2022 Tax Preparation and Filing

As tax season approaches, new guidance from the Internal Revenue Service (IRS) may benefit consumers’ wallets for this year and into the future. The organization is promoting the Saver’s Credit, or the Retirement Savings Contribution Credit, just in time for Americans to start preparing to file their taxes. 

The program is designed to help low- and middle-income earners who contribute to 401(k) plans, Individual Retirement Agreements (IRA), or other retirement programs. The credit can also benefit individuals who contribute to Achieving a Better Life Experience (ABLE) accounts for those with disabilities. 

The Saver’s Credit can help increase consumers’ tax refunds or help reduce what’s owed to the IRS. This year, the credit can be as much as $1,000 ($2,000 for married couples), though that amount isn’t guaranteed. 

Applying for the Saver’s Credit

To be eligible for the Saver’s Credit, the IRS accounts for consumers’ income, marital (and tax filing) status, and the amount they’ve contributed to retirement plans or ABLE accounts. However, because of inflation, the agency has reported that the income limits are likely to be higher than they have been in the past – and continue to increase for next year, too. 

Below are the current criteria to qualify for the Saver’s Credit: 

• Married couples filing separately or singles filing individually with incomes up to $34,000 in 2022 or $36,500 in 2023

• Married couples filing jointly with incomes up to $68,000 in 2022 or $73,000 in 2023

• Heads of household with incomes up to $51,000 in 2022 or $54,750 in 2023

There are also a few limitations for who is eligible to qualify for the Saver's Credit. These include: 

• A student – anyone enrolled in school full-time for at least five months of the calendar year – is ineligible for the Saver’s Credit. 

• Taxpayers under the age of 18 are not eligible for the Saver’s Credit. 

• Any individual who is a dependent on someone else’s tax return is ineligible for the Saver’s Credit. 

The IRA reported that in the 2020 tax year, the average return from the Saver’s Credit was around $186 per qualifying return. In total, nearly $2 billion were claimed on nearly 9.5 million tax returns across the country. 

It’s also important to note that the credits are likely to be less for consumers who have taken money from an ABLE account or retirement plan between 2019 and the official filing deadline for 2022 taxes (April 18, 2023). 

Planning for tax season

It’s not too late for consumers with eligible retirement plans or ABLE accounts to take advantage of the Saver’s Credit for the 2022 tax season. Taxpayers have until the official filing deadline – April 18, 2023 – to contribute money into their Roth or traditional IRAs. Any new retirement plans set up between now and the deadline will also be eligible for the Saver’s Credit for 2022. 

However, for traditional workplace retirement plans, all contributions must be made before the end of the year. This includes: 401(k) plans, 403(b) plans for public school employees and tax-exempt organizations, Governmental 457 plans for state and local employees, and Thrift Savings Plans for federal employees. 

The IRS recommends that employees start planning with their employers for their 2023 contributions. In the meantime, a full list of retirement accounts that are eligible for the Saver’s Credit is available here. 

As Americans prepare to file their 2022 taxes in the coming months, staying on top of the latest changes and updates can help make the process easier. 

The Internal Revenue Service (IRS) has now released a frequently asked questions (FAQ) list to help guide consumers through two of the biggest changes this year: energy efficient home improvements and residential clean energy property credits. 

The agency explained that following the passing of the Inflation Reduction Act, many of the tax credits, credit limitations, and eligible expenditures have changed since consumers last filed taxes. 

What to expect

While the new FAQ breaks down the changes related to energy-efficient home improvements and clean energy property credits, the document first provides this general overview of the Residential Clean Energy Property Credit: 

“The residential clean energy property credit is a 30% credit for certain qualified expenditures made by a taxpayer for residential energy efficient property. The IRA extended the residential clean energy property credit through 2034, modified the applicable credit percentage rates, and added battery storage technology as an eligible expenditure. The credit applies for property placed in service after December 31, 2021, and before January 1, 2023. The credit percentage rate phases down to 26% for property placed in service in 2033, 22% for property placed in service in 2034, and no credit available for property placed in service after December 31, 2034.” 

