Fake TurboTax Discount Through Vanguard and Fidelity

By Harry Sit

If you buy an expensive product at a discount, is it still a discount? What if you can buy the same product at pretty much the same price everywhere else without a coupon or a special link? Is it still a discount?

I’m talking about the "discounted" TurboTax offered through financial institutions like Vanguard or Fidelity.

Both Vanguard and Fidelity prominently features a 25% discount from TurboTax on their homepage.

Why do they do that? To help their customers save some money through a negotiated deal? Nah. The only logical reason would be that TurboTax/Intuit pays them for sending customers. Vanguard and Fidelity just want to make some money off the customers.

I wouldn’t mind letting Vanguard or Fidelity earn the marketing dollars from TurboTax if customers actually get a discount. When you think you are getting a 25% discount, you actually just get pretty much the same price you get everywhere else. And that price is about double the price on a comparable product from its closest competitor.

I looked at prices for TurboTax Deluxe plus 1 state return:

  Federal State Total
Online @ TurboTax.com $30 $37 $67
Online via Vanguard or Fidelity $22 $28 $50
Download @ TurboTax.com $60 included $60
Download via Vanguard or Fidelity $45 included $45
Download from Amazon $46 included $46
CD from Walmart $47 included $47
CD from OfficeMax $50 included $50
H&R Block Deluxe + State from Amazon $25 included $25

You can buy TurboTax Deluxe + State from Amazon for $46, or from Walmart for $47, or from OfficeMax for $50. With the 25% discount through Vanguard or Fidelity, you pay $45. Big deal. If you use it online, it will be $50. Meanwhile you can buy the competitive product H&R Block At Home Deluxe + State from Amazon for $25. I bought it when it was on sale for $20.

Only Flagship customers with $1 million or more at Vanguard get a true deal. They get TurboTax for free. I’m sure Vanguard is paying for it, not Intuit.

Why don’t Vanguard and Fidelity market the less expensive H&R Block software then? My guess would be that they can’t make as much money from the distribution deal. H&R Block did not pay me to write this. I just want to shine some light on the fake discount Vanguard and Fidelity are promoting.

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Posted on February 15, 2012 under Spending. Keywords: .

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Comments

23 Comments on Fake TurboTax Discount Through Vanguard and Fidelity

  1. jennypenny on February 15, 2012
     

    Do you like H&R block’s software? I use it now, but I’ve always been tempted to use both one year and compare the results.

  2. TFB on February 15, 2012
     

    I used both and moved back and forth in the past. They are comparable. When I used both in the same year, they gave the same results. I wouldn’t pay double the price for one than the other.

  3. nickel on February 15, 2012
     

    It’s not really a fake discount, it’s just no better than the discount you’ll get elsewhere. Note that Amazon shows the MSRP with a strikethrough, and then their price. No, they don’t explicitly turn it into a percentage, but it’s the same thing. As for why they don’t market the H&R Block software, I have no idea, but you’re probably right.

    I’ve never actually used the H&R Block software (TaxCut?) so I can’t compare. I’ve used TurboTax and liked it, but if I were to experiment, I’d probably try TaxACT.

    Also, from your table, it appears that you can get the discount on just the Federal version, which could be handy for those in states with no income tax. With the other alternatives (Amazon, etc.) the state is included so you have no choice but to buy it.

  4. TFB on February 15, 2012
     

    @nickel – Yes H&R Block At Home is the new name for TaxCut. The table in the post compared 1 federal + 1 state. There are also federal-only editions so you don’t have to pay for state if you don’t have state income tax or if you want to just use the state’s website to file for state. Amazon sells TurboTax Deluxe federal-only for $25. Through the Vanguard or Fidelity “discount” you get TurboTax Deluxe federal-only for $22.45. It’s still a small discount off the street price, but not close to what they make it sound like.

  5. dd on February 15, 2012
     

    I’m just grateful that there are easy and inexpensive software programs available to do taxes. Now that I am familiar with one brand, it would be hard to change.

  6. Joe Morgan on February 15, 2012
     

    I’ve got one for you…

    This past week I saw a Staples flyer advertising TurboTax deluxe for *$10 more* than Walmart, Best Buy and Office Depot.. what made me laugh out loud (literally) was the graphic had a big sign that read: “Free $10 gift card with purchase!”

  7. TFB on February 15, 2012
     

    @dd – It’s easier to change than you think. I switched at least three times in the past. Every time it went seamlessly because they import each other’s files. Like almost everyone else I started with TurboTax because it was the well known brand. I switched to TaxCut when TurboTax came with some nasty DRM stuff. I switched back from TaxCut to TurboTax when TaxCut required logging in as an admin. I switched again after TaxCut (now H&R Block) no longer required logging in as an admin. If are OK with paying twice as much for your comfort, of course it’s your call but do realize switching is quite easy. The import will carry over the info in your last year’s file.

