 main reasons people recommend the desktop version.

1) Forms mode only exists in desktop. I personally didn't find forms mode critical, more of a nice-to-have.

2) Perceived security. People think keeping the data on their desktop is more secure than on the TT servers.
I file electronically so most of my data is transmitted to Intuit servers anyway, no matter what version I use.
I decided to trust intuit rather than print/mail paper returns. I do NOT trust the US Mail, they lose and delay things all the time.

3) Multiple returns. If you file for family members then you can save $ paying once for desktop rather than multiple times for online.

Overall I was happy with online and happy with desktop, I can use either.
I have recently used desktop for a couple years, after many years of online, and before that desktop.
Easy to switch from one to the other, I have done it in both directions.

[Parkinglotracer]

Lots of bogleheads convinced me the desk top version had more features and was better. I will re examine that before next year!

I have used both over the last few years.
There are 2 main reasons people recommend the desktop version.

1) Forms mode only exists in desktop. I personally didn't find forms mode critical, more of a nice-to-have.

2) Perceived security. People think keeping the data on their desktop is more secure than on the TT servers.
I file electronically so most of my data is transmitted to Intuit servers anyway, no matter what version I use.
I decided to trust intuit rather than print/mail paper returns. I do NOT trust the US Mail, they lose and delay things all the time.

3) Multiple returns. If you file for family members then you can save $ paying once for desktop rather than multiple times for online.

Overall I was happy with online and happy with desktop, I can use either.
I have recently used desktop for a couple years, after many years of online, and before that desktop.
Easy to switch from one to the other, I have done it in both directions.

Well said . Thank you

[JazzTime]

Lots of bogleheads convinced me the desk top version had more features and was better. I will re examine that before next year!

I have used both over the last few years.
There are 2 main reasons people recommend the desktop version.

1) Forms mode only exists in desktop. I personally didn't find forms mode critical, more of a nice-to-have.

2) Perceived security. People think keeping the data on their desktop is more secure than on the TT servers.
I file electronically so most of my data is transmitted to Intuit servers anyway, no matter what version I use.
I decided to trust intuit rather than print/mail paper returns. I do NOT trust the US Mail, they lose and delay things all the time.

3) Multiple returns. If you file for family members then you can save $ paying once for desktop rather than multiple times for online.

Overall I was happy with online and happy with desktop, I can use either.
I have recently used desktop for a couple years, after many years of online, and before that desktop.
Easy to switch from one to the other, I have done it in both directions.

4. Desktop has the "What If" form, which allows you to see how changing the numbers in different categories - e.g., Roth conversion, more/less cap gains, etc. - affects your taxes. Also, allows you to estimate next year's taxes, which is useful for determining estimated payments.

[beyou]

I have used both over the last few years.
There are 2 main reasons people recommend the desktop version.

1) Forms mode only exists in desktop. I personally didn't find forms mode critical, more of a nice-to-have.

2) Perceived security. People think keeping the data on their desktop is more secure than on the TT servers.
I file electronically so most of my data is transmitted to Intuit servers anyway, no matter what version I use.
I decided to trust intuit rather than print/mail paper returns. I do NOT trust the US Mail, they lose and delay things all the time.

3) Multiple returns. If you file for family members then you can save $ paying once for desktop rather than multiple times for online.

Overall I was happy with online and happy with desktop, I can use either.
I have recently used desktop for a couple years, after many years of online, and before that desktop.
Easy to switch from one to the other, I have done it in both directions.

4. Desktop has the "What If" form, which allows you to see how changing the numbers in different categories - e.g., Roth conversion, more/less cap gains, etc. - affects your taxes. Also, allows you to estimate next year's taxes, which is useful for determining estimated payments.

I use a home grown excel tax calculation for estimated taxes.
This serves as a check on my use of the tax software, another independent source.

[dodecahedron]

Lots of bogleheads convinced me the desk top version had more features and was better. I will re examine that before next year!