From there, users can explore the document in-depth to learn more about: 

• Energy Efficient Home Improvement Credit: Qualifying Expenditures and Credit Amount

• Residential Clean Energy Property Credit: Qualifying Expenditures and Credit Amount

• Energy Efficiency Requirements

• Qualifying Residence

• Labor Costs

• Timing of Credits

• General Questions

• Examples 

Deeper dive

Each section dives deeper into these topics to help consumers get detailed insights into what to expect when filing taxes. This includes:

• Which home improvements are eligible for the Energy Efficient Home Improvement Credit
• What residential clean energy expenditures are eligible for a Residential Clean Energy Property Credit
• What energy efficiency requirements must be met to qualify for the Energy Efficient Home Improvement Credit, what type of residence qualifies for the credit
• Whether existing homes are eligible for the credit
• Whether residences used as businesses are eligible for the credit
• Whether taxpayers can include the cost of labor, and more. 

The IRS utilizes FAQs as a way to quickly share new information with taxpayers that is widely asked about and applicable throughout tax season. While these documents are subject to change, they serve to be beneficial guides for consumers. 

To access the full FAQ on energy efficiency home improvements and clean energy credits, click here. 

The Inflation Reduction Act, recently signed into law, contains $85 billion in new funding for the Internal Revenue Service (IRS). In addition to hiring additional agents to perform more audits, the money may be targeted for projects designed to improve the taxpayer experience.

Morris Armstrong, founder and owner of Morris Armstrong EA LLC, says the new funding is supposed to be earmarked for increasing staff and improving technology at the tax collection agency. 

“The IRS loves data, and they need to have people who can understand the data and manipulate it as they examine more complex returns,” Armstrong told ConsumerAffairs. 

He says many of the new hires will be focused on returns from pass-through entities such as trusts, partnerships, and S corporations, especially those affiliated with higher-earning taxpayers. 

“While, personally, I think that the administration is mistaken in saying that those making (under) $400,000 will not be impacted, I do think that the very high earners will face more scrutiny. Audit rates for each segment will increase,” Armstrong said.

Phone calls may get answered

Jeremy Babener, member of the Legal Committee at the National Structured Settlements Trade Association, said the additional money could improve the taxpayer experience. For example, he says phone calls to the agency may have a better chance of being answered. The IRS Taxpayer Advocate has found that currently, the IRS only answers about 10% of the phone calls it receives from taxpayers.

"Many have expressed concern of a wave of new audits, (but) they may be forgetting that the IRS is operating with fewer employees today than in the early 1990s, and a significantly larger population," Babener told us.

Babener says the IRS’s recent reduced funding has probably resulted in more audits of lower and middle-income taxpayers because their returns are less complex. But he says those audits also bring in less money.

Smoother process

Armine Alajian, a CPA and founder of the Alajian Group, tells us the increase in IRS funding should make dealing with the tax agency a smoother process. She says both taxpayers and tax preparers have encountered frustrations because the agency has been short-staffed and underfunded.

“We’ve seen a steep decline in IRS employees over the past few years, so if this increased budget stops this decline, we may see much-needed changes in the taxpayer experience,” Alajian told us. “Because the IRS has been severely underfunded for so long, it’s difficult to say if this infusion of money alone will truly bring the improvements we're looking for."

About $15 million of the new funding has been earmarked for a study of the IRS’s FreeFile system and how to simplify and improve it.

“It’s a big project and there are a lot of hurdles, said Yvonne Cort, tax compliance officer at Capell Barnett Matalon & Schoenfeld. “I can’t say whether the program is likely to be put in place. For taxpayers with simple returns, it would be beneficial to have an easy, online way to file.”

Armstrong notes the new law allocates about $5 billion to update the IRS business systems, which he says are out of date. There’s about $3 billion for taxpayer services and about $25 billion for taxpayer support. 

