“Disruption” is all the rage these days. Countless startups now sell themselves as disruptors – concepts perfectly positioned to shake up their industries and create immense value for consumers. Uber and Lyft are emblematic of successful disruption: They teamed up to popularize ridesharing, a brand-new form of transportation, bringing the taxi business to its knees.
TaxHub, a new online tax prep service that blends the user-friendly interface of online DIY services such as TurboTax with the expertise of professional (often in-person) preparation services, clearly aims to disrupt the tax prep industry. It’s a mobile-friendly cloud software platform that offers CPA-prepared tax returns at far less than the cost of in-person options (TaxHub claims to be 50% cheaper than the average in-person CPA), and a fraction of the time commitment of DIY online options.
TaxHub isn’t the only online, hands-off, CPA-run tax prep platform out there – Greanlight, another upstart, is very similar. But TaxHub is more competitive on price than Greanlight, and is worth a closer look for anyone who’s preparing their taxes on a budget.
It’s worth noting that TaxHub is a new, lean startup with just a handful of employees, compared with hundreds or thousands at “big boy” tax prep providers such as TurboTax and H&R Block. Though this never came into play for me, it’s not unreasonable to think that TaxHub’s relative lack of support could affect some customers, especially as the April 15th filing deadline approaches and demand for TaxHub’s services increases.
Also, take my advice here: On your first visit to TaxHub’s website, bookmark it. TaxHub, whose parent company (GB Taxportunity, LLC) is based in New Jersey, has the unfortunate distinction of sharing a name with several other businesses, some from as far away as New Zealand. These companies aren’t direct competitors, but they do confuse Google – when you search online for “TaxHub,” you encounter several false entries before the “real” TaxHub.
Plans, Pricing & Features
TaxHub’s approach to tax preparation is super easy and super convenient. It offers three plans, each of which involves a licensed CPA preparing your return. The preparation experience is identical across all three programs, and can be broken down into four steps.
- Plan Selection. To determine which plan is right for you, you can specify which of TaxHub’s generic life circumstances (single, married, kids/no kids, own/rent, and so on) apply to you. Once you check all the appropriate boxes, you’re shown the recommended plan. Alternately, you’re entitled to a free, no-obligation, five-minute chat with a TaxHub representative to go over the basics of your situation. When you select your plan, you’re given a flat-rate price estimate that will only change if your situation turns out not to be supported by the chosen plan. At no point do you have to walk through a lengthy online questionnaire.
- Upload Documents. After selecting your plan, you need to upload your tax documents, including any relevant income and expense statements, to your account. You can upload files directly to TaxHub’s secure server or take a picture of each document and text (SMS) it to a particular phone number.
- Conduct a Phone Interview. The next step is a brief phone interview to go over the particulars of your tax situation. You can schedule the interview, which is conducted with a licensed CPA (usually the person who prepares your taxes), from your account dashboard.
- Approve Your Return and Pay. After the interview, TaxHub goes to work preparing your return. At this point, all you have to do is wait for word that your return is finished – typically within 48 hours. You then have the opportunity to review and approve your return. If you approve, you’re asked to pay the quoted price, which may be different from the estimate if your situation turns out to be more complicated than previously thought and requires a plan upgrade. In rare instances involving a very complicated return, your final price may be higher than the highest advertised price.
Like most competitors, TaxHub has a maximum refund guarantee for state and federal returns. If you find another tax prep service that earns you a larger refund or lower tax liability, TaxHub promises to refund your preparation fees.
The Basic plan costs $85. That price includes your federal return and one state return. If you earned income in more than one state during the tax year, you need to upgrade to the Premium plan.
Basic is ideal for single filers or married couples with simple tax situations that can be completed using form 1040EZ or 1040A and don’t require any supporting schedules, including Schedule EIC (for the earned income tax credit).
The Deluxe plan costs $105, including your federal return and one state return. Again, if you received income in multiple states during the tax year, you need to upgrade to Premium.
Deluxe is ideal for taxpayers who need to itemize their deductions (using Schedule A) and claim child and dependent tax credits. However, it’s not ideal for people with substantial interest income, investments, self-employment income, and other complicated situations.
