The deadline is looming for the 2026 tax season, so if you haven’t filed yet, it’s time to start thinking seriously about which tax prep software you’re going to use. If you’re not sure what kind of support you need, H&R Block is a good place to start.

The tax prep service offers guided tax filing software along with a variety of ways to connect with a tax pro if you need to. You can start filing on your own with your preferred online or desktop H&R tax software. Then, add on various levels of expert assistance if you get stuck.

And if you don’t want to deal with your taxes at all, just gather up your forms and hand them off to an H&R Block tax preparer to do it for you.

Keep reading for our breakdown of the key features that come with H&R Block tax prep software. You’ll also get tips on how to choose the edition that makes the most sense for your tax situation.

H&R Block features to make your tax filing painless

Using H&R Block tax prep software is a fairly seamless experience. The guided software walks you through the filing process via a series of conversational questions. It feels more like you’re chatting with a tax preparer rather than trying to decipher cryptic tax codes.

While you’ll see a similar user-friendly experience with TurboTax, H&R Block shines in its support options. When you compare the various tiers of both tax software packages side by side, H&R Block typically gives you more access to expert support for the price than TurboTax.

For example, if you’re eligible for the H&R Block Online Free Edition, you can add tax pro review for $55 (and your state return is still free). With TurboTax, the cheapest edition that includes expert assistance is TurboTax Expert Assist Deluxe, which costs $129 for the federal return plus $69 per state.

Say this is your first time filing taxes after moving overseas and you don’t even know where to start. You can work with an H&R Block tax pro online and let them do your taxes for you.

In short, it’s easy to find the right balance of cost and support with the many options and add-ons H&R Block offers.

How to choose the right H&R Block Online Edition

There are many editions of H&R Block tax software along with various tiers of expert support. Here’s a breakdown of the key differences between different versions of H&R Block online tax filing software:

• H&R Block Free Edition: This free version only supports a limited range of simple tax situations. You can find more details on which filers qualify for this edition on the website. If you are eligible, you can e-file both your federal and state tax returns for free.
• H&R Block Deluxe: For $65 (plus $37 per state), Deluxe is the version most filers probably need. In addition to the basic tax situations included in the free edition, Deluxe adds support for filers who want to claim tax credits or deductions for homeowners, childcare expenses and hundreds of other situations. You can also report self-employment income (but can’t claim business expenses). If your itemized deductions would be higher than the standard deduction or you earned some extra freelance income on the side, get H&R Block Deluxe.
• H&R Block Premium: For $105 (plus $37 per state), Premium includes all tax situations from the free and deluxe editions as well as various investment incomes. If you own rental properties, stocks, bonds, or crypto, H&R Block Premium is the version you need.
• H&R Block Self-Employed: This version costs $130 plus $37 per state. It includes all tax situations from previous versions as well as support for self-employed filers who want to deduct expenses. Note that you can use Deluxe to claim income if you’re self-employed, but you can’t deduct business expenses from that income unless you upgrade to H&R Block Self-Employed.

If you’re still not sure which version you need, H&R Block lets you start filing with the free edition. It will then prompt you to upgrade if you need to add a form that’s not included in the free tax prep software.

Just be wary of which upgrades you’re agreeing to. For example, you might need to upgrade to H&R Block Deluxe to claim certain homeowner deductions. But that doesn’t mean you need to upgrade to H&R Block Deluxe with Tax Pro Review.

If you do accidentally agree to an upgrade you don’t want or need, you should be able to connect with a chatbot or online customer service representative to downgrade.

How to choose the right version of H&R Block desktop software

The desktop version of H&R Block tax prep software functions pretty much the same as the online version. The difference is that your data is stored on your computer rather than online if you download H&R Block to your desktop.

There’s also no free version of the desktop software. But all versions do include e-filing of up to five federal tax returns for free. This is a definite bargain if you have family members (or friends) who also need to file taxes this year.

Most desktop versions also include one state return for free, though e-filing that return costs an extra $19.95. If you want to skip the extra e-filing fee, you can print out the state return for free and file it by mail.

Here’s a quick glance at all the desktop versions of H&R Block tax software:

• H&R Block Basic: For $50, this version includes guided software for simple tax situations. You can e-file up to five separate federal tax returns at no extra cost. No state returns are included, so you’ll need to pay $39.95 extra per state to fill out your state tax return. Add $19.95 per state return to e-file it with H&R Block.
• H&R Block Deluxe + State: For $70, this version includes everything in Basic plus support for filers who own their home and have investments. It also includes one state return for free, so you can skip that $39.95 fee. But you’ll still pay $19.95 if you choose to e-file your state return through H&R Block.
• H&R Block Premium: For $95, this version includes everything in Deluxe plus support for those who own rental properties, are self-employed, or do freelance work on the side.
• H&R Block Premium & Business: For $115, this version includes everything in Premium plus support for those who own a business.

Are you eligible for the H&R Block Online Free Edition?

H&R Block offers free online tax filing for some filers. According to its website, approximately 52% of filers will qualify for the free version.

Eligibility is based entirely on how simple your taxes are. If you’re a W2 employee with no freelance income and you’re planning to take the standard deduction, you probably qualify.

Here’s a complete list of tax situations that are included in the H&R Block Online Free Edition:

• W-2 income
• Up to $1,500 in interest and dividend income
• Unemployment income
• Qualified retirement plan distributions from Form 1099-R
• Student loan interest deduction
• Child Tax Credit
• Earned Income Tax Credit

If your taxes involve anything more than what’s on that list, you’ll need to upgrade to one of the paid versions of the tax prep software.

Who should use H&R Block tax software?

H&R Block tax software is easy to use for just about anyone, but it offers the best value for filers with complex or unusual tax situations. That’s because the software can handle pretty much any situation you can throw at it. It also offers a lot of flexibility in the amount of support you get.

However, if your taxes are relatively straightforward but not quite simple enough to qualify for the free version of H&R Block, you might be able to save by opting for another tax prep software that’s either free or charges less than H&R Block for your tax situation.

Shop around and compare your options to find the most affordable tax prep software that still offers all the features and support you want.

Related content

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• Not Ready to File Taxes? Eight Things to Do Now to Prepare
• 2026 State Tax Changes to Know Now: Is Your Tax Rate Lower?

In a significant development that could impact taxpayers, the Federal Trade Commission (FTC) has finalized a settlement with H&R Block, one of the nation's leading tax preparation companies.

The order, announced Thursday, mandates changes to H&R Block's advertising and customer service practices for the upcoming 2025 and 2026 tax seasons.

The settlement addresses long-standing issues in the tax preparation industry, particularly the practice of upselling and the difficulties consumers face when trying to access genuinely free tax filing options. Here’s more of what you need to know.

H&R Block misleading tax filing practices

The settlement comes in response to a February 2024 FTC complaint that accused H&R Block of engaging in unfair and deceptive practices.

As Kiplinger has reported, the company denied the allegations, which included making it difficult for consumers to downgrade to less expensive tax preparation products and misleadingly advertising H&R Block's "free" tax filing services.

H&R Block must pay $7 million, which will reportedly be used to compensate affected consumers.

Here are other key points of the settlement.

• By February 15, 2025, H&R Block must implement a system allowing consumers to downgrade products through automated means, like chatbots, rather than requiring them to contact customer service directly.
• The tax prep company must, by 2026, stop deleting consumers' previously entered information (data wiping) when they downgrade products.
• H&R Block is now obligated to disclose in its "free" product advertisements either the percentage of taxpayers eligible for these products or state that most taxpayers don't qualify.

What happened to some H&R Block customers?

According to the FTC, consumers who tried to downgrade to a less expensive H&R Block product were unnecessarily forced to contact customer service. When customers finally succeeded with the downgrade, they were penalized by having their data wiped, which forced them to start over.

As a result, the FTC contended that some consumers chose to stick with the more expensive product, even when it wasn't needed. Some of these customers were reportedly misled into selecting the more expensive product.