I have used both over the last few years.
There are 2 main reasons people recommend the desktop version.

1) Forms mode only exists in desktop. I personally didn't find forms mode critical, more of a nice-to-have.

2) Perceived security. People think keeping the data on their desktop is more secure than on the TT servers.
I file electronically so most of my data is transmitted to Intuit servers anyway, no matter what version I use.
I decided to trust intuit rather than print/mail paper returns. I do NOT trust the US Mail, they lose and delay things all the time.

3) Multiple returns. If you file for family members then you can save $ paying once for desktop rather than multiple times for online.

Overall I was happy with online and happy with desktop, I can use either.
I have recently used desktop for a couple years, after many years of online, and before that desktop.
Easy to switch from one to the other, I have done it in both directions.

Another big unmentioned advantage of desktop v online is that with desktop you can opportunistically lock in a bargain price at time of initial purchase, before you do any work.

Online pricing with most vendor’s products means you can start for free, put in a lot of work, and not know the actual price until you are ready to pull the trigger and do the actual efiling. Efiling prices tend to increase during peak e-filing periods (e.g., especially early April), by which time you have committed so much work to the online version that you will hardly want to switch.

Only exception to the above that I know of is FreeTaxUSA, with a clearly disclosed very simple price: free for Federal e-file, $14.99 if you also want them to do your state efile. So you can know from the start with FreeTaxUSA what you will actually pay at the end, which is not true with online versions of other major vendors (TurboTax, Block, etc.)

If you are going to go with TT, Block, etc., the download version at least allows you to lock in the price upfront.

[Van]

I did my federal return this year on TurboTax, FreeTaxUSA and TaxAct. I started H&R Block but quit halfway through because I found the data entry to be confusing and cumbersome. Maybe that is just me since it was my first time trying H&R Block.
Of the 3, I decided to e-file with TaxAct. Although my return is fairly complex, interestingly, all 3 gave the same bottom line number to-the-dollar. TaxAct was less than 1/3 the price of TT.
None of the 3 do PA state correctly. PA has some pretty peculiar rules. I always end up doing it on the PA DOR site.

[cacophony]

...
so how did i figure out what i was doing is right/wrong? OLT's super power is that it will generate every single form, both federal and state, before you file. you can double-check everything.

i've tried taxact/turbotax/ftusa before, and none of them showed you the state forms. you have to trust they did it correctly but there's no easy way for you to verify.

FTUSA shows all the populated state forms, but only after you've paid the $15.

[beyou]

I have used both over the last few years.
There are 2 main reasons people recommend the desktop version.

1) Forms mode only exists in desktop. I personally didn't find forms mode critical, more of a nice-to-have.

2) Perceived security. People think keeping the data on their desktop is more secure than on the TT servers.
I file electronically so most of my data is transmitted to Intuit servers anyway, no matter what version I use.
I decided to trust intuit rather than print/mail paper returns. I do NOT trust the US Mail, they lose and delay things all the time.

3) Multiple returns. If you file for family members then you can save $ paying once for desktop rather than multiple times for online.

Overall I was happy with online and happy with desktop, I can use either.
I have recently used desktop for a couple years, after many years of online, and before that desktop.
Easy to switch from one to the other, I have done it in both directions.

Another big unmentioned advantage of desktop v online is that with desktop you can opportunistically lock in a bargain price at time of initial purchase, before you do any work.

Online pricing with most vendor’s products means you can start for free, put in a lot of work, and not know the actual price until you are ready to pull the trigger and do the actual efiling. Efiling prices tend to increase during peak e-filing periods (e.g., especially early April), by which time you have committed so much work to the online version that you will hardly want to switch.

Only exception to the above that I know of is FreeTaxUSA, with a clearly disclosed very simple price: free for Federal e-file, $14.99 if you also want them to do your state efile. So you can know from the start with FreeTaxUSA what you will actually pay at the end, which is not true with online versions of other major vendors (TurboTax, Block, etc.)