“However, there is $46 billion allocated towards enforcement and it is this number that is making people think that they are in trouble,” Armstrong said. “In my opinion, the IRS does a good job of collecting taxes and that funds the government. They should be funded adequately.”

TurboTax has become one of the dominant do-it-yourself tax preparation platforms, helping taxpayers prepare their federal and state tax returns. Recently, however, some users have objected to what they say is a “hidden fee” – a $40 charge when the customer chooses to pay for the service by using a portion of their federal refund.

“Even though I was using the free version, TurboTax hit me with several surprise fees at the end,” Luke, of Salt Lake City, wrote in a ConsumerAffairs review. “There was a state fee that came out of nowhere at the end that I did not have to pay for last year. TurboTax is easy to use, but, in the end, they used me.”

Other users posting on ConsumerAffairs and on other forums like Reddit have also complained about the $40 fee. The company, however, disputes claims that the fee is “hidden.” 

TurboTax, which is owned by Intuit, says it has been upfront about what it calls a “refund transfer fee.” The company allows customers who file their taxes online to have TurboTax’s charges deducted from the refund, but it imposes a charge for doing that. Customers’ other alternative is to pay with a credit card or debit card.

“The Refund Processing Service is an option for paying your TurboTax fee by deducting it from your federal tax refund. It's a convenient way to pay for TurboTax if you don't have (or don't want to use) your credit or debit card,” the company explains on its Help page. “You don't need Refund Processing Service to e-file and process your refund, and refund processing won't slow down or speed up your refund.”

How transparent?

The point of contention is whether TurboTax is transparent about the refund transfer fee when users electronically file their taxes. Some customers have said they were not aware of the fee before they selected the option to pay with part of their refund. David, of Hanover, Mass., is one of them.

“I just completed my taxes (basic return), refund both state and federal. I was automatically upgraded to $90 federal fee and $50 state fee. I can live with the fees. But the $39.99 fee to pay the $140 fees is a money grab,” David wrote in his review.

TurboTax points out that the page with information about its fees gives users the option to pay with a credit card or pay with their federal refund. Below the federal refund option, it says, “Don’t worry about pulling out your wallet. We’ll simply deduct the $39.99 fee from your federal refund and send the balance to your bank account.” 

One user pointed out that the fee is mentioned, but they said “it is not crystal clear” what the fee is and what it is for.

TurboTax is not the only company to trigger complaints about “hidden fees.” Earlier this year, DoorDash found itself as the defendant in a proposed class-action lawsuit alleging that it charged hidden fees during the pandemic. In March, competitor GrubHub was also slapped with a suit by the District of Columbia Attorney General’s office that leveled similar charges.

‘All-in pricing’

Brett Goldberg, the co-founder and co-CEO of TickPick, has been an advocate of “all-in pricing” – which relies on telling consumers the bottom line cost in all advertising. Because of competition, he says businesses often want to advertise the lowest possible price. It’s why an airline will advertise a low fare but disclose later that there are fees to check bags. An Airbnb host can also charge a large “cleaning fee” so that they can advertise a lower nightly rate than their competitors.

“Businesses know that consumers who are price shopping are looking to compare that upfront price,” Goldberg told ConsumerAffairs. “So to maximize conversions, the lower the price they can display, the higher their conversion value will be.”

It’s not surprising that consumers would get angry when they choose a service for what appears to be a low price but wind up paying more because of a fee or two that wasn’t included in the advertised price.

“Furthermore, businesses will say that they want to be transparent and show the all-in price. But without regulations, very few businesses are going to put themselves at a disadvantage,” Goldberg said. 

The pressure to hide the true cost of a service, product, or experience may only get more intense in this inflationary environment. Right now, Goldberg says “consumer deception is extreme” for live events, airline tickets, hotels, and rental homes.

The solution, he says, is for regulators to set concrete rules that govern fee disclosures and advertised prices so that they are transparent. With regulation, Goldberg says consumers would have better price information and businesses would be competing on a more level playing field.

If you need a copy of a previous tax return from the IRS, you may be out of luck. According to a recently released report from the Treasury Inspector General for Tax Administration (IG), the U.S. income tax agency laid waste to data belonging to an estimated 30 million filers in March 2021.