The agency also alleged that H&R Block had been running deceptive ads for years.

Although the company made some changes to its advertising, what the FTC describes as vague statements and hard-to-find information continued to mislead consumers into thinking they could file for free when they didn’t qualify.

Note: It's important to remember that your income, age in some cases, and the complexity of your federal income tax return are some factors that determine which free tax filing options you can use and which are best for you.

Additionally, no matter the service you select, various eligibility criteria may make you ineligible to use the free versions of certain products and services.

Regarding the settlement, a spokesperson for H&R Block provided the following statement to Kiplinger.

"H&R Block prides itself in providing consumers with quality online tax preparation products, which has never been an issue in this matter. Many of the changes in the settlement have either already been made or are in process. We are pleased to put this behind us so we can focus on serving our clients during the 2025 tax season."

Free tax filing impact

These changes are expected to improve the tax filing experience for millions of U.S. taxpayers.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, emphasized the importance of this action, stating in a release, "American taxpayers who seek tax-filing help should be able to choose the services they need—and know the truth about how much they'll pay.”

The FTC hopes to reduce consumer frustration and financial burden during tax season by requiring H&R Block to be more transparent about its "free" offerings and making it easier for consumers to choose appropriate products.

As the 2025 tax season approaches, taxpayers should be aware of these upcoming changes and their rights when using tax filing services.

For example, last year, the FTC found that Intuit, maker of Turbo Tax, misled consumers with "free" tax products and services many people were not eligible for. The Commission found this to violate the Federal Trade Commission Act, which prohibits deceptive acts and practices.

At the time, Intuit said it had “always been clear, fair, and transparent with its customers and was committed to free tax preparation.”

This story has been updated to include a comment from H&R Block.

Related

• FTC: H&R Block Data Wiping and Upgrade Policies Harm Taxpayers
• Did You Overpay for H&R Block Tax Filing?
• FTC Says Inutit Turbo Tax-Free Filing Ads Are Deceptive
• Ways to File Taxes for Free

The IRS recently completed its Direct File pilot program. This test tax filing initiative was designed to offer taxpayers a new, simple way to file their federal taxes directly with the agency for free. By the final week of the 2024 tax season, the IRS says Direct File processed over 5,000 accepted returns daily, totaling more than 140,000 filings.

That had some wondering whether the program, which has critics, including some in the United States Congress and tax prep industry giants like Intuit TurboTax and H&R Block, would return next year. 

Earlier this summer, the IRS answered that question, announcing that Direct File will be a permanent option for filing federal tax returns, starting with the 2025 tax season.

"The clear message is that many taxpayers across the nation want the IRS to provide more than one no-cost option for filing electronically," IRS Commissioner Danny Werfel said in a statement.

The move to make Direct File permanent comes after numerous lawmakers and organizations recently urged U.S. Treasury Secretary Janet Yellen and Werfel to renew the program for another tax season.

Direct File IRS tax filing program

Commissioner Werfel emphasized the IRS' commitment to providing taxpayers with convenient filing options, saying, "Adding Direct File to the menu of filing options fits squarely into our effort to make taxes as easy as possible for Americans, including saving time and money."

• The IRS Direct File pilot program was available to a limited number of people in 12 states during the 2024 tax season.
• Direct File gradually expanded its availability throughout the filing season, experiencing a surge in taxpayer interest in pilot states as the tax deadline approached.
• Taxpayers collectively claimed over $90 million in tax refunds and reported $35 million in tax balances due.
• Millions of people reportedly visited the Direct File website to learn more about the filing option.

Werfel has highlighted the positive response from users, who said they found Direct File fast and easy to use. According to an IRS survey of Direct File users, 90% ranked their experience as "Excellent" or "Above Average." Additionally, 86% of respondents indicated their trust in the IRS increased due to using Direct File.

Key states in the Direct File pilot included California, Texas, Florida, New York, and Washington. California and Texas had the most taxpayers using the system, with 33,238 and 29,099, respectively. Nevada, New Hampshire, South Dakota, Tennessee, and Wyoming also participated. All states and the District of Columbia have been invited to participate for the 2025 tax filing season, but as Kiplinger reported, not all states are opting into Direct File. 

According to Werfel, the IRS also saw increased use of other free options for taxpayers this past tax season, including Free File and returns prepared at VITA and TCE sites. (IRS Free File focuses on taxpayers with income under $79,000 and has recently been extended for five years, through 2029.)

IRS Direct File will be permanent option

Operational costs of the Direct File pilot, including customer service and technology, totaled about $2.4 million. The IRS plans to continue analyzing data collected during the pilot, including taxpayer feedback, to inform updates, enhancements, and expansion. A goal is to provide additional details in the coming months and invite all 50 states and the District of Columbia to participate in Direct File.

Numerous lawmakers, led by Sen. Elizabeth Warren (D-Mass.), had advocated keeping and expanding the  Direct File platform. In a letter to Treasury Secretary Yellen and IRS Commissioner Werfel, they  described the pilot as an "incredible success." The letter also emphasized Direct File's potential to provide a free and easy tax filing alternative to commercial providers.  Intuit TurboTax estimates a loss of about one million users of its free edition product in FY2024. The company's stock (INTU) dropped after that news and the IRS announcement regarding Direct File.

The Coalition for Free and Fair Filing, comprised of close to 260 organizations in the U.S., wrote a similar letter touting the program's popularity among taxpayers. That letter also noted Federal Trade Commission (FTC) concerns surrounding allegedly misleading and deceptive advertising involving two tax prep industry giants, Intuit Turbo Tax and H&R Block. 

The coalition's website states, “Americans spend 1.7 billion hours or $31 billion annually to file their taxes.” The group contends most individuals should be able to do this for free in less time with options like Direct File.

However, some in the U.S. House of Representatives have expressed concern about Direct File, saying it "unilaterally makes the IRS the tax preparer, filer, and auditor for the American people."

Related

• Some States Won't IRS Direct File Option
• Types of Income the IRS Doesn't Tax
• FTC: Intuit Turbo Tax-Free Filing Ads Are Deceptive
• Did You Overpay for H&R Block Tax Filing?

The Federal Trade Commission (FTC) filed a complaint against tax preparation company H&R Block, accusing the tax services provider of unfair and deceptive business practices. The allegations include “coercing” customers into paying more than necessary, running deceptive “free filing” ads, and unfair downgrade policies. 

“Companies using coercive techniques that harm consumers can expect to hear from the FTC," Samuel Levine, director of the FTC’s Bureau of Consumer Protection said in a release. According to Levine, H&R Block is one such company. 

H&R Block designed its products to “present an obstacle course of tedious challenges to consumers, pressuring them into overpaying,” Levine added.

For its part, H&R Block has denied wrongdoing and in March, filed a lawsuit against the FTC related to the agency's complaint. Here's more of what you need to know about that cause of action and the FTC's original complaint.

H&R Block downgrade policy 

According to the FTC, consumers who try to downgrade to a less expensive H&R Block product are unnecessarily forced to spend time and effort contacting customer service. When customers finally succeed with the downgrade, they are penalized by having their data wiped, which forces them to start over.

The FTC complaint states the data-wiping practice “requires consumers to choose between sacrificing their progress” and “switching to a less expensive product.” 

For this reason, the FTC contends that some consumers may choose to stick with the more expensive product, even when it’s not needed. Some of these customers are misled into choosing the more expensive product to begin with.

H&R Block free tax filing 

Deceptive “file for free” advertisements are also part of the FTC complaint. The agency says H&R Block has been running deceptive ads for years. Although the company made some changes to its advertising last tax season, what the FTC describes as vague statements and hard-to-find information continued to mislead consumers into thinking they could file for free when they didn’t qualify. 

According to the complaint, “Only after consumers are partway through preparing their tax returns does H&R Block disclose that many consumers do not qualify to use Free Online, and must upgrade and pay.” 