If you are going to go with TT, Block, etc., the download version at least allows you to lock in the price upfront.

You can jump ahead and pay at the very start in TT online.

[GiantSaver]

FreeTaxUSA correctly used the Worldwide Qualified Dividends and Capital Gains worksheet to calculate line 18 of form 1116 for my 2024 return. They also included the populated worksheet in the "Federal Tax Worksheets" pdf.

In my case FreeTaxUSA has achieved the correct result with form 1116 the last four years, though I do need to manually calculate the adjustment.

All the problems I reported with FreeTaxUSA were confirmed by their support. Here are their responses.

For incorrect line 18:

Unfortunately, our software doesn't support your specific tax situation.
While we support form 1116, we do not support the calculations on line 18 for individuals who must complete the Qualified Dividends and Capital Gains tax worksheet.
In this case, our software is not set up to support this situation. I am very sorry for any inconvenience.
If you need to report the accurate amount on line 18 using the [Worldwide] Qualified Dividend and Capital Gains worksheet you may need to find another software.

For line 3a missing the State and local personal property taxes:

We appreciate your thorough description of the issue! I've confirmed with our developers that Schedule A line 5c (personal property tax) doesn't seem to be flowing as it should to be included with Form 1116 line 3a.

We are working on fixing this in the software. You should be able to log in next week (2/20) to see the return generated as it should.

For line 3a exceeding the SALT limit:

You are correct, and we are working to fix this in our software. We are hoping to have the fix ready by the end of this week (2/28).

May be it worked for your specific tax situation, but when it silently produces incorrect results due to several errors, I cannot recommend it.

[Sprucebark]

TT online wanted $159 to file the federal tax. I think I was up charged. I bought the desktop version at Costco and I was able to import my existing cloud work so I didn’t have to re enter anything. It was a breeze.

I did another return and TT desktop has a self employed home office bug. I found a couple threads on it and TT refuses to admit it is a bug or error. You can override but then it won’t allow an efile. Super annoying. I found some comments where to can go into one of the supporting schedules and change a percent of the year the home office is used from blank to 100% and then it will work. Otherwise it says your business income is negative (when it isn’t) so home office deduction isn’t allowed.

[Pepe.Silvia]

Does any of the other software calculate Form 8960 the way Turbotax does?

[cacophony]

FreeTaxUSA correctly used the Worldwide Qualified Dividends and Capital Gains worksheet to calculate line 18 of form 1116 for my 2024 return. They also included the populated worksheet in the "Federal Tax Worksheets" pdf.

In my case FreeTaxUSA has achieved the correct result with form 1116 the last four years, though I do need to manually calculate the adjustment.

All the problems I reported with FreeTaxUSA were confirmed by their support. Here are their responses.

For incorrect line 18:

Unfortunately, our software doesn't support your specific tax situation.
While we support form 1116, we do not support the calculations on line 18 for individuals who must complete the Qualified Dividends and Capital Gains tax worksheet.
In this case, our software is not set up to support this situation. I am very sorry for any inconvenience.
If you need to report the accurate amount on line 18 using the [Worldwide] Qualified Dividend and Capital Gains worksheet you may need to find another software.

For line 3a missing the State and local personal property taxes:

We appreciate your thorough description of the issue! I've confirmed with our developers that Schedule A line 5c (personal property tax) doesn't seem to be flowing as it should to be included with Form 1116 line 3a.

We are working on fixing this in the software. You should be able to log in next week (2/20) to see the return generated as it should.

For line 3a exceeding the SALT limit:

You are correct, and we are working to fix this in our software. We are hoping to have the fix ready by the end of this week (2/28).

May be it worked for your specific tax situation, but when it silently produces incorrect results due to several errors, I cannot recommend it.

Support for the line 18 calculation via "Worldwide Qualified Dividends and Capital Gains" was just added for 2024, so it's possible that the support did not know that and the response was based on old support guidance.