The IG called it a “management decision” stemming from the IRS’ “continued inability to process backlogs of paper-filed tax returns.” The IRS made another decision to cut back on its handling of paper earlier this year when it decided to suspend the mailing of additional letters, such as balance due notices and unfiled tax return notices, to taxpayers.

The push to e-file

While the agency didn’t come right out and say it would rather have taxpayers file electronically, the report spent considerable ink promoting e-filed tax returns as the preference. 

“[E-filings] are sent through a number of upfront validations that check for more than 1,000 possible errors before the IRS accepts an e-filed tax return for processing,” the report said.

The agency says filing electronically comes with other benefits, including: 

• No need to mail paper tax returns

• Greater tax return accuracy

• Confirmation that the IRS received the tax return

• Secure and confidential submission of highly personal tax return information, and

• E-filing substantially reduces IRS processing costs.

The IG stated that the error rates are a lot lower for e-filed returns when compared to paper-filed tax returns. For example, the paper-filed tax return error rate was almost 10 times greater than the e-filed tax return error rate during the 2020 tax year.

Despite what might be a push towards e-filing, the public may have a different preference when it comes to filing taxes. Earlier this year, a separate study by tax preparation company Jackson Hewitt suggested that taxpayers aren’t all that smitten with going the e-file route because of added costs and the difficulty it takes to correct a mistake. 

Tax preparers give the move a thumbs-down

Tax professionals were aghast at the IRS' decision to delete tax data. Paul Miller, Managing Partner & CPA of Miller & Co., LLP, told ConsumerAffairs that the IRS needs to be upfront with what data it's deleting.

"Of course this can cause more delays in processing returns, getting refunds, clearing notices etc. Taxpayers are totally frustrated, as calling the IRS is an impossible task. As professionals, we have a dedicated line and we still have to wait. This is going to increase the nightmare that already exists," he said.

Miller went on to note that the IRS eroded its reputation even further recently over an "enormous amount of fraud" that the agency has encountered. He said a number of his clients are getting letters to verify their identity because the IRS doesn’t know if the return filed is actually the return of the taxpayer. To combat that fraud, the IRS is now using ID Me to verify taxpayers. It is also requesting that taxpayers get an ID Protection PIN number.

ConsumerAffairs reached out to the IRS for comment, but the agency did not immediately respond to a request for comment.

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Update

The IRS has issued a statement that clarifies which tax forms were destroyed and why the agency took that step:

"In 2020, the IRS prioritized the processing of backlogged tax returns to get taxpayers their refunds and support other COVID-related relief over inputting the less than 1% of information documents – mostly Form 1099s –  that were submitted on paper," the agency told ConsumerAffairs.

"System constraints require IRS to process these paper forms by the end of the calendar year in which they were received. This meant that these returns could no longer be processed once filing season 2021 began. Not processing these information returns did not impact original return filing by taxpayers in any way as taxpayers received their own copy to use in filing an accurate return. The IRS is planning to process all paper information returns received in 2021 and 2022."

TurboTax’s parent company Intuit has ended its effort to fight all 50 U.S. states over supposedly steering low-income Americans away from free tax-filing services and towards its retail tax filing services.

In announcing the settlement, New York Attorney General Letitia James said the company will pay $141 million in restitution to 4.4 million consumers across the country who were unfairly charged. 

And that’s just half of Intuit’s concession. The company has also agreed to end TurboTax’s “free, free, free” ad campaign, which critics say led consumers to pay for services that they thought were free.

“Intuit cheated millions of low-income Americans out of free tax filing services they were entitled to,” said Attorney General James. “For years, Intuit misled the most vulnerable among us to make a profit. Today, every state in the nation is holding Intuit accountable for scamming millions of taxpayers, and we’re putting millions of dollars back into the pockets of impacted Americans. This agreement should serve as a reminder to companies large and small that engaging in these deceptive marketing ploys is illegal.”