Essentially, some of these taxpayers may choose to upgrade simply because they already spent a significant amount of time and effort preparing their return. However, these consumers might not have chosen H&R Block if they knew they couldn’t file for free in the first place.

H&R Block lawsuit

H&R Block denies the FTC's claims and filed a lawsuit against the agency in mid-March, claiming that using administrative law judges to issue findings for cases violates the U.S. Constitution. 

This is not the first time that federal agencies’ use of administrative law judges has been challenged. The U.S. Supreme Court is expected to  issue a ruling by the end of June on a similar case involving the use of administrative law judges by the U.S. Securities and Exchange Commission. That ruling could impact the FTC's case against H&R Block  —  and the use of administrative law judges in other federal agencies.

H&R Block vs. TurboTax 

Intuit’s TurboTax is a popular alternative to H&R Block’s online tax preparation products, but both companies have been the focus of FTC complaints. As Kiplinger has reported, a recent FTC order found that TurboTax free filing ads misled customers into thinking they were eligible to file for free. Intuit is appealing the FTC’s findings.

That order followed a $141 million Intuit TurboTax settlement, last year, which stemmed from allegations of consumers paying for products after being tricked into believing they were filing for free. 

Free tax filing

TurboTax and H&R Block aren’t the only options for free tax filing. Through IRS Free File, eligible taxpayers can file their federal tax returns free of charge.

• Taxpayers with an adjusted gross income (AGI) of $79,000 or less for 2023 qualify to file using guided tax preparation software with one of the IRS’ partners.
• Free state tax preparation and filing is available to some taxpayers who qualify to file through an IRS partner.
• There is no income limit to use another IRS option, Free Fillable forms. However, no guidance or state preparation is available with that system.

The IRS also recently launched a free Direct File pilot this tax season, which allows eligible taxpayers to file their returns directly with the agency. Direct File has been limited to select taxpayers in 12 states, but the IRS is starting to expand access to the program.

Note: This article has been updated to include information about H&R Block's lawsuit against the FTC.

Related

• Free IRS Direct File Pilot Program: Who's Eligible?
• Tax Season is Here: Seven Big IRS Changes to Know Before You File
• FTC: Intuit TurboTax Free Filing Ads Are Deceptive
• TurboTax Settlement Checks Sent to 4.4 Million Customers

For the 2025 tax filing season, the IRS will offer its new tax prep and filing service where taxpayers can bypass accountants and popular software and file their federal tax returns directly with the agency — for free. Last year, the IRS Direct File limited program pilot was available to selected taxpayers in 12 states. Now, the IRS plans for the program to be permanent, now offering it to taxpayers in 25 states.

“The IRS is committed to delivering significantly improved services by providing taxpayers with tools, information, and assistance to make it easier to comply with their tax filing obligations,” Commissioner Danny Werfel stated in a statement about Direct File.

Meanwhile, tax preparation companies H&R Block and Intuit's TurboTax have opposed the IRS getting into the tax preparation business and have lobbied against the idea for years.

Recently, both companies faced criticism and formal complaints from the Federal Trade Commission (FTC) for alleged deceptive advertising practices regarding their tax-free filing services and products. (More on that later.)

Related: H&R Block Faces Hefy $7 million FTC Fine

IRS Direct File program

• Last year, the IRS completed its Direct File pilot for the 2024 tax filing season.
• Twelve states, mostly those without income tax (Arizona, California, Florida, New Hampshire, New York, Nevada, Massachusetts, South Dakota, Tennessee, Texas, Washington, and Wyoming) were part of the initial limited 2024 program.
• The agency says 70% of taxpayers surveyed expressed interest in a free IRS-provided tool for preparing and filing taxes.
• IRS data revealed that people spend an average of about $250 to prepare their taxes.

As mentioned, for the current 2025 tax filing season, the following 25 states will participate in the IRS Direct File program.

Alaska, Arizona, California, Connecticut, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin, and Wyoming

The IRS estimates that over 30 million taxpayers within these 25 states will qualify to use Direct File in 2025.

Not the same as Free File

It’s important to note that this is not IRS Free File. The proposed Direct File service would be different from IRS Free File. (That program is designed for people with income under $84,000 for the 2024 tax year.)

On the other hand, this IRS-run tax prep and filing service will ultimately be available to a wider range of taxpayers with generally uncomplicated returns and incomes up to around $200,000. The agency says it is designed to be as easy or easier to use than traditional tax prep software. But like IRS Free File, the IRS Direct File tax prep service is also electronic and free.

In addition to considering the feasibility of a Direct File system, a key IRS report focuses on taxpayer opinions and costs and contains independent analysis.

According to the report, potential benefits and challenges associated with the implementation by the IRS of a Direct File program include:

• Improved experience and cost savings for some taxpayers who currently spend money to file their taxes either with accountants or using tax preparation software.
• Operational challenges like having in-house technical expertise and sufficient customer service to support Direct File.
• Eventually, the IRS will also have to figure out how to coordinate with more states — many taxpayers are used to filing their state and federal taxes at the same time.

Of course, there’s also a question of trust. The agency acknowledges that taxpayers may question IRS motives in offering a Direct File tool. People also worry about the tool impacting IRS audits and future tax enforcement.

The IRS indicates that younger people who prepare their own tax returns might be interested in Direct File.

Additionally, according to the report, taxpayers who were shown a “functioning internal prototype of Direct File, developed for research purposes, reported that the software exceeded their expectations in terms of ease of use and simplicity.”

IRS Direct file a threat to TurboTax and H&R Block?

Intuit, maker of TurboTax, previously indicated that a potential IRS tax prep service could pose a business threat. In past SEC filings, the company reportedly wrote, “We anticipate that governmental encroachment at both the federal and state levels may present a continued competitive threat to our business for the foreseeable future.”

In recent years, Intuit settled a lawsuit over allegations that the company “tricked” taxpayers into paying for its tax software when they thought they were receiving a free version. However, as Kiplinger previously reported, in agreeing to the $144 million TurboTax settlement, Intuit did not admit wrongdoing.

Earlier last year, the FTC found Intuit TurboTax engaged in deceptive advertising of its tax-free offerings. Intuit reportedly appealed the finding.

Meanwhile, H&R Block was also the subject of an FTC investigation for improper customer data handling and deceptive advertising. The company has previously supported proposed legislation that would have effectively banned the IRS from offering certain tax filing services.

Since the launch and expansion of the IRS Direct File program, the stock prices of Intuit (maker of TurboTax) and H&R Block have experienced some downward pressure.

For example, in November last year, H&R Block shares tumbled 8.2%, while Intuit shed 5.1% following reports that the incoming Trump administration was considering developing a free tax filing app.

Also, just before the IRS Direct File pilot report was released, Intuit stock (INTU) fell to its lowest point that month, and H&R Block stock (HRB) was down 4.8%.

However, it’s hard to say whether the government-run tax prep service can compete with or harm similar services provided by those companies.

Meanwhile, last year, the IRS announced that the Direct File program will be permanent. But an issue is whether the incoming Trump administration and a Republican-controlled Congress will maintain the program.

And...some will be concerned about the cost of running Direct File. Preliminary estimates indicate that the IRS tax prep service could cost between $64 million and $249 million a year, depending on the number of taxpayers using it.

Related Content

• FTC: Intuit TurboTax-Free Filing Ads Are Deceptive
• IRS Free File Is Now Open: What to Know
• H&R Block Faces Hefty $7M Fine: What It Means for Taxpayers
• How the IRS Will Use AI During Tax Season

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Links mentioned in this episode:

• How to File Your Taxes for Free
• 7 Money-Smart Ways to Spend Your Tax Refund
• Earn 7.12% With Series I Bonds
• Amy Domini on the Secrets of Sustainable Investing
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Transcript

David Muhlbaum: Environmental, social and governance investing is hot these days. So much so that we at Kiplinger now have our own editor on the beat. Ellen Kennedy will share her insights about the intersection of investing and activism. Also, how to spend that tax refund wisely, coming up on this episode of Your Money’s Worth.

