Ask 10 random people to name a tax service and I bet you’ll hear the name H&R Block six or seven times.
And for good reason: The company has about 10,000 offices located along well-traveled retail strips across the country.
Come tax season H&R Block’s ads seem ubiquitous.
Now the company even has special product placement deals with Walmart and Amazon.
But ever-presence doesn’t always equal excellent service, so let’s take a closer look at what H&R Block’s online tax services could do for you.
What’s in a Name: A Brief History of H&R Block
Brothers Henry and Richard Bloch started H&R Block in Kansas City back in 1955 to offer accounting services for small businesses in the growing post-war economy.
Business was good — so good the brothers, who’d altered the spelling of their last name for marketing purposes, decided to expand into New York City.
Neither brother wanted to move to the Big Apple, so they opted for the franchising model, spawning an expansive network of branches that now includes about 70,000 advisors.
Over the decades, H&R Block has continued to expand its offerings, which now even include lending in some markets. We’ll stick to the company’s tax services for the purposes of this review, focusing specifically on its online products.
Should H&R Block Handle Your Return?
In 1986 H&R Block worked with the Internal Revenue Service to develop electronic filing. Since then, the number of taxpayers who file electronically has grown steadily.
In 2018, 91 percent of taxpayers filed electronically.
While H&R Block pioneered the growing business of electronic filing, it is now part of a crowded field of online and software-based tax preparers vying for your attention each spring.
Ease of Use
In the online (and software-based) tax game, ease of use matters a lot. Even the most accurate and well-developed services have trouble gaining traction if users can’t figure them out.
H&R Block has stayed on top of its game here.
Over the years, electronic tax services have learned it’s no longer enough to save taxpayers a trip to the post office (and a hand cramp or two from those old-fashioned paper forms).
Services have to offer intuitive user experiences, such as questionnaires and other forms of guided data entry.
The computer then performs the calculations, decides which forms you need, and then creates filled-out, IRS-ready forms that need only your electronic signature.
H&R Block has pushed this process a step further recently with its photo-based input for W2 forms, eliminating even the need to type in your earnings. Just snap a picture of your W2 with your smartphone and the system will input the digits itself.
Free vs. Paid Transparency
After Christmas, when tax season heats up, you’ll start seeing ads about free tax preparation services online. Some lucky people actually can do their taxes for free.
For example, taxpayers with one wage-earning job and few (or no) exemptions, no write-offs or rebates, and no capital gains or losses can do their taxes for free with just about any tax service.
If your life is more complicated, though, you’ll need more processing power, which requires an upgrade from a free service. Trouble is, you may not know how much you’ll be paying until you’ve started doing your taxes.
Here’s how it often works: You enter your data and start to feel pretty confident about the whole thing. Then, when you try to claim the rebate you earned by getting an energy-efficient dishwasher, your online tax service throws a paywall in front of you.
You have to decide whether to pay your $40 (or whatever the fee may be) or to pull the plug and start over with another, less-expensive service, or to forget about the rebate you’d hoped to claim
One thing I like about H&R Block is that you can find out what’s free before you get started. Watch out, though:
What falls within H&R Block’s (and other services’) free offerings changes every year. Sometimes it changes within the same tax season.
Early H&R Block filers last year, for example, could file a 1040 (the more complex standard tax form) for free.
A few weeks later, the 1040 went back behind the paywall.
A Tiered Approach to Services
Part of the transparency I applauded above becomes more evident with H&R Block’s tiers of services. They help filers know up front what they’ll be paying:
- Free edition: Filers of the simplest returns can get the job done with H&R Block’s free version, which usually includes 1040-EZ (the simplest) and 1040-A (the next-to-simplest) forms. If you need a regular 1040 form, keep looking. Also, if you’d like to save your tax forms within the system from year to year, you’ll have to upgrade.
- Deluxe edition: The first step up the pay ladder, the Deluxe edition gives you the power to file a basic 1040 form. If you have a lot of side hustles and need to itemize expenses, you may need a higher tier.
- Premium: Investors dealing with capital gains or losses will need this package to file the appropriate Schedule forms.
- Self-employed: H&R Block recently added this tier especially for small business owners and independent contractors. As an added bonus, the system will import tax data directly from Uber.
As I mentioned above, what falls beneath H&R Block’s free services can change from year to year. Check the company’s site for the most up-to-date offerings and prices I haven’t included here since they are subject to change.
Human Help When You Need It
Almost all tax services have humans available to help when you need them. You can usually chat online or call a customer service rep.
H&R Block has an added advantage: It has more than 60 years experience in preparing taxes.
If you get into a bind, you can stop by one of H&R Block’s 10,000 or so locations nationwide to ask a question.
More likely, though, you’d just chat online with a representative, which is free when you’re using a paid plan. This is a separate resource from H&R Block’s brick-and-mortar staff, but the company still trains its online reps with tax, technical, and customer service related skills.
Another reason I like H&R Block’s online customer service: It does not simply link you to the IRS documentation when you have a question. I’ve noticed some companies take that shortcut as if online customers couldn’t find their own way to IRS.gov!
Support After Filing
Q: What’s worse than getting audited by the IRS?
A: Having no support from your tax preparer when that happens.
H&R Block prides itself on accuracy, but more than 60 years in the business of preparing other people’s taxes has taught the company something about the IRS (and your state’s revenue department): Audits happen.
For about $20 you can buy H&R Block’s “Worry-Free Audit Support” package if you get audited. You’ll be assigned a one-on-one advisor to help guide you through the process.
H&R Block: Same Services, New Delivery Methods
The digital revolution has humbled a lot of iconic companies in the American business landscape:
- Kodak and Fuji: Once the kings of photography, they have not developed much success in the digital age.
- Newspapers: Though great at creating content, newspapers have struggled to find reliable revenue streams online.
- Cable TV companies: Even they are shedding subscribers who favor online streaming services.
How, then, has H&R Block done so well in the online era?
By delivering its classic product — tax advice — in new ways online and through its retail software products.
As a result, tax filers can have the best of both worlds: a legacy of knowledge and experience combined with convenience.
For more help with filing your taxes, take a look at my 2018 federal income tax guide.