The H&R Block – Turbo Tax War

You already know I am a tax geek, so this is right up my alley.

I have always had a weird interest in Company’s marketing battles (Budweiser vs. Miller, Coke vs. Pepsi, McDonalds vs. Everyone).  Well, I never in my wildest dreams thought this would apply to the tax preparation industry.

H&R Block and Turbo Tax have been duking it our for years.  They have been attempting to commoditize the tax preparation market in an attempt to drive corporate profits and cross sell into a variety of other products (investments, insurance, mortgages, etc.).

Turbo Tax started to run ads that showed H&R tax preparers as plumbers and clothing store clerks outside of preparing tax returns. H&R Block sued to try to stop these ads. Unfortunately, they lost in court and received a further black eye with the courts in essence validating this fact.

H&R Block would not be out done.  The recently started running ads stating the “they sign every return” while Turbo Tax signs none.  Basically, would you rather have some one who knows something about filing taxes and will stand behind it or do it yourself with no assurances.

Obviously, I am bias, but I don’t get the value of either Company. H&R Block mostly has part time tax preparer who do something else during the year.  Their fees appear to be on par with or higher than most local CPAs and EAs.  So why use them – convenience, comfort.  Most likely because they saturate the market with advertising through out the year.

I get Turbo Tax even less. Particularly with more complicated returns.  It is a program that asks a variety of “simple” questions to produce a return.  Who has not manipulated their answers to get more money back?  They have no liability, you are the preparer.  I often tell people that if my return was the only one I had to do, I would hire someone else.  The law is way to complicated and changes frequently.  It seems like an unnecessary risk, but it is cheap.

It goes with out saying that I would always recommend the local CPA (or EA depending on complexity) to do your taxes.  Generally, great quality work by seasoned professionals that are there all year round.  They ask you simple questions then decide how the law applies to your specific situation.  No huge advertising budgets that you need to pay for, generally no cross selling into other products (some do, but not the majority) and usually you find these people through referrals from people you know and trust.

Time will tell how the “tax preparer war” will play out.  Regardless it will be fun to watch.  It gives me a new reason to anxiously await Super Bowl commercials.

This entry was posted in Blog, Featured on Homepage and tagged . Bookmark the permalink.

Comments are closed.