David Muhlbaum: Welcome to Your Money’s Worth. I’m kiplinger.com’s senior editor, David Muhlbaum, joined by my co-host, Kiplinger senior editor, Sandy Block. How are you doing, Sandy?

Sandy Block: I’m good. Finishing up my taxes right now. Did you file yours yet, David?

David Muhlbaum: Me?

Sandy Block: You said you were going to get them done this year before the deadline.

David Muhlbaum: I think it’s going to be close. I’ve roughed out a version of them. I imagine I’m going to pay what’s owed and get the extension. So at least I won’t be paying penalties for late payment. There may be domestic penalties, but I’d rather not get into that. On the bright side, I did file both of my kids’ tax returns and we, that meaning me and my kids, had a little discussion about how to claim exemption from withholding in the future, so at least someone got a little education. Actually also, I used IRS Free File so I guess I got some education too.

Sandy Block: So tax teachable moments for you and your kids. We certainly pushed IRS Free File here enough, so what did you think? What’s your review?

David Muhlbaum: You’re asking me to review software? You’re the one who reviews tax software. Well, first of all, as you know well, IRS Free File is an expression, it’s a phrase, it’s a marketing term that we and others use to get people to those filing software options that are actually free, so long as you meet the income and other requirements. IRS Free File isn’t a piece of software itself. It’s like a program. So there are many and, of those, I chose TaxSlayer. And I guess I’d say the one thing I noticed that was different from when I’ve used, shall we say, full-pay versions of TurboTax and others in the past, was that the Free File version of TaxSlayer did not offer me the ability to log into brokerage accounts and things like that to get information directly imported electronically. And that meant I had to copy and paste, sometimes even look and retype and, as we know, that’s a way to make mistakes and is tedious.

Sandy Block: Yeah, and actually TaxSlayer has gotten pretty good reviews from us, but I suspect you have to upgrade the premium to get that service, which tells us that you get what you pay for. TurboTax and H&R Block basically dropped out of Free File so the most popular tax software versions aren’t even available there anymore. So on the one hand, you get to file for free. On the other hand, you may not get all the bells and whistles you’re used to if you pay.

David Muhlbaum: Duly noted, and we should probably move on because, well, when this episode drops, it will be after that filing deadline and the only people still mucking around in software will be clowns like me who missed it. But we’re still in the tax season in a way, because now we’re in potentially the happy side of tax season, refund time.

Sandy Block: Well, refund checks or more hopefully and likely, direct deposit. And we certainly understand that this isn’t anything other than getting your own money back because you’ve given an interest-free loan to the government, but people still love their refunds. And a fat refund is probably a sign that you should consider adjusting your withholding, which you do with a W-4 if you’re an employee, but maybe that’s another-

David Muhlbaum: Yes! That’s what I went over with my kids.

Sandy Block: That’s right. Don’t give the government all your money. All right, it’s too late to do that for 2021 so let’s just talk for a minute about what to do with that fat refund. And as we’ve mentioned before, refunds are up in part because of the various stimulus programs like the enhanced child credit. While generally the goal of those was to get money out quickly, depending on how some people access them, some people didn’t really get to claim their full credit until they filed their taxes, which means a bigger refund for them.

David Muhlbaum: Okay, so I’m sure we’ve got some good solid Kiplinger eat your broccoli ideas about what you should do with that refund.

Sandy Block: We sure do, and I guess the takeaway is make your refund work for you. So I think the number one thing would be, if you’ve got any high-interest credit card debt, you want to pay that down. Interest rates are going up. The fed has pretty much put on billboards, “We are raising interest rates.” That’s going to raise the amount you��re paying on a balance on your credit card. Pay off your balance. You get a 15% return or more, you can’t get that anywhere else, so that’s number one. Build up your emergency fund is another one, and you may want to invest it because many brokerage firms will now let you open an account for less than $500 and some have no minimums at all.

David Muhlbaum: A brokerage account, or you could invest directly with Uncle Sam. You could turn that money right back around and go get you... What is the bond-

Sandy Block: The I bond.

David Muhlbaum: The I bond that’s paying 7.12%.

Sandy Block: And it’s going to go up-

David Muhlbaum: For now, for now.

Sandy Block: It’s going to go up above 9%.

David Muhlbaum: Okay, I’m going to get myself one of these. I’m going to do this as a reader service or a listener service. I’m just going to go get myself one and I’ll report back on the process.

Sandy Block: Yeah, we’ve got to talk about this.

David Muhlbaum: Yeah, okay. There are other ways that you can put that refund to use and Sandy’s delineated many more of them in... What’s it called, Sandy, the slideshow?

Sandy Block: This is a Kiplinger special. It is Seven Money-Smart Ways to Spend your Refund.

David Muhlbaum: That’s right. Do not blow it at the racetrack. Coming up next, we’ll be joined by Ellen Kennedy, Kiplinger’s editor for environmental, social and governance investing. She’ll help us decode ESG. Stick around.

Decoding ESG Investing with Ellen Kennedy

David Muhlbaum: Welcome back to Your Money’s Worth. Joining us for our main segment today is Ellen Kennedy, an associate editor for Kiplinger with a long history in the ESG space, as the jargon goes. She was an ESG manager and analyst at Calvert Investments for 15 years covering environment, climate, consumer staples, and she served on the sustainability councils of several Fortune 100 and Fortune 500 companies. She’s filed shareholder proposals on supply chain and issues like that. She served on ESG boards and councils. Real hands-on stuff. And now she’s writing for us here at Kiplinger with articles that do a great job unpacking all these acronyms we find in environmental, social and governance investing. ESG is just one of them and I think you’ll find her articles interesting, whether you’re grappling with what is this ESG stuff about really? Or maybe you’re already deep into the topic and you’d appreciate her interview with Amy Domini of Domini Impact Investments, who is a true pioneer in ESG. So welcome, Ellen.

Ellen Kennedy: Thanks for having me.

David Muhlbaum: And a welcome back also to Kyle Woodley, senior investing editor for kiplinger.com who helped bring Ellen to Kiplinger. He’ll be co-hosting with me today. Sandy Block is going to give ESG a pass.

Kyle Woodley: Hello, hello.

David Muhlbaum: So to move from who Ellen is to what she knows, I’m going to start with a definitional question. The term we’ve headlined this podcast with is ESG, environmental, social and governance investing. But let’s wade a little bit into history. When you started in this field, Ellen, it was called social investing, socially responsible investing. Can you take us back a bit please?

Kyle Woodley: Wait, did he just ask you to define the history of ESG in 30 seconds? Good luck with that.

David Muhlbaum: No, no. You’ve got a whole minute. You’ve got a whole minute.

Ellen Kennedy: Okay. Well, back in the 1980s, religious groups and human rights activists started to realize that capital markets, the stock market, are a powerful tool to bring about change. So a handful of firms, like Amy Domini’s that you just mentioned, dedicated to socially responsible investing or SRI, they set the table for a way investors could avoid industries they found distasteful or unsustainable like tobacco. And they also tried to work with these activists to pressure corporations to change. So SRI investors were asking the question, how can we use investing to maximize positive impact in the world?

David Muhlbaum: So investors, they were part of the fight against big tobacco?

Ellen Kennedy: That’s right, David. And as SRI investors became more and more successful, the mainstream investors sat up and took notice. They realized that some sustainability issues really could affect a company’s bottom line or what we call material, and so environmental, social and governance or ESG investing was born in the mid 2000s. They asked the question, how can we harness sustainable opportunity or risk to improve performance?

David Muhlbaum:

They being investors?