Many Bogleheads use FTUSA with from 1116 without issue. It's too bad you had problems with your particular situation, but I'm glad TurboTax worked better for you. TurboTax has plenty of issues as well, but maybe it's better for your particular circumstances.

[grabiner]

to offer a counterpoint, i tried turbotax 2-3 years back and i wasn't impressed. for me i felt it held my hand *too much*.

Have you tried working in Form mode vs Interview mode? Not much hand holding in Form mode

And you need forms mode in TurboTax to get Form 1116 right.

It is possible to get the deduction for half of self-employment tax handled correctly in the interview, but the interview questions won't lead you there.

And for state income tax, there is an option in forms mode to do the right thing, which the interview won't handle at all. By default, TurboTax allocates your entire state income tax against US income, which is usually wrong. In forms mode, you can enter what percentage of state income tax was imposed on the foreign income, which will give the correct number if there is only one state. (You still have to calculate that percentage yourself, using a somewhat-illogical formula.)

[dodecahedron]

Another big unmentioned advantage of desktop v online is that with desktop you can opportunistically lock in a bargain price at time of initial purchase, before you do any work.

Online pricing with most vendor’s products means you can start for free, put in a lot of work, and not know the actual price until you are ready to pull the trigger and do the actual efiling. Efiling prices tend to increase during peak e-filing periods (e.g., especially early April), by which time you have committed so much work to the online version that you will hardly want to switch.

Only exception to the above that I know of is FreeTaxUSA, with a clearly disclosed very simple price: free for Federal e-file, $14.99 if you also want them to do your state efile. So you can know from the start with FreeTaxUSA what you will actually pay at the end, which is not true with online versions of other major vendors (TurboTax, Block, etc.)

If you are going to go with TT, Block, etc., the download version at least allows you to lock in the price upfront.

You can jump ahead and pay at the very start in TT online.

Interesting--I had not realized this was an option. I wonder how many people pay upfront.

[beyou]

You can jump ahead and pay at the very start in TT online.

Interesting--I had not realized this was an option. I wonder how many people pay upfront.

Those of us who used TT for decades are used to pre-paying for desktop software. So when I switched to online, I realized immediately if I wanted to lock in the price early as I had done with download version, need to commit asap. Seems foolish to not pay ahead, why do all that work and later find they can charge whatever they want once they have you.

I am pretty happy with TT so I am not shopping and using multiple tools each year. In recent past I called for support and they were helpful and turned out their software did better than IRS could do. IRS asserted an error in my return, TT and I had it right and we proved it ! New instruction that year, TT made the change and IRS software did not !

[dodecahedron]

Interesting--I had not realized this was an option. I wonder how many people pay upfront.

Those of us who used TT for decades are used to pre-paying for desktop software. So when I switched to online, I realized immediately if I wanted to lock in the price early as I had done with download version, need to commit asap. Seems foolish to not pay ahead, why do all that work and later find they can charge whatever they want once they have you.

This has me wondering how the prices you manage to lock in on the online version compare to the deals that ardent desktop bargain shoppers (like me) get?

I assume there’s no equivalent for the online versions to camelcamelcamel (which can easily be used to monitor the Amazon prices for the download versions of TT and Block software) or Boglehead forum threads like this one for download version of TT or this one for the download version of Block, which bargain hunters can subscribe to in order to be alerted to ephemeral price dips.

For the past ten years, I have managed to lock in a price of under $30 for Block Deluxe Fed + State, and in fact generally well under $30, sometimes under $20 thanks to camelcamelcamel and/or the BH forum thread on Block. I think that my lowest ever price for Block Deluxe Fed + State was something like $15. (I used to get the download version of TT free as a Vanguard Flagship perk before that, but abandoned TT in 2014 when it had a stubborn obscure/arcane but important to me bug that I didn’t want to spend time dealing with customer support on.)