The Premium plan costs $135, including your federal return and multiple state returns. If you earned income in several states, perhaps through partnership shares or rental property income, TaxHub may customize your pricing at a higher rate.
Premium is appropriate for moderately to very complex tax situations, including those that involve multiple state returns, self-employment, small business ownership, farming activity, investing activity, and rental property ownership. If you need to file any major schedules other than Schedule A and Schedule EIC, Premium is your plan.
- Pay With Your Refund. TaxHub allows you to pay your preparation fees with your IRS refund. TaxHub doesn’t directly charge for this option, but you do have to accept a $15 bank charge that the company can’t control.
- Prior Year Returns. You can use TaxHub to file a previous year return, even if you didn’t previously prepare with TaxHub.
- Tax Return Copies. You can obtain copies of your current year and prior year tax return(s) by contacting TaxHub directly.
- Audit Defense. All TaxHub customers are automatically enrolled in the company’s Audit Defense service at no additional charge. Under this plan, TaxHub corresponds and negotiates with the IRS on your behalf during the audit process, while providing clear explanations and interpretations along the way.
- Messaging System. If you have any questions before or during the tax preparation process, you can use TaxHub’s internal messaging system (accessible through your account) to ask them. This system functions like email, and usually takes a few hours to a business day (sometimes less) to produce a response. Whenever possible, you’re connected with the CPA tasked with preparing your return.
1. Incredibly Simple Process
TaxHub’s tax preparation process is incredibly simple: You provide some basic information about your life situation, sign up for the plan that best fits your needs, upload your tax documents, conduct a brief consultation with a TaxHub CPA, and approve your completed return. You don’t have to pore over your documents, interpret IRS jargon, or sit through tedious questionnaires. This is a huge advantage over DIY tax prep services, which either hold your hand at every step of the process or require you to take ownership of the involved risks.
2. State Returns Are Included
TaxHub factors state tax return preparation costs into each of its plans’ prices, meaning you never have to pay extra for a state return here. If you need to fill out two or more state returns, you can simply upgrade to the highest-priced plan, which permits multiple state filings. This is a big advantage over most other tax prep options, which charge as much as $39.99 per state return.
3. Cheaper Than Some Other Full-Service Options
Although TaxHub is unquestionably more expensive than cut-rate DIY options such as FreeTaxUSA and TaxAct, it’s substantially cheaper than many other full-service options. Depending on the complexity of your tax situation, it can cost you anywhere from $150 to $400 to file in-office with Liberty Tax Service. Full-service online options, such as Greanlight, can cost more than twice as much as TaxHub (for instance, Greanlight’s highest-priced plan starts at $349, compared with TaxHub’s $135).
4. Can Upload Documents by SMS
TaxHub lets you upload your tax documents by SMS, rather than email attachment or fax. This is a handy little perk that’s virtually unique among American tax prep companies – and one that’s hugely advantageous to customers who can’t be bothered to break out their laptop or desktop computers (if they even have them).
5. Low Time Investment Relative to DIY Options
With no questionnaires or self-filled forms, TaxHub is a breeze compared to DIY competitors. Though the amount of time filers need to devote to the initial consultation and document upload processes lengthens as their situations grow more complex, the same law applies to DIY returns – the more information your return contains, the longer it takes to answer all those interview questions and fill in all those form fields. And, once you finish your initial consultation with your TaxHub preparer, you’re pretty much done with your end of the bargain.
Accordingly, the amount of time required to complete a TaxHub return is almost always less than the amount of time needed to complete a comparable DIY return with TurboTax, TaxAct, or H&R Block.
6. Mobile-First Website
Unlike TurboTax, H&R Block, and other competitors that began as desktop software programs, the much newer TaxHub started as a mobile-friendly, cloud-based service. Every part of its website is a pleasure to use on small-screened devices – there aren’t any sections that feel like they haven’t been updated since the first iPhone’s release, as is the case with Jackson Hewitt Online and some other online tax prep services.
7. Audit Defense Included at No Extra Charge
TaxHub’s Audit Defense product, which provides guidance and representation throughout IRS audits, is provided to all TaxHub customers at no extra charge. Many competing tax prep services charge for such services – TurboTax and TaxAct both charge a bit less than $40 for comparable products, for instance.
