H&R Block

H&R Block: The largest tax-preparation chain

H&R Block (*Est. $190 for an average return) is far and away the biggest tax-preparation chain in the U.S., with close to 12,000 storefronts and a huge market share. The next-closest competitor, Jackson Hewitt, which operates out of Wal-Mart stores, does less than half of H&R Block's volume. We found some positive comments from users about H&R Block's services, and repeat customers seem to be especially satisfied (usually because they've found an individual tax preparer with whom they like working).

In addition to its storefront services, H&R Block offers numerous options for filing returns electronically, including a free one. Via the H&R Block website, you can complete a basic federal tax return and e-file for free, with audit support, or pay $20 for a basic return, audit support and online advice from H&R Block representatives. More complicated returns cost $30 to $50, with the latter including one short in-person session with an H&R Block tax preparer to go over your return. In each case, state returns cost extra. You can also download H&R Block At Home tax software from the website for $20 for the most basic version to up to $80 for more sophisticated versions, including one aimed at small-business owners; more details about H&R Block At Home are available in the ConsumerSearch report on tax-preparation software. All these options are cheaper than visiting a brick-and-mortar H&R Block location and sitting down with a live preparer.

You can also save money by preparing your taxes yourself using H&R Block's software and then taking your return to an H&R Block office to have it double-checked. H&R Block's Best of Both review (*Est. $80) provides a review of your return, unlimited help and advice, and a guarantee to pay penalties and provide audit assistance if H&R Block makes an error in the preparation of your tax return or calculation of taxes owed. Although H&R Block pledges to "stand behind you" if you are audited, the company's website says that means only that it "will explain your audit notice and advise you as to documentation you should provide to the auditing authority." They won't actually represent you in a dispute with the IRS.

H&R Block last year introduced a new financial product related to RALs -- the Emerald Card, a prepaid MasterCard onto which the RAL money can be transferred. Reviews point out that if you check the H&R Block website, you'll see that the Emerald Card carries an astonishing number of fees: $1 every time you check your balance, $1.95 every time you withdraw money from an ATM, and a 1.5 percent fee for each over-the-counter withdrawal on personalized cards. Unfortunately, you have to click on a link in fine print at the bottom of the page about the Emerald Card and then scroll through a "customer service" agreement written in legal language for details about all the fees.

H&R Block no longer offers RALs, but it does offer what it calls refund-anticipation checks (RACs) for those who have H&R Block prepare and e-file their tax returns. Their website says you will receive your check in eight to 15 days, minus the tax-preparation charges and other fees. This is the same length of time it takes the IRS to direct deposit a refund, so RACs are likely to appeal only to people who don't have a bank account for direct deposit or who don't want to pay the tax-preparation charges up front (or both). H&R Block sets up a temporary bank account into which the refund is direct deposited and then either gives the taxpayer a check or loads the funds onto an Emerald Card. It costs $20 extra to get the refund in the form of a check, and as discussed above, the Emerald Card has its own associated fees.

As the biggest tax-preparation chain in the U.S., H&R Block hires a huge number of seasonal employees, and we found comments to the effect that many of these seasonal preparers have minimal qualifications. More than a few sources warn against H&R Block's $35 "Peace of Mind" extended audit insurance, which reviewers say is next to useless, and reviews are similarly critical of this chain's high-fee banking services.