Ellen Kennedy: Yes, the ESG investors. Yes, so nowadays we have this huge mosaic of many, many sustainable investment approaches. ESG has two levers it can pull. If you imagine a box with two up and down vertical levers in front of you, the first one is deciding how much you want to invest to avoid risk versus seize opportunity. So all the way at the top of that lever, your ESG fund will avoid investing in the dirtiest companies. And if you pull that lever chunk like in an old voting booth, it will focus on a theme like renewable energy or investing in industry leaders.

The second lever is how much the fund will try and influence a company through engagement or advocacy. So on one extreme, a fund could do nothing at all to encourage the companies that it holds to be more sustainable. And on the other hand, if you pull that lever all the way, it could meet with corporate leadership or even file shareholder proposals. There are so many combinations of these two continuums, so the mantra is ESG is not a monolith.

David Muhlbaum: Well, thank you. The history is important here, because ESG is not something that came out of nowhere. There was John Wesley, the Methodist minister, he was telling his people in the late 18th century, don’t invest in liquor, don’t invest in gambling, that sort of thing. So I think there’s also a religious component to the history.

Ellen Kennedy: It goes back to the Bible!

David Muhlbaum: We might just have been calling it differently, but language matters. So now that we’ve said, ‘Here’s what it is,’ I guess my first question would be what do you think is the biggest misperception about ESG investing?

Ellen Kennedy: Definitely that you have to sacrifice returns for gains. And most studies have shown, however, that you will do as well as or better than traditional investment approaches. Last year, there was this huge, ginormous — That’s a technical term — study looking at over a thousand other studies on the stock market performance of companies with high ESG scores. It found that a majority, 58% of the time, companies that embraced ESG beat the performance of non-ESG companies. ESG laggards beat the stock performance of ESG-embracing corporations only 8% of the time and the remaining studies showed mixed results. So again, that score was ESG 58%, non-ESG 8%.

Some other really interesting findings that came out of that study were that ESG is more likely to outperform over longer time horizons, and ESG can provide a hedge against economic or social crises. And I’d say we are facing several of those major crises these days.

David Muhlbaum: No doubt. We live in interesting times. So beyond tracking performance trends on the macro scale, Ellen, you also write about new wrinkles in ESG investing, and one that caught my eye were these mutual funds or exchange traded funds that link your investment to a charity. Let’s say you want to support an organization like the National Wildlife Federation, well, you can invest in a fund with their name on it. But here’s my question, it’s not so simple you say, or rather, these funds are not all cut from the same cloth. We don’t have time to rank them all. That’s what your article is for. But what should someone who’s trying to do good and get a good return with one of these linked funds be looking for?

Ellen Kennedy: There are a growing number of funds that donate a portion of their fees to a specific charity, and in some cases they even construct the portfolio to match the goals of the fund. So in a way, you can have your cake and eat it too. For example, the Simplify Healthcare ETF whose ticker is PINK (PINK) is actively managed by Michael Taylor. He’s a really fascinating guy. He’s a virologist who also has deep experience in biotech and also is a highly regarded hedge fund manager. Simplify is donating all of its net profits from managing the fund, or a minimum of $100,000 per year, to the Susan G. Komen Foundation for breast cancer research. The fund is in the top quartile for its category year to date according to Morningstar, so it’s really interesting to look at this.

David Muhlbaum: So to break this down, in this case, in PINK, is the fund invested in companies that are trying to solve breast cancer?

Ellen Kennedy: So remember those two levers I spoke about earlier, this actually doesn’t use an ESG screen per se. It just invests in really solid biotech healthcare stocks. It doesn’t focus on breast cancer or even on women’s health. It just uses Michael Taylor’s knowledge of that sector, which one could argue is a beneficial sector for social good and so that’s the ESG investing slant, but they don’t call themselves an ESG fund per se. And then it has this minimum $100,000 donation as well.

David Muhlbaum: Got it. So he, as a fund manager, is basically taking some of his earnings from being a fund manager and apportioning it to the Susan G. Komen Foundation?

Ellen Kennedy: Yes.

David Muhlbaum: And your returns are what you get from his fund?

Ellen Kennedy: Yes.

David Muhlbaum: Okay, got it. But there are some other funds that where the fund itself is choosing investments based on the charity with which it’s affiliated?

Ellen Kennedy: Sure. So there are a number of funds that try to combine an ESG screen that would favor what a nonprofit is trying to accomplish in the world with a donation as well. So one example that’s really interesting is the Impact Shares NAACP Minority Empowerment ETF. The ticker on that one is NACP.

David Muhlbaum: So like the charity minus one A. Right.

Ellen Kennedy: Minus one A, yes. So they actually have worked with the NAACP to design the fund. The only screen really, as I recall, is for racial equity and they then hired somebody from the NAACP who has a very deep experience in what’s called DEI or diversity, equity and inclusion to work with impact shares to talk with companies and to say, “Hey, we really want you to be in this fund. And it’s a real sign of your commitment to NAACP values to be in this fund, but you’re not quite there yet. Here’s the changes that you need to make.” So they’re really reaching out to companies and actively trying to change their policies and programs to align with those goals.

David Muhlbaum: And backing it up by saying, “Do this and we will buy your shares.”

Ellen Kennedy: Exactly, yes. So these are very attractive funds but before you invest, there’s a few things that you have to look out for as you can imagine. It would be very easy for these kind of funds to just be a marketing ploy. So you have to ask yourself is this fund designed to bring a positive impact to the cause it supports? And the example that I just gave of NACP is an example where they are trying to do that. You can also ask yourself is the company that manages the fund dedicated to sustainability? Does it actively partner with a nonprofit group it benefits to bring about change like I just mentioned? And also does the fund vote shareholder proxies or file shareholder proposals to help the nonprofit’s cause? And most importantly, make sure you’re not investing in these funds just because they donate to the charity you like. That’s just not a good way to focus your donations or your investments.

David Muhlbaum: Well, they make the donation to take the tax deduction as opposed to you. It seems a little odd, yes.

Ellen Kennedy: Exactly. And we are limited now in the amount of tax deductions we can take so this might be a way for people to have more of an impact in terms of their donations.

David Muhlbaum: Oh, that’s a good point.

Ellen Kennedy: But still, this is an investment and you need to treat it as such. You should make absolutely sure that the fund is a solid investment that fits with your own personal portfolio and your investment goals.

David Muhlbaum: Got it. Okay, we’ve talked about PINK, the ticker, and we’ve talked about green because the first word in ESG is environmental so I use that as a proxy for the color. But there’s a new color on the block too and that’s blue. So we had a piece in Kiplinger’s personal finance magazine recently about the blue economy and so, Ellen, what’s the blue economy?

Ellen Kennedy: I see what you did there with those colors. That was very clever.

David Muhlbaum: Thank you.

Ellen Kennedy: So the blue economy refers to all of the dollars spent to improve the economic health and livelihood of oceans and coastal zone ecosystems. So think about everything related to oceans which cover 70% of the world’s surface. They’re huge, but also that section of the earth where the oceans come up to the shore and we interact with them there. So we often just forget about oceans. They’re really critical to our survival and also for healthy economies. We’ve been dumping plastic and toxics in the oceans. We’ve been overfishing and removing coastal plants that help buffer the effects of hurricanes. I’ve experienced that personally because my husband is from New Orleans and the loss of so much of coastal zones in those areas that had been planted or had wild habitat there acted as a buffer to hurricanes. But when those were taken out, Hurricane Katrina, of course was able to exact a real toll on that area.

David Muhlbaum: So blue is not water, but ocean. That’s one of the key distinctions, because there are water funds out there, right?

Ellen Kennedy: That’s right, there’s a ton of water funds out there. I actually used to manage the sustainability side of one of them, but they’re often filled with utilities and water infrastructure companies and they don’t focus as much on the conservation solutions. One interesting company we’ve profiled recently is called Danimer Scientific (DNMR). The ticker is D as in dog, N, Nancy, M-R. It is developing a kind of plastic that is 100% biodegradable and compostable. It’s a small company that IPO’d in 2020 and is still proving that it can turn a profit and scale up, but it has already scored valuable customers like PepsiCo and Walmart.