1. Not a Good Value for Simple Tax Situations
TaxHub’s lowest-priced plan, Basic, costs $85 for your federal and one state return and doesn’t allow you to file any supporting schedules with your return. By contrast, the lowest-priced plans offered by competitors such as TurboTax and H&R Block also have limited functionality. But they cost far less – many offer federal returns for free, and some (including TurboTax) provide state returns for free as well, for a total cost of $0. If you have a very simple tax situation that can be accommodated by one of these discount plans, there’s absolutely no reason to spend so much money with TaxHub.
2. Staff Is Super Lean
TaxHub is a young company that’s very much still in startup mode. Its website has just four staff bios, and it’s unclear whether they’re all full-time employees. Amazingly, when I scheduled my free consultation for the 2015 tax year, I was automatically assigned to speak with the founder himself – something that would never happen at H&R Block or TurboTax. Little seems to have changed for the 2016 tax year, though TaxHub has built some buzz in the interim.
Compared with clock-punchers at major tax prep companies, TaxHub’s lean staff is more likely to be fully invested in making the product the best it can be and providing top-notch customer service. That said, its small team is likely unable to provide the same breadth of service or overall responsiveness as its “big boy” competitors, particularly during crunch times. Although I didn’t experience any service issues directly, it’s easy to imagine a scenario in which TaxHub’s small team is overwhelmed with customer questions or problems in the week or two before the filing deadline.
3. No Military Discount
TaxHub doesn’t advertise any discounts or deals for military filers. That’s a significant disadvantage relative to TaxPoint, which offers a fantastic military deal – entirely free returns for active-duty filers, regardless of plan level.
4. Name Is Confusing & Generic
As a young, lean tax prep service without broad name recognition or a huge marketing budget, TaxHub struggles to stand out from the crowd. It’s hard for newcomers to find online – a Google search for “taxhub” turns up several entries that have nothing to do with TaxHub itself, including a New Zealand-based accounting group and an apparently dormant (but still live) British financial content website. TaxHub’s URL, gettaxhub.com, isn’t particularly obvious, either. I rarely feel compelled to bookmark a website, but that’s the first thing I did when I finally found the real TaxHub.
TaxHub also suffers from inconsistent branding. As I moved through its website, I found at least three variations on its name: TaxHub, Taxhub, and taxhub. TaxHub seems to be the preferred configuration, but the other two are common enough to confuse the issue.
5. No Security Questions & Few Password Requirements
TaxHub is a secure website with a lengthy privacy and security policy. I never felt like my information was at risk here, nor do I have any reason to believe that TaxHub is any more likely to experience a hack or breach than any of its better-known competitors.
That said, TaxHub has a laid-back approach to “front door” security that could give some users pause. For instance, it doesn’t require you to set up any security questions, and its password requirements are pretty lax – they just need to be eight characters. TaxHub’s timeout fuse is pretty long, too – I didn’t put a clock to it, but the website takes longer to time out than TaxAct (8 minutes) and TurboTax (10 to 15 minutes). Though you should never, ever do your taxes on a public WiFi network, this long fuse can be a problem even in semi-private situations, such as an apartment with nosy roommates or a shared WiFi network. At a minimum, use a virtual private network (VPN) and make sure your computer’s anti-malware software is operational and up-to-date.
For a scrappy tax prep startup, TaxHub is pretty impressive. It’s among the most hands-off tax services I’ve encountered, requiring far less time from its customers than DIY competitors. It’s cheaper than most in-person tax prep services, as well as the other CPA-run online services. And it offers some inclusions, such as SMS document uploading and no-charge audit defense, that aren’t common elsewhere.
On the other hand, TaxHub is still a new and unproven service. It doesn’t have instant name recognition or an established reputation. It’s not at all clear that TaxHub will be around in five years, nor that it has what it takes to grow into a company that could challenge the tax prep industry’s status quo. But disruption doesn’t happen without early adopters who buy into the cause. If you’re willing to accept the bad with the good, why not give TaxHub a try this year?
For more options, check out our full list of Top-Rated Free Online Tax Preparation Services.