Intuit has lots to do

All 50 states and the District of Columbia may have signed onto the agreement, but Intuit’s courtroom appearances aren’t over yet. Just a month ago, the Federal Trade Commission (FTC) also sued the company for falsely claiming TurboTax was free. 

Intuit claimed it "admitted no wrongdoing" as part of its agreement with the individual states, and it expects "minimal impact to its business" from the changes demanded in the future. Nonetheless, Intuit agreed to reform its business practices by following these provisions:

• Refraining from making misrepresentations in connection with promoting or offering any online tax preparation products;

• Enhancing disclosures in its advertising and marketing of free products;

• Designing its products to better inform users whether they will be eligible to file their taxes for free; and

• Refraining from requiring consumers to start their tax filing over if they exit one of Intuit’s paid products to use a free product instead.

Tax filers who feel they were duped by Intuit’s advertising and used TurboTax's Free Edition for tax years 2016 through 2018 are supposed to receive a direct payment of approximately $30 for each year that they were deceived into paying for filing services, James’ office stated. Impacted consumers will automatically receive notices and a check by mail.

Time is getting tight for taxpayers who haven’t yet filed their 2021 federal tax returns. The Internal Revenue Service (IRS) is sending out one last reminder that the deadline to file and pay taxes owed for most individual income tax returns is Monday, April 18.

The agency also wants late filers to know that if they need help or feel they need to request an extension, they can contact the agency 24 hours a day on IRS.gov.

Electronic filing is the way to go

The IRS said filing tax returns electronically is currently the preferred method since we're so close to the filing deadline. The agency said currently available tax software can do all the calculations, catch common errors, and prevent mistakes by prompting taxpayers for any missing information. Filing electronically is also the fastest way to receive a refund, and using direct deposit is the quickest way to get a refund into a taxpayer’s bank account.

There’s also IRS Free File, which is available to any individual or family that had an adjusted gross income of $73,000 or less in 2021. IRS makes Free File Fillable Forms available to anyone who is comfortable preparing their own tax return.

Accuracy also counts, especially for taxpayers who have things like Advance Child Tax Credits and Economic Impact Payments to deal with. Consumers who are in that sort of situation should use the IRS’ Online Account service. Going that route provides all the information to help file an accurate return.

Need more time?

If you’re up against the clock and don’t think you can make the April 18 deadline, you’re not alone. The IRS estimates that 15 million taxpayers will also request an extension.

“In a matter of minutes, anyone can request an extension until October 17, using Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return,” the agency said. “An extension of time to file is not an extension of time to pay, however, and taxpayers must estimate their tax liability on this form and pay any amount due by the April 18 filing deadline to avoid penalties and interest.”

The agency said it would be wise for taxpayers who are requesting more time to pay all or part of their estimated income tax due and indicate that the payment is for an extension. There are three ways to do that electronically: Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or by paying with a debit card, credit card, or digital wallet.

“This way they don't have to file a separate extension form and will receive a confirmation number for their records,” the agency said.

For taxpayers who prefer to go the old fashion mail-in route, they need to download IRS Form 4868 from Forms, Instructions & Publications. They will need to complete and send that form to the correct IRS office by the April 18 filing deadline.

Don't forget to answer the cryptocurrency question

One of the most glaring gaffes taxpayers are making this year is not filing out the cryptocurrency question on the front page of their tax return.

On the front page of Form 1040, Form 1040-SR, and Form 1040-NR is a checkbox regarding “virtual currency” – meaning Bitcoin, Ethereum, and all other cryptocurrencies. The question on the return asks, "At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?"

The IRS says the question “must” be answered by every single taxpayer, not just the ones who bought or sold cryptocurrencies in 2021.

An increasing number of taxpayers are completing their tax returns themselves and turning to online software packages to do so. The appeal is faster speed and lower cost.

But a study by tax preparation company Jackson Hewitt suggests that some taxpayers are often presented with an unpleasant surprise. Among online tax filers, nearly 30% of respondents in the study reported that they paid more for online tax preparation services last year than they expected. 