[grok87]

Interesting--I had not realized this was an option. I wonder how many people pay upfront.

Those of us who used TT for decades are used to pre-paying for desktop software. So when I switched to online, I realized immediately if I wanted to lock in the price early as I had done with download version, need to commit asap. Seems foolish to not pay ahead, why do all that work and later find they can charge whatever they want once they have you.

I am pretty happy with TT so I am not shopping and using multiple tools each year. In recent past I called for support and they were helpful and turned out their software did better than IRS could do. IRS asserted an error in my return, TT and I had it right and we proved it ! New instruction that year, TT made the change and IRS software did not !

if you don't mind sharing, what was the "error"?

[beyou]

Those of us who used TT for decades are used to pre-paying for desktop software. So when I switched to online, I realized immediately if I wanted to lock in the price early as I had done with download version, need to commit asap. Seems foolish to not pay ahead, why do all that work and later find they can charge whatever they want once they have you.

This has me wondering how the prices you manage to lock in on the online version compare to the deals that ardent desktop bargain shoppers (like me) get?

I assume there’s no equivalent for the online versions to camelcamelcamel (which can easily be used to monitor the Amazon prices for the download versions of TT and Block software) or Boglehead forum threads like this one for download version of TT or this one for the download version of Block, which bargain hunters can subscribe to in order to be alerted to ephemeral price dips.

For the past ten years, I have managed to lock in a price of under $30 for Block Deluxe Fed + State, and in fact generally well under $30, sometimes under $20 thanks to camelcamelcamel and/or the BH forum thread on Block. I think that my lowest ever price for Block Deluxe Fed + State was something like $15. (I used to get the download version of TT free as a Vanguard Flagship perk before that, but abandoned TT in 2014 when it had a stubborn obscure/arcane but important to me bug that I didn’t want to spend time dealing with customer support on.)

I don't shop around for tax software. For those with very simple returns, and living in zero income tax states, maybe the cheapest solution is the best solution. But I have modest complexity in. my federal and a state that can be complex and high tax. I want my taxes done correctly more than I care about saving $10 or 20 on software. I dont' care what H&R Block Costs, nor freetaxusa, I have been using TurboTax for decades, online some years and desktop other years more due to technical issues and/or wanting the forms mode and ability to file more than one federal return for family. If I want desktop, I buy early and get some discount. If I want online, I commit early to get whatever discount vs the "surprise you have already entered all your data" price. Sometimes I find my credit cards willing to give cash back for using TT, so I would use them, why not ? But those same cc have deals for other tax software and I ignore them until TT gives me a reason to look elsewhere.

[beyou]

Those of us who used TT for decades are used to pre-paying for desktop software. So when I switched to online, I realized immediately if I wanted to lock in the price early as I had done with download version, need to commit asap. Seems foolish to not pay ahead, why do all that work and later find they can charge whatever they want once they have you.

I am pretty happy with TT so I am not shopping and using multiple tools each year. In recent past I called for support and they were helpful and turned out their software did better than IRS could do. IRS asserted an error in my return, TT and I had it right and we proved it ! New instruction that year, TT made the change and IRS software did not !

if you don't mind sharing, what was the "error"?

Discussed at length in another thread back in 2023, which I updated when resolved with IRS in 2024.

viewtopic.php?t=403460&hilit=IRS+error&start=50

Summary best found at Thu May 04, 2023 12:25 pm

Had to do with change in instructions on Form 8960 Net Investment Income between 2021 and 2022.
IRS did NOT make software changes to handle the change in instructions but TT did make the change.
There was no change in my input of data, just how it was used on the IRS form.
Maybe all the tax prep programs made the change, IDK, but TT did it.
Turns out TT had it right before and after the instructions change, and equally important, they tried to help me on the phone with quite a bit of effort for what turned out to be the IRS's fault. I actually figured out what happened while on hold and informed the agent they can stop wasting their time, they wont find a bug because TT is correct. Good enough reason to stick with TT, they didn't give up until I told them they could.