David Muhlbaum:

Okay, so Danimer Scientific doesn’t handle water or oceans, but because their product is aimed at helping the oceans, that’s how they got on the list. So this screening and thinking, it also governs a much longer list that we have at Kiplinger, the Kiplinger ESG 20. Now, we rolled this out in 2021 and it’s 15 stocks and five funds that do well on meeting environmental, social and corporate governance challenges. Good corporate citizens. So Ellen and Kyle, I was hoping you guys could call out one or two from that list, which we’ll link to, but you know there are 20, so Ellen?

Ellen Kennedy: One of the stocks that I like from the ESG 20 may surprise you, it’s called Clorox.

David Muhlbaum: No, I never heard of that.

Ellen Kennedy: The ticker is C-L-X and most of us think, ‘Oh, gross. It’s bleach. It’s environmentally terrible. Why would Clorox be in the ESG 20?’ Well, first of all, aside from the environmental issues, it’s a really good pick on governance. They’ve done a good job of diversifying their board of directors. 42% of its members are women and four members are people of color. And the board is also independent, which is a great metric for understanding how a company has tried to shape its board in a way that will benefit investors and shareholders. I used to cover the household products and personal care products industries. And I remember the bad old days when Clorox was really a laggard in this area, but they did a lot of work to clean up their act and to get more involved in green chemistry. For example, if you go on a website called the Skin Deep database of the Environmental Working Group-

David Muhlbaum: Skin Deep?

Ellen Kennedy: Yeah, that’s right. Skin Deep. They provide ratings on the toxicity of thousands of different products. And so, for instance, you can find products made by Clorox that score very well because they are, for instance, bleach-free hand sanitizers. They also acquired Burt’s Bees which you may think of as a green company. And overall they’ve really worked to think about the life cycle of those products and ensure that they are just much more environmentally responsible than they used to be from cradle to grave.

David Muhlbaum: Yeah, that’s interesting. Kyle, I think we ought to look to you for a fund.

Kyle Woodley: Yeah, so if you just prefer to buy a bundle of ESG-friendly stocks and let it ride, one ESG 20 option is the Putnam Sustainable Future ETF. That’s ticker P-F-U-T, and this is an actively managed ETF whose companies either make products or provide solutions to sustainability challenges. Top holdings include science and tech from Danaher, that’s ticker D-H-R. There’s Chipotle Mexican Grill, ticker C-M-G, and that’s long been a pioneer in sustainable food sourcing. And it even holds MSCI, ticker M-S-C-I of course, which is the top global provider of ESG indexes, so there you go.

David Muhlbaum: That’s very inside, that they-

Kyle Woodley: There’s a little meta there, isn’t there?

David Muhlbaum: We’ve mentioned Amy Domini’s name a couple of times so far, and we’ve done so in part because you, Ellen, got to interview her recently. So tell us a bit more about who she is, what she’s done.

Ellen Kennedy: So I’m an Amy Domini fan girl, as I think a lot of people who came out of the SRI industry are. She’s someone I’ve admired for years. She pioneered SRI investing way back in the 1980s by founding Domini Impact Investments which is still growing strong. And she did all this as a woman in a field that was very male-dominated back then. What I appreciate most about her is her clarity. She helped develop the concept of triple P investing or investing for people, planet and profit. And she recommends avoiding companies that spell trouble in those three areas. Very simple, invest in triple P, and she’s always looking out for the next sustainability opportunity around the corner. She’s especially bullish these days on healthcare and transportation innovations, so check out my interview with her.

David Muhlbaum: We’ve gone in a number of directions with ESG. There are many more we can go to. We’ve got to keep an eye on the clock, but one of the things that just lurks in the back of my head that I want to ask Ellen before we go is, there’s a phenomenon where writing about/discussing ESG investing generates negative feedback. Is that a fair enough term for it? What is it about ESG that frankly gets some people so riled?

Ellen Kennedy: Well, I think first of all, as I said, ESG is not a monolith. It’s many things, but overall I think there’s a lot of misunderstanding about how ESG has become professionalized. And as we know, it could use more standardization but it’s getting there. And so people often read into ESG, I think, political opinions. It’s to try and find those metrics that will deliver the best return for shareholders and that’s really all there is to it. It just so happens that a lot of the metrics that were ignored by shareholders for many years are these things that lead us to a more sustainable world.

Ellen Kennedy: I actually often think of ESG, I know Kyle is also a nerd, I think of it like a Tardis, like a time machine from Dr. Who, a big red telephone box that you can get into and you can set your course for the future. And if you look at the major trends going on, a lot of them happened to be sustainability trends, climate change, water issues that we’ve talked about, equity issues we’ve also talked about, along with those other thing that investors have considered for many years, like population growth or geopolitical risk. So I really think that when people dig into the way ESG is conducted, they’ll see that it really just makes business sense and that is why so many people are turning to it now and why it’s so popular.

Kyle Woodley: Well, being a fellow nerd, I’m going to have to point out, the Tardis is blue. It is not a big red box. It is a big blue box. And sorry, ladies, I am not available. Sorry.

Ellen Kennedy: I am mortified. I thought it was red. Thank you so much. I stand corrected.

David Muhlbaum: Okay. Well, we’re sure if that’s all we have to worry about, we’re in great shape. Thank you so much for joining us today, Ellen. We really appreciate your insights and all you’ve brought to ESG coverage for Kiplinger. Thanks again.

Ellen Kennedy: Thank you. My pleasure.

David Muhlbaum: That will just about do it for this episode of Your Money’s Worth. If you like what you heard, please sign up for more at Apple podcasts or wherever you get your content. When you do, please give us a rating and a review. And if you’ve already subscribed, thanks. Please go back and add a rating or review if you haven’t already. To see the links we’ve mentioned in our show, along with other great Kiplinger content on the topics we’ve discussed, go to kiplinger.com/podcast. The episodes, transcripts and links are all in there by date. And if you’re still here because you want to give us a piece of your mind, you can stay connected with us on Twitter, Facebook, Instagram, or by emailing us directly at podcast@kiplinger.com. Thanks for listening.

Last year my mother told me it was time to start doing my own taxes. I panicked at this thrust into adulthood. But, with a beer in hand, I persevered and learned two things: Freelancing and moving across the country make filing your taxes more complicated—and more expensive.

Software with strings attached. Many millennials can file their taxes free. The IRS’s Free File program partners with tax software giants such as H&R Block and TurboTax to offer free online tax preparation for taxpayers who made less than $66,000 in 2018. (The big tax software providers also offer their own free versions for taxpayers with straightforward returns.)

However, even if you meet the income requirement, you may be disqualified from free filing if, say, you made (or lost) money trading stocks or you contributed to a health savings account. For example, H&R Block’s Free File program lets users file a federal tax return and up to three state returns at no cost. But if you made money from a side gig or have investment income, you’ll be prompted to use the Premium version, which can cost between $50 and $70 to prepare and e-file a federal return and $36.99 for each state return. Before you start plugging in numbers, read the fine print and disclaimers for the software.

Overlooked write-offs. The new tax law nearly doubled the standard deduction for single filers, to $12,000 (it’s $24,000 for married couples who file a joint return). Even if you take the standard deduction, you could still qualify for money-saving tax breaks.

For instance, if you’re paying off student loans, you may be able to deduct up to $2,500 a year in interest. The interest deduction is phased out as you climb the income ladder, and single filers are locked out of this break if their adjusted gross income (AGI) is $80,000 or more.

If you had a ton of unreimbursed medical expenses last year because of, say, a catastrophic illness, you may be able to deduct them, but you’ll have to itemize. And you can only deduct expenses that exceed 7.5% of your AGI (that will rise to 10% in 2019).

