Another Tax Update: Harry Sit’s “bakeoff”

Blogger Harry Sit has reviewed the 3 most popular tax software packages, employing a simple test to gauge accuracy of calculations of self employed health insurance deduction and premium tax credit.  His review confirms what our contributors have collectively determined:

  • TaxAct:  Works; closely replicates IRS example, with slight discrepancy due to rounding.
  • TurboTax: Works; closely replicates IRS example, with slight discrepancy due to rounding. However, taxpayers who also need to prepare a Schedule C will need to purchase the highest price, “Home & Business Edition”.
  • H&R Block: Total fail. Users are advised that the software package does not include necessary features to prepare tax returns for self employed taxpayers who have purchased insurance via an exchange.

Read the whole post at The Finance Buff

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The TurboTax Test: It works.

(…And I’ll tell you how)

Well, today is April Fool’s Day — but this post is no joke.

I’m a long time H&R Block user– but H&R Block essentially bit the dust when it didn’t manage to include the ability to reconcile the self employed health insurance deductions with exchange premium credit eligibility:  all self-employed taxpayers who bought policies from Healthcare.gov or their state exchange during 2014 are out of luck.   We’re greeted with a message that the software can’t do our taxes this year.

So off I went to buy new software.  This isn’t a good year for TurboTax users either, because this it the year that TurboTax changed it’s program and pricing policies.  If you want to have the program prepare a Schedule C, you’ve got to buy the highest price “Home and Business” edition — listed at $104.99 on the TurboTax softeare for the online product;  $99.99 for the  downloadable software.

But with a little shopping around I saved $35 — Amazon Prime members can download the software for $64.99, at least for now. Other retailers, such as Costco, also offering similar discounts.  Continue reading

H&R Block Fail Part 2:

hrblock

This is the message that shows up in HR Block Software after the most recent (March 26) update.

This message shows up EVEN IF the taxpayer is NOT entitled to ANY tax credit. In my case, because of unanticipated non-earned income during 2014 (a capital gain from sale of assets) my income is too high to qualify for the tax credit, and I will have to pay the full clawback amount.

Continue reading

H&R Block: Total Fail

Users of H&R Block report receiving this message when attempting to prepare their return after the latest update:

“Since you’re claiming the ACA premium tax credit and the self-employed health insurance deduction, your return requires additional calculations that aren’t part of the program. To file an accurate return, we recommend you complete your return with an H&R Block Tax professional.

You must fix this problem before filing.”

At this point the best option for self-employed taxpayers who are or may be entitled to claim a premium tax credit for exchange-purchased insurance appears to be TurboTax, which appears to calculate amounts correctly.

TaxAct software seems to also be able to handle the correct calculations, so may be an acceptable alternative to H&R Block.