Why does my tax refund change when using FreeTaxUSA, TurboTax, or H&R Block?

As tax season gets underway, some filers are finding that depending on the tax program they use to file their return, they are getting a different refund amount. What can cause these discrepancies?

Electronically filing programs, both free and paid options, have reshaped the tax filing landscape. Fewer people look to tax professionals when filing because the software makes it much easier compared to filing a paper return. However, these programs are not perfect, and many try to entice you with a free option by highlighting possible needs for a more advanced and expensive version. Still, it is unnerving that there could be differences from software to software that are not related to human error when interacting with the program. Upon digging into the source of the confusion, it appears that some programs are more forthcoming in explaining the tax credits, benefits, and deductions each filer is eligible for.

“Why not shop around?” is the advice of one TikToker

The stories that are surfacing are popping up on social media, which makes verifying the claims made by the content creators difficult. It’s not like they are walking through step by step, allowing the audience or a professional to check for possible mistakes that could explain the differences. Nevertheless, the amounts that are being offered are jarring in some cases.

Last year, a TikTok user with the handle robinlynn.marie posted a video that highlighted a $100 difference in her refund amount between H&R Block and TurboTax, with the former offering a better deal. Then after trying FreeTaxUSA, she was offered a refund that was $400 more than what TurboTax calculated, in part because she realized she was eligible for additional credits and deductions.

Another user, gavinjlarnard, stayed out of the refund discrepancy drama but did post a video in early January, highlighting the free options available to filers with an annual income under $80,000. The creator noted that TurboTax has been sued multiple times over the last decade for offering customers a free option but making the process appear that a paid option will benefit them more.

In nearly half of all states, you can use the IRS’s own software, Direct File, for free. In states where the program is not available, FreeTaxUSA is another common alternative.

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