The tax overhaul eliminated a great tax break for millennials and others who relocate for a new job—and one I neglected to claim in 2016. You can no longer deduct your moving expenses unless you’re an active member of the military. If you made the same mistake I did in 2016 (or moved in 2017 and failed to claim the deduction), you could file Form 1040X with the IRS to claim the moving expenses. You’ll need your original tax return and accompanying documents, plus the receipts for your moving costs. The deadline to file an amended return is three years after your original filing deadline.

Don’t overlook tax breaks from your state or city. In the District of Columbia, some of my colleagues are eligible for a tax credit of up to $1,025 for residents who made less than $51,000 in 2018 and lived in D.C. for the whole year. Minnesota offers a tax credit of up to $2,150 for single renters who made less than $61,320 in 2018.

If you’re feeling overwhelmed and don’t qualify for the free programs, it’s probably worth it to pay for tax software. The programs also generally have live chat boxes and explanations that will guide you through the process. If you’d rather entrust your taxes to a human, you could hire a tax preparer, but the average cost for preparing a tax return is $216, according to a survey by the National Association of Tax Professionals.

I’m filing with H&R Block Premium again (for a total cost of $124) because I earned a little bit of freelance income in 2018 and need to file a federal and two state returns. I don’t qualify for the Maryland renter’s tax credit, and I have no interest to deduct on any student loans. I have until Tax Day 2020 to file an amended 2016 return to claim the now-defunct moving deduction, but I’m not sure it’s worth trying to recreate the return and find all my documents. That was three years ago, and I didn’t keep the receipts.

The picks below are part of Kiplinger’s Personal Finance’s annual Best List, a roundup of the best values in all the areas we cover – from funds, stocks and ETFs to credit cards and bank accounts to cars, college, kid stuff, phone plans, travel and health. Discover all our Best List picks here.

Kiplinger's Best List, 2016

• Best Mutual Funds You Can Invest in for $125 or Less
• Best Mutual Funds for Dividend Investors
• Best Mutual Funds for Rising Interest Rates
• Best Mutual Funds for Investing in Value Stocks
• Best Stocks for Yield at a Reasonable Price
• Best Online Brokers
• Best Rewards Credit Cards
• Best Deals in Online Banking
• Best Personal-Finance Websites, Apps and Software
• Best New Car Values
• Best Shopping Websites and Apps
• Best Ways to Save Time and Money on Travel
• Best Package Tours for Your Money
• Best Travel Discounts for Seniors
• Best Phone Plans for Every Type of User
• Best Websites and Tools to Save on Your Health

Free credit sites

At CreditKarma.com, sign up to see VantageScore scores and credit report information from credit agencies Equifax and TransUnion. Plus, get alerts of changes to your TransUnion report, such as a new credit card or loan account. To see your FICO score, create an account with Discover’s Free Credit Scorecard. The service is available to all, not just Discover card customers.

ID theft prevention

News that hackers stole user information from at least 500 million Yahoo accounts in 2014 underscores the importance of using strong, diverse passwords and up­dating them regularly. Dashlane is a password manager that collects and stores passwords for websites you visit. The Password Changer feature allows you to automatically generate new passwords for eligible sites all at once (bank and e-mail accounts, however, weren’t on the list recently). With the Premium version ($39.99 annually), sync Dashlane across multiple devices and back up your account to the cloud.

Way to check out a charity

Charity Nav­igator analyzes the financials of more than 8,000 charities and gives star ratings based on financial health (it recently updated its methodology) and on accountability and transparency. It’s easy to search for charities to support; the top-rated ones are listed by category, including charities that focus on recent natural disasters.

Online tax software

TurboTax makes the tax code understandable, which is no mean feat. It also allows you to import documents electronically from more than 1.4 million employers and financial insti­tutions. The biggest downside is cost. TurboTax Premier, which you must use to report investment income, starts at about $50 and rises throughout the filing season to nearly $80 (a state return costs $37 to $40). DIYers on a budget should consider H&R Block, which is also easy to navigate and doesn’t require an upgrade if you have investment income. Its Deluxe version starts at about $35 for early filers; a state return costs $37 to $40.

Personal finance games

Yes, it takes forever to finish, but Monopoly is about more than just real estate. Players need to make wise choices about saving and spending, assess their appetite for risk, and strategically negotiate with others. (Monopoly Junior is tailored to players ages 5 to 8.) Financial Football is an app (and online game) that’s adaptable to your age and skill level. Answering questions about banking, debt, ID theft and more determines how far you advance down the field.

Podcast

Stacking Benjamins applies a light touch to a variety of personal finance topics, including quirky investments, money habits that waste your time, and how to endure a time-share sales pitch without falling for it.

College savings plan

Invest in a 529 plan directly from your state if it offers a tax incentive—which will typically win out over lower fees in an out-of-state program. If your state doesn’t offer a tax break—or if you live in Arizona, Kansas, Maine, Missouri, Montana or Pennsylvania, which offer a tax break no matter where you invest—look for a plan that best suits your investing style. For example, for hands-on investors, we like the Utah Educational Savings Plan. For low fees, take a look at New York’s 529 College Savings Program. There’s no annual account fee and funds carry a slim, 0.16% expense ratio.

Student loan tool

IonTuition makes it easy to see all of the details of your student loans and evaluate repayment options. The site will also alert you if you miss a payment or your loan servicer changes. Its free chat feature connects you with loan counselors who can help you pick the best repayment strategy.

Has your tax return gotten just too complicated to handle on your own? Or maybe you just don't have the time to fill out all those forms. So now you've decided to bite the bullet and hire a tax pro.

If your tax situation is relatively simple, you probably can get by with a commercial preparer such as H&R Block or Jackson Hewitt. However, if your tax return will be complex, consider an enrolled agent -- a tax professional who is licensed by the IRS. Enrolled agents must pass a stringent three-part exam and complete 72 hours of IRS-approved continuing education every three years, says Gigi Jarvis, senior director of communications and marketing for the National Association of Enrolled Agents. Enrolled agents are authorized to represent clients before the IRS in the event of an audit.

A certified public accountant (CPA) is licensed by state boards of accountancy and must pass the Uniform CPA Examination. CPAs provide tax planning and preparation but also offer a range of other services. So this might be the professional to consider if you have a business or need year-round tax help. Another option is an accredited tax adviser or preparer, who receives credentials from the Accreditation Council for Accountancy and Taxation and must complete 90 hours of continuing education every three years. Both are qualified to handle returns for individuals and businesses, but tax advisers often handle more complicated issues such as estate planning.

Those are the various professionals who can help. Picking the appropriate type of preparer is the easy part. Actually finding the right person to do the job can be tough.

If you're thinking about enlisting the help of a professional tax preparer for the first time or are searching for someone new because you're not satisfied with the service you're getting from you current preparer, follow these five steps.

Step 1: Get a referral. Ask your friends, family and colleagues whether they can recommend a tax preparer. If you are new to an area, check with your state's CPA society, which should be able to help you find a CPA in your area, the Accreditation Council's Web site for an accredited tax adviser or preparer, or the National Association of Enrolled Agents' Find an Enrolled Agent tool.

Then narrow your list of recommended tax preparers down to two or three candidates, who you will then call or visit for an interview.

Step 2: Interview candidates. If you're trying to hire a new tax preparer in the midst of tax season, you might have a hard time finding someone who can sit down with you in his or her office for a long interview, warns Michael Eisenberg, CPA/PFS and founder of Eisenberg Financial Advisors in Los Angeles. However, most tax preparers should have time for a phone interview of 20 to 30 minutes. If they aren't willing to give you a few minutes on the phone -- or want to charge you for the initial interview -- then look elsewhere. "You want somebody who is willing to listen to you, hear what you're saying and answer your questions in plain English," Eisenberg says.

And here are some key questions to ask:

How long have you been in practice? You want someone who has been preparing returns long enough (i.e. several years) to anticipate problems or IRS challenges.