The study further makes the case that many free or reduced-price filing options come with unexpected charges. The study found that once a filer starts the process, they find that the cost may steadily increase based on the complexity of the return or other factors, making the total price once completed higher than they originally anticipated.

It might be partly explained by the difference between a human tax preparer and a software package. Jackson Hewitt and competitor H&R Block built their businesses around human tax preparers, but both also offer an online do-it-yourself software option. And it’s not always unexpected costs that give consumers heartburn.

No way to change a mistake

Stephen, of Tuscaloosa, Ala., told us he switched to H&R Block’s software a few years ago with good results – until last year when the software told him he owed thousands of dollars.

“It was counting a Roth IRA as income, but I couldn't find any way to change it,” Stephen wrote in a ConsumerAffairs review. “The online site has gone too far at shielding you from forms so that I couldn't just check a box to check it.”

Patricia, of Springfield, Va., also hit a speed bump last year when preparing her tax return using Intuit TurboTax.

“The online service made errors in my federal tax return for 2020,” they wrote in a review. “My refund was withheld for two months and then when I received it, it was only $147, much smaller than the refund amount that Turbo Tax reported. I received a letter from the IRS a week later, stating that a miscalculation was made on my 1040SR which affected recovery rebate credit.”

Flat price

Jackson Hewitt says it eliminates surprise charges by offering a no-frills, $25 flat price for filing federal and state taxes, regardless of the tax return's complexity.

“Despite the rising cost of living due to inflationary pressures, we're committed to providing a flat price for all online filers," said Zachary Cohen, head of Digital Products at Jackson Hewitt.

Some taxpayers have another free but often-overlooked option. Internal Revenue Service (IRS) Free File is a partnership between the tax agency and several commercial tax preparation software companies.

By registering at Free File, taxpayers can use the same software they would otherwise pay to use to complete their returns. It’s available at no charge to taxpayers with adjusted gross incomes (AGI) of $73,000 or less. The IRS explains how it works here.

The Internal Revenue Service (IRS) has decided that it may have been a little overzealous in the letter-sending department and is suspending more than a dozen additional letters, including balance due notices and unfiled tax return notices.

The agency is backing off on mailing notices because the COVID-19 pandemic caused it to be backed up with original and amended returns from both individuals and businesses that have yet to be processed. It feels that taking this step can help avoid some confusion for both taxpayers and tax professionals.

“IRS employees are committed to doing everything possible with our limited resources to help people during this period,” said IRS Commissioner Chuck Rettig.

“We are working hard, long hours pushing creative paths forward in an effort to be part of the solution, rather than the problem. Our employees continue to expend every effort to balance a confluence of multiple, unprecedented demands − including successfully starting the filing season, working our inventory of unprocessed tax returns as well as looking for additional ways to minimize burden for taxpayers, tax professionals and businesses.”

The agency left the door slightly ajar for the automatic notices it is shelving to return. It said once the current backlog is worked through, it will reassess the situation and try to determine if and when those notices should return. 

Consumers still need to pay attention to letters 

The IRS says it’s possible that some of the letters it’s putting on hold are in the mail already, and those letters still need to be heeded if a taxpayer or tax professional believes a notice is accurate.

In those situations, the agency says the taxpayer or preparer should act to rectify the situation as soon as possible. As an example, the IRS cautions people with a balance due that interest and penalties can continue to accrue.

Consumers can visit the IRS website for payment options.

The Internal Revenue Service (IRS) reports that all of the payments in the third round of its Economic Impact program have been issued. Now, it's reminding Americans not to forget that they can claim any remaining stimulus payment they’re entitled to on their 2021 income tax return as part of the 2021 Recovery Rebate Credit.

For those who haven’t received their payment yet, the IRS says not to worry because some of the payments may still be in the mail.

Tax return implications

The agency reminds taxpayers – specifically, families and eligible parents of children born in 2021  – that anyone added as a dependent in 2021 has the right to claim the 2021 Recovery Rebate Credit on their next tax return. However, the size of the deduction depends on the income and number of dependents listed on an individual’s 2021 income tax return.