  8. Mike on February 15, 2012
     

    Haven’t found anything better than TaxACT online. $13.95 including e-file for federal / state for returning customers (ultimate version). $17.95 for new customers.

  9. Guest on February 15, 2012
     

    Search for TurboTax on the Bank of America website. No need to be a customer of BofA, but the discount is better than Amazon, Vanguard, or Fidelity.

  10. nickel on February 15, 2012
     

    What if you’ve used the online version of, say, TurboTax in the past. Can H&R Block easily import from that? (or vice versa)

  11. TFB on February 15, 2012
     

    I’ve never tried it because I don’t use the online version, but on the hrblock.com home page, it says:

    NEW! Import last year’s tax data from TurboTax® and TaxACT® online.

    I should add that maintaining control over your data for portability is one more reason to use an installed program as opposed to online.

  12. White Coat Investor on February 18, 2012
     

    I’m not sure what I’m missing here, but the product I use (basic online) was significantly cheaper through Vanguard than directly from intuit, and cheaper than the comparable H&R Block product.

    Intuit $20 + $40 = $60
    Vanguard $15 + $28 = $43
    H&R Block Basic $20 + $35 = $55 (you can get it for $37 through links on affiliate blogs)

    If you really want to save a few bucks here, you need to go with Taxact. Only $18 total.

    Disclosure: I have affiliate links for turbotax and H&R block on my blog.

  13. White Coat Investor on February 18, 2012
     

    TFB- How come you use the deluxe versions? I haven’t found anything yet I couldn’t do with the basic version.

  14. TFB on February 18, 2012
     

    @White Coat – Because downloaded Deluxe + State program includes state at no extra charge. All the prices you posted above are significantly higher than the current $25 price for HR Block Deluxe + State at Amazon, or the $20 price I paid in January.

  15. ajk on February 18, 2012
     

    Your screen capture of Fidelity shows “25% of (sic) TurboTax software.” Today, their website seems to have learned how to spell off. Were you just lucky to catch them on an of (sic) day?

  16. ajk on February 18, 2012
     

    I have had different experiences with H&R Block and TT. In the past, while H&RB would import last year’s TT, TT would not import last year’s HRB (something about the big bully not worrying about number 2). Also, TT would handle some uncommon situations that HRB would not, e.g., make an estimated state payment in January; deduct state taxes on your return; get a state refund in April; figure out what part of your state refund is taxable the following year – HRB told me to follow the IRS instructions; TT did it for me.

  17. David C on February 18, 2012
     

    Capital One Bank’s discount (“Save 35% on TurboTax Online Federal products”) seems to be pulling the same gimick as Vanguard and Fidelity (the prices are basically the same).

    But it could be worse: Regions Bank customers do not get a “discount” at all and are presented the “regular” TurboTax.com prices. To be fair Regions’ website does not claim to offer a discount but still…

  18. bucky on February 21, 2012
     

    I don’t see why that’s a fake discount. Vanguard, Fidelity, Amazon, Walmart, etc are all legitimately offering $10-15 discounts off the price you would pay had you bought it directly from TurboTax.

    Does H&R block software automatically download your stock info? That’s a must-have for me. I tried TaxAct before and was happy with it, except that I had to manually enter my stock info. That was a deal breaker.

  19. TFB on February 21, 2012
     

    @bucky – Yes it does, but not from as many places. I have a post coming up next week about this.

  20. dd on February 26, 2012
     

    I’m a bit peeved at TT, as it did not import bond information from 2010 (this is a tedious input if there are many bonds) and seems to have a jinx with the split taxes on a 2010 Roth conversion. No number to call, just forums where I need to register.

  21. GSR on March 2, 2012
     

    Hi TFB,

    The below are the rates I found on HR block website….. How did you got them free? can you help me understand what i am missing.

    —————————————————————————————————————–

    H&R Block At Home Online State Tax Programs

    H&R Block At Home Free
    state — $27.95 for each state return filed*

    H&R Block At Home Basic
    state — $34.95 for each state return filed*

    H&R Block At Home Deluxe
    state — $34.95 for each state return filed*

    H&R Block Premium
    state — $34.95 for each state return filed*

  22. TFB on March 2, 2012
     

    @GSR – The downloadable HR Block Deluxe + State program you buy from Amazon includes State (but not State e-filing).

  23. Bob on March 6, 2012
     

    If you don’t need the state (and to be honest, many states are so easy to do yourself after you do the federal) then the discount is good. Oregon (where I live) even allows free e-filing for all filers through online forms. To be honest, the Oregon online forms are a bit of a pain to fill out, but may be worth it for many people.

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