Per others how posted to my thread, I was not the only one who suffered from this IRS error.
But since I stumbled upon it early, took some effort to figure out what happened.
Took the IRS about 1.5 years to realize their error and contact me to retrieve a refund they sent without my request for it.
I assume others have been contacted as well.

[TheEternalVortex]

FreeTaxUSA has a nice UI and its customer support was good. But they had several inaccuracies in form 1116 for foreign tax credit.

I didn't have any issues with 1116 in my FTU return. I compared it to TurboTax and both gave me exactly the same results. I used to use TT all the time but will be switching to FTU in future years.

[dodecahedron]

This has me wondering how the prices you manage to lock in on the online version compare to the deals that ardent desktop bargain shoppers (like me) get?

I assume there’s no equivalent for the online versions to camelcamelcamel (which can easily be used to monitor the Amazon prices for the download versions of TT and Block software) or Boglehead forum threads like this one for download version of TT or this one for the download version of Block, which bargain hunters can subscribe to in order to be alerted to ephemeral price dips.

For the past ten years, I have managed to lock in a price of under $30 for Block Deluxe Fed + State, and in fact generally well under $30, sometimes under $20 thanks to camelcamelcamel and/or the BH forum thread on Block. I think that my lowest ever price for Block Deluxe Fed + State was something like $15. (I used to get the download version of TT free as a Vanguard Flagship perk before that, but abandoned TT in 2014 when it had a stubborn obscure/arcane but important to me bug that I didn’t want to spend time dealing with customer support on.)

I don't shop around for tax software. For those with very simple returns, and living in zero income tax states, maybe the cheapest solution is the best solution. But I have modest complexity in. my federal and a state that can be complex and high tax. I want my taxes done correctly more than I care about saving $10 or 20 on software. I dont' care what H&R Block Costs, nor freetaxusa, I have been using TurboTax for decades, online some years and desktop other years more due to technical issues and/or wanting the forms mode and ability to file more than one federal return for family. If I want desktop, I buy early and get some discount. If I want online, I commit early to get whatever discount vs the "surprise you have already entered all your data" price. Sometimes I find my credit cards willing to give cash back for using TT, so I would use them, why not ? But those same cc have deals for other tax software and I ignore them until TT gives me a reason to look elsewhere.

I can relate to your reasoning. I too had been using TT out of inertia for decades. Before there were download or online versions, my late husband used to pick up a physical package with a CD at Staples as early as it was available so we could start tax planning before the end of the year. He wasn’t waiting for sales and he liked the CD (even though we had to download updates every time we used it!). Our taxes were quite complicated back then (small consulting business, with extensive deductible business travel expenses, both domestic and international, needing to file non-resident returns in multiple states where my late husband did work for clients as well as a non-resident NYC city unincorporated business tax return.). We would not have wanted to switch back then. And we were in a very high bracket for both federal and state back then.

However, after his death in 2013, and my subsequent closure of the business, my taxes became far simpler. And as I age, I am trying to streamline my finances even further to simplify the burden on my eventual POA and/or executor filing my final return. When TT refused to handle a relatively straightforward matter (involving claiming different types of education tax breaks for different students in our household), I decided to test out the Block Deluxe download product and discovered it has worked just fine for everything I needed it to do.

Buying the download on Black Friday deal has become a fun annual ritual that serves dual purpose of getting a good price AND nudging me to get started on tax planning before the end of the tax year plus also nudging me to have conversations about my financial affairs with my daughters who will eventually take over my finances, including eventually filing my final tax return after I am gone.

But one of these years, I may start test-driving FreeTaxUSA, since one of my daughters already uses that product for her own taxes.

[beyou]

When TT refused to handle a relatively straightforward matter (involving claiming different types of education tax breaks for different students in our household), I decided to test out the Block Deluxe download product and discovered it has worked just fine for everything I needed it to do.