The IRS says another caveat exists for families and individuals who did not receive the full amount of their third-round Economic Impact Payment because their circumstances in 2021 were different than they were in 2020. In that situation, those families may be eligible to receive additional money by claiming the 2021 Recovery Rebate Credit on their 2021 income tax return.

The IRS makes it clear that anyone who wants to claim money from the program must claim the 2021 Recovery Rebate Credit on their 2021 income tax return. The agency says the process will not happen automatically and that consumers must apply to receive compensation.

Get the paperwork done ASAP

Because of the limited time that consumers have to file their 2021 tax returns, the IRS urges people to start collecting all the information they need to file an accurate return and avoid processing delays. If the agency finds errors in a return or considers it incomplete, it said correcting those issues only complicates matters and that tax refunds could possibly be delayed until the issues are resolved. 

In an email to ConsumerAffairs, the IRS stated that filing electronically allows tax software to calculate credits and deductions, including the 2021 Recovery Rebate Credit. The 2021 Recovery Rebate Credit Worksheet on Form 1040 and Form 1040-SR instructions can also help, as can a list of FAQs that the agency has prepared to help taxpayers through the process.

The fastest and most secure way for eligible individuals to get their 2021 tax refund that will include their allowable 2021 Recovery Rebate Credit is by filing electronically and choosing direct deposit.

It’s tax season. Forms are in the mail, and soon it will be time to file 2021 tax returns. 

Most Americans turn to a professional for help. Of the national tax preparation services, Intuit-TurboTax, Jackson Hewitt, and H&R Block are among the most widely used.

But which is the best? An analysis of ConsumerAffairs reviews of these three companies shows remarkable parity. In our 5-star system, all three are rated 3.8 stars.

We decided to do a deeper dive to see what sets the companies apart and what customers like and don’t like about them.

Intuit-TurboTax

TurboTax is an online software that allows taxpayers to prepare their returns themselves. It offers a 100% accuracy guarantee and promises to help users get the fastest refund possible.

Randall, of Porter, Texas, used TurboTax last year, but then he decided to have a CPA redo his filing because it was more complicated than in previous years.

“While TurboTax would have been $40.00 to complete and electronically send in, this CPA charged me $897.00 for the exact same outcome that Turbo Tax figured my taxes would have been,” Randall wrote in a ConsumerAffairs review. “Needless to say I won't be back to a CPA. Also took a month to get back from the CPA while Turbo Tax I was done in 2 hours.” 

TurboTax offers four plans, including one that’s free. The top-tier plan is for self-employed individuals and costs $120.

Jackson Hewitt

Jackson Hewitt is a nationwide tax service company with offices in most cities. It specializes in tax preparation, tax filing, and debt resolution. 

Taxpayers can use the company to file taxes online, but they can opt to have one of the company’s tax preparers fill out the return. Jessica, of Douglasville, Ga., says she had a good experience.

“It was a fast and pleasant experience she (the tax preparer) was very friendly and professional and made sure I got every tax credit I could and made my experience very nice,” Jessica wrote in a ConsumerAffairs review. “I will most definitely be back in the near future.”

Jackson Hewitt has three plans for taxpayers. Like TurboTax, it has a free plan and two plans that include filing state returns.

H&R Block

H&R Block operates on a similar basis as Jackson Hewitt. It may have an office nearby, but it also offers plenty of self-service features online. William,  of Ooltewah, Tenn., tells us he has used H&R Block the last five tax seasons.

“I opt to pay the extra $29.95 and have access to my last seven years' tax filings,” William wrote in his review. “I always get confirmations when my tax filing is accepted by the IRS and I do not get an excessive amount of email solicitations from them. Very professional and respectful company.”

H&R Block offers customers several different options. Fees for working with the company’s tax professionals using the document upload option start at $49, while the drop-off and in-office services start at $69. Additional fees may apply, including a $44.99 fee for filing state taxes.