TaxCut review

The tax software solution that’s hard to love

TaxCut
Image Credit: H&R Block

Our Verdict

TaxCut manages to walk that middle line between features and pricing, to offer attractive software tiers that can handle a variety of tax situations. However, the additional charge for the State, and some of the bugs we encountered keep this solution from living up to its potential.

For

  • Free tier offering
  • Unlimited support
  • Ease of W-2 import

Against

  • State add-on costs extra on paid tiers
  • Difficult to navigate
  • Frequent updates for downloadable version

Looking around your neighborhood, most likely there is an H&R Block tax preparation service nearby, often at a local mall, which has its origins dating back to 1955. With their franchise model, they boast they have completed over 720 million tax returns through their 12,000+ locations.

TaxCut software was previously sold under the Kiplinger’s financial name, but for the last few years it has come under the H&R Block name. In 2016, this tax software was used to complete 7.4 million tax returns, making TaxCut a popular solution among users.

TaxCut offers a range of plans suited to your needs and there is even a free option as well (Image Credit: H&R Block)

TaxCut offers a range of plans suited to your needs and there is even a free option as well (Image Credit: H&R Block)

(Image: © Image Credit: H&R Block)

Pricing

Like other providers, TaxCut offers a tiered approach to choose the right package of features to complete your taxes. Here we detail the online offerings.

TaxCut offers a free tier to entice users to use their software, known as ‘Free online.’ It has a number of features with support for W-2 import via a smartphone pic, the Earned Income Tax Credit, the Child Tax Credit, and Social Security income. It can also handle common deductions including child care deductions and student loan interest. Even on this free tier, there is support available via self-help in their help center, and technical support via chat. Also making this an even better deal is the State tax return is included as well.

Moving up to the starter paid tier is ‘Deluxe Online,’ that can be had for $29.99 (about £23). All of the features carryover from the free tier, and notable adds include access to the previous six years of tax returns, DeductionPro to optimize noncash donations, support for mortgage interest, real estate taxes, and Health Savings Accounts. The technical support gets upgraded to chat or phone support. The downgrade is that the State tax return is not included, and costs an additional $36.99 (about £28).

The next tier up brings us to ‘Premium online,’ which costs $49.99 (about £38), and includes all the functionality of the two lower versions. This version of TaxCut has tools for some more advanced situations including freelance income with expenses under $5000 (about £3771), rental property income, stock sales income, and cost basis calculations for property sales. It also has the ability to import expenses from popular expense tracking apps such as Stride. This Premium tier does not support State tax returns, but it can be added for $36.99 (about £28), the same price in the Deluxe tier.

The top tier of TaxCut is ‘Self-employed Online,’ which costs $79.99 (about £60), and includes all the features of all the lower tiers. What this tier adds is Business Booster to help write off the startup costs, and helps with small business expenses, such as a home office, and vehicle expenses, but it still lacks the State which needs to be added at the same price as the lower tiers.  

Features

TaxCut has options download their software to a PC, smartphone app, or through an online web portal. We appreciate the choice provided so users can suit their preference, but for those that go the download route, there are seemingly endless updates required to keep the program up to date, and we know of a case of an update that rendered the program unusable for a veteran TaxCut user to the point it required software removal and reinstallation on their Macintosh laptop.

On face value, TaxCut has many of the right ingredients to get the job done, including real time refund results as the tax return is completed, a high level of data security, the ability to import data from other tax preparers by uploading any PDF file, and integration with financial software such as Quicken and Microsoft Money.

There are also plenty of options for support, such as the live chat, and phone. Also, leveraging their physical locations, TaxCut offers ‘Tax Pro Review’ to have your return after you enter your data to be double checked by one of their pros, for guaranteed accuracy, and year round access to your tax pro thereafter, which costs $119.99 (about £91).

You can search through TaxCut to find information on all of your savings and retirement plans (Image Credit: H&R Block) 

You can search through TaxCut to find information on all of your savings and retirement plans (Image Credit: H&R Block) 

(Image: © Image Credit: H&R Block)

However, in use, TaxCut at times is less than the sum of its parts. For example, navigation tends to be clumsy at times, and the way the sections are divided, trying to go back one screen requires going back to the beginning of the section, and navigating forward through multiple screens just to go a single screen back.

Using the integrated search is also clunky at times, as in the screenshot above when we searched for retirement, not all possibilities come up. For example, there is no indication on where to enter a 401k savings plan contribution, offered through many employers, and which TaxCut does indeed handle (hint - its goes in with the W-2 income, but there is no indication of this in the search). 

Adding itemized lists is easy in TaxCut but finding which form they refer to can be confusing (Image Credit: H&R Block)

Adding itemized lists is easy in TaxCut but finding which form they refer to can be confusing (Image Credit: H&R Block)

(Image: © Image Credit: H&R Block)

Another nuisance is present with itemized lists, and while they are easy enough to add through the interview process, there is no indication what tax form each itemized list is going to, and when you want to go back to an already created list, it can be difficult to know where the data was entered.

After all, we doubt most tax novices know that IRS Form 4952 Line 1b relates to Investment Interest Expense Paid, and it would be nice for TaxCut to indicate this in the dialogue box to ‘Select an Itemized List,’ rather than forcing users to jump between existing lists until they find the one they are looking for.

Final verdict

TaxCut remains a popular tax software choice, and we appreciate the options for download and online use, and also that the higher tiers can handle just about anything a tax filer will throw at it to file their return.

However, holding this program back is the lack of assistance for less common scenarios. That includes estimated State taxes, where it is simpler to enter the data directly into the PDF rather than retyping your name and address - that the program already has - four times additionally for each quarterly contribution. It is also difficult to navigate some portions of the return, and there are bugs on some installations, which is disappointing, particularly considering the maturity of this software.

Add in the high additional charge to complete a State return, and all this makes TaxCut difficult to give the nod to.