What are your credentials? Anyone can hang out a sign claiming to be a tax preparer because there are no licensing requirements. So look for an enrolled agent, accredited tax adviser (ATA), accredited tax preparer (ATP), certified public accountant (CPA) or CPA/PFS. Only a CPA can have the PFS, personal financial specialist, designation. Check your state's licensing board and professional associations (see step 1) to assure that he or she is licensed, is a member in good standing and has had no disciplinary action taken against him or her.

Do you have any specialties? This is important to ask if you have a specific need. For example, if you have a small business, you need someone who knows business accounting. Or if you have rental property, look for someone who has experience handling this sort of tax situation.

How much will you charge? Eisenberg says you probably won't get an exact number, but a tax preparer should be able to provide you with an estimate. Find out if he or she charges an hourly rate or flat fee and whether that fee will cover everything or will there be add-ons for planning meetings and calls throughout the year.

Do you have room for a new client? Or, more importantly, will you file my return in a timely manner? And will you have time to meet with me throughout the year?

Will you handle my return, or will you hand it off to a less-experienced associate? If the preparer is part of a firm and will not be preparing your return personally, ask if he or she will review it after the associate completes it.

Will you represent me before the IRS? "Run out the door if the answer is no," Eisenberg says. If you are audited, you want someone who will defend your return.

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Step 3: Watch for red flags. Steer clear of anyone who talks about cheating the IRS. Or a preparer who pushes you to take deductions, says you don't have to report certain income or promises to get a refund that will be a certain percentage of what you earn. Eisenberg also says you should avoid someone whose fees are based on a percentage of your refund. "If the preparer's fees are contingent on what you're getting back, he or she may bend the rules to get more back," he says.

Step 4: Mention any special circumstances. Let the preparer know about any events, such as a recent divorce or large lump-sum payment from a retirement plan, that will affect your tax situation.

Step 5: Pick a preparer. So maybe even after you've interviewed all your candidates, you're still not sure whom you want to hire or are nervous about handing over this important duty to someone else. After all, it's your signature on the form, and you're liable for the information on it -- regardless of who prepares it. "You need to bite the bullet and say, 'These people are professionals. They'll probably do a better job than [I will] because they know the law,'" Eisenberg says. Besides, you have to make a decision or your tax return won't get filed, he says. Just be sure to select an individual who will be available if you have questions months, or even years, after your tax return has been filed.

You've made your choice. Now what?

"Don't bring in a mess," Eisenberg says. If you take a shoebox of receipts and documents to the preparer, you'll be wasting his time and your money.

Compile summarizations of your income, expenses, cost basis of investments you sold, Social Security numbers for all dependents, a list of donations you made (and documentation if necessary). Plus, take all the tax-related documents you have received in the mail and tax forms sent to you by the IRS. "Make it as simple and clear cut for the preparer as you can," Eisenberg says.

Do not sign a blank return. "It's like giving a blank check to someone," Eisenberg says. Be sure you are satisfied with the return before signing it because you are responsible for its contents.

When the return is complete, make sure the preparer has signed it. "If they don't sign it, it should raise a red flag: Are they doing something they know is wrong?" Eisenberg says. Besides, paid preparers are required by IRS to sign a return.

Pros on the cheap

If you can't afford one of the tax preparers discussed above, you still can get some help from a professional -- for free.

Your first stop should be the IRS's Web site. There you'll be able to search for local services, including free help lines and walk-in centers. You can also try the IRS's national hotline, 800-829-1040, although you're more likely to be greeted with a busy signal than a helpful voice -- and phone lines will only get busier as tax day approaches.

Another source of free person-to-person tax help is the AARP's Tax-Aide program. IRS-trained volunteers complete your taxes for you. The service is available to middle- and lower-income taxpayers of all ages, and operates from local community centers between February 1 and April 15.

As part of Kiplinger's annual list of the best personal finance products and services, we picked the top money-management tools, from sites to help with budgeting and monitoring your credit to services that will help protect your identity . Be sure to see the complete list of our favorite investments, financial products, travel tools and more.

Budgeting Web site

Mint.com makes it easy to set up and stay on a budget. The free site securely tracks your financial accounts (you provide log-in info), alerts you when bills are due and monitors progress toward your financial goals. It also notifies you about unusual spending patterns.

Tax software

With TurboTax, you can electronically download W-2s and 1099s from thousands of employers and financial institutions, a time-saving feature that reduces errors (H&R Block tax software’s list isn’t as comprehensive). For tax year 2014, users can also arrange to be notified when their W-2 is available for download.

Person-to-person payments

Square Cash is free and easy to use, and users don’t have to register. You send cash from an account tied to your debit card to the recipient’s account securely via e-mail or text. Most payments are deposited in minutes.

Health care tools

Healthcare Bluebook calculates “fair prices” (the amount that providers usually accept from insurers) for hundreds of services searchable by zip code, and it offers tips on how to shop for better deals. GoodRx’s search engine estimates how much your prescription drugs cost at nearby pharmacies and flags generic options. Scheduling a hospital stay? Medicare.gov’s Hospital Compare looks at quality measures, such as readmission rates, in relation to state and national averages.

Free credit site

Drawing data from credit agency Trans­Union, Credit Karma provides your credit score and lets you access your credit report. It also monitors the report for suspicious activity. The tool’s “report card” offers tips on how to improve your mix of accounts and payment history to raise your score.

Immediate annuity

Payouts can vary a lot from company to company based on your age, sex, amount and type of payout. The best way to find out which insurers offer the highest lifetime payouts for you is to go to ImmediateAnnuities.com. It provides quotes for most of the top annuity companies.

Password manager

LastPass stores a plethora of passwords using military-grade encryption. A browser add-on save your log-in information on each Web site.

ID protection service

The TrustedID Essentials package ($125) a year or $14.99 a month) monitors your credit reports from the three major credit bureaus for suspicious activity, provides an Equifax credit score and scans black-market sites for your Social Security, credit card and bank account numbers. Plus, TrustedID helps you cancel and replace cards if you lose your wallet and provides insurance to help cover costs that you incur after identity theft.

If you need to lighten your work -- or stress -- load, let someone else do the heavy lifting. We have chosen eight professionals who can help make your life a little easier. Visit kiplinger.com/simplify for phone numbers and Web sites to help you find local professionals. The slide show navigation begins on your right.

A financial planner can help ease the burden of saving for retirement or college, or managing investments. Choose an adviser who is paid a set fee or who works on commission, or a combination of the two. Cost: $100 to $300 per hour (fee-only).

If you have a simple return but don't want to do it yourself, try H&R Block or another commercial preparer. Need more guidance throughout the year or have a complicated tax situation? Consider a CPA. Cost: H&R Block patrons pay an average of $170; a CPA could charge from $150 to $500, depending on your situation.

An agent provides one-stop shopping for your next escape and can be especially valuable if you are venturing to a faraway destination. Cost: about $30 per person for a domestic trip, or $60 if you're heading overseas or have an intricate itinerary (there may be no fee to book a cruise).

A claims assistant can review your medical bills and organize paperwork as well as file, track and challenge your insurance claims. Cost: $60 to $120 per hour.

When you can't be there, a caregiver can assist with daily tasks and errands, monitor medications and medical care, and provide companionship. Cost: $16 to $20 per hour.

These brokers sell insurance from multiple carriers, so they can shop for the best policy. And they will help when you need to file a claim. Commissions on policies are typically the same as when you buy directly from the company.

A consultant can identify schools tailored to your student's interests, enforce deadlines, and supervise (but not write) applications and essays. Cost: $175 per hour on average, or about $3,800 for a two-year coaching program.

this pro can tame your pack-rat tendencies, maximize closet space, help prepare boxes for a move or set up a system for filing paperwork. Cost: $40 to $200 per hour, or by flat fee per project.