Some posters may wonder about what those tax breaks might be unless resolved since then.
If this education tax break issue was at or near the 2013 date you listed, likely resolved since then.
My kids went to college after that point in time and I had no issues with TT as it related to their college 529 plan nor other college tax issues.
The only problem I had was with my state gov not believing my documentation of a less common situation, nothing to do with TT.
TT handled the issue correctly and had to convince my state gov that all was fine as-is (which they eventually did agree I was fine without an amendment to my return).

[Chuckles960]

Since the original post is about foreign tax credit, an uncommon situation, I will mention my experience with another uncommon need, form 8621. This is required when you own foreign mutual funds (among other things)---one 6-page form for each fund. In my case I owned them involuntarily, through inheritance, and sold them as quickly as I could.

TT and most other tax prep software do not support e-filing of form 8621. TT tells you to print the return, add paper forms 8621 to them, and mail. Which is possible, but it is not helpful.

So I found TaxAct, which does submit up to 25 (?) forms 8621 electronically at no extra charge (unlike HRBlock). My experience was mixed. I found it easy to navigate in TaxAct. It appears to do the basics well, with a simple interface, much less irritating than TT with all its faux friendliness, nagging and upselling. But filling out the incredibly mysterious 8621 forms was essentially a DIY project. There was little help given, I had to google for explanations (mostly useless) and ask on Reddit (very useful). TaxAct did transfer my 8621 entries to other forms.

At the end of the day I got to e-file the complete return, so that was good. Also it downloads 1099s from major brokerages, unlike FreeTaxUSA. That in itself is worth some money.

On TaxAct, as with TT, you have to enter your discount codes (e.g. AAA) before you start your return; once you start, they have you by the ... and won't give you the discounts. I would probably still use TaxAct next year (when 8621 is not needed) in preference to TT, unless of course the Fidelity god smiles on me and gives me TT for free again as they did for the last many years.

[dodecahedron]

When TT refused to handle a relatively straightforward matter (involving claiming different types of education tax breaks for different students in our household), I decided to test out the Block Deluxe download product and discovered it has worked just fine for everything I needed it to do.

Some posters may wonder about what those tax breaks might be unless resolved since then.
If this education tax break issue was at or near the 2013 date you listed, likely resolved since then.
My kids went to college after that point in time and I had no issues with TT as it related to their college 529 plan nor other college tax issues.
The only problem I had was with my state gov not believing my documentation of a less common situation, nothing to do with TT.
TT handled the issue correctly and had to convince my state gov that all was fine as-is (which they eventually did agree I was fine without an amendment to my return).

The issue is now longer applicable because it involved the now-expired Tuition & Fees Deduction. It had to do with two part-time students in the tax household, and the truly optimal strategy for me was to claim the Lifetime Learning Credit for one student’s Qualified Higher Education Expenses (QHEE) and the Tuition & Fees Deduction for the other student’s QHEE.

For some reason, TT’s mandatory education tax break optimizer was not realizing this was the optimal strategy for me and it was steadfastly refusing to allow me to override its optimizer’s choice of a suboptimal strategy. (Before anyone rushes in to remind that you can’t double-dip by claiming both tax breaks, you could—as long as you were using a different student’s QHEE for each tax break.). H&R Block was perfectly content to allow me to do what I had already figured out was optimal.

No longer relevant, both because Tuition & Fees Deduction expired years ago and I no longer have students in my tax household, and also because ACA PTC was part of the reason that surgical use of Tuition & Fees deduction was optimal for me and I’m on Medicare now (and thus ACA is history for me), but Block has continued to meet my needs more than adequately and I feel no inclination to switch back to a more expensive product.

[Kimchi2]

Desktop TurboTax changed the user interface for inputting 1099 data this year. It is now very cumbersome if you have multiple 1099s. In the past it was a breeze to use.