Greanlight Review – “Taxes as a Service” Filing & Preparation

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I don’t exactly dread filing my taxes each year, but I don’t look forward to it either. Since setting out on my own as a full-time freelancer, my tax situation has become significantly more complicated. And it seems like there’s always a new hurdle on the horizon, like trying to figure out whether I should file taxes jointly with my new spouse, whose student loan debt could affect our tax burden.

Anything that makes this process easier is a relief. That’s why I was excited to learn about Greanlight, a Boston-based tax preparation startup that splits the difference between DIY online tax filing programs such as TurboTax or H&R Block and in-person services like Jackson Hewitt. Greanlight combines the convenience of online filing with the one-on-one support offered by in-person services, using sophisticated computer algorithms and experienced CPAs to help on both sides of the equation.

Accordingly, it’s ideal for people with somewhat complex tax situations, whether due to lots of contract gigs (and the requisite Schedule C filing), complicated deductions and credits, or business ownership. It’s not as useful for people with simple tax situations, who can probably save money and time by opting for a free or low-cost online filing service.

It’s worth noting that, while Greanlight has a maximum refund guarantee similar to better-known online tax preparation services, it doesn’t offer an accuracy guarantee. Accuracy guarantees generally promise to reimburse any IRS penalties and interest charges attributable to the calculation errors made by the offering service. If Greanlight makes a mistake that results in an IRS penalty or interest charge, it doesn’t appear bound to pay.

Pricing Plans, Features & Levels of Service

Greanlight has four pricing plans. You select your plan (and Greanlight recommends which you should choose) based on the value and type of your assets and whether you own a business. These plans don’t have names – they’re indicated by their base cost. However, Greanlight stresses that all packages are customized, so posted prices are intended as guides only.

If you have a particularly complex tax situation relative to your chosen plan, but don’t need to use a higher-level plan because you don’t own securities or a business, you may have to pay more than your plan’s base rate. Before you complete your filing and provide payment information, Greanlight provides you with a precise price quote and allows you to walk away from the process with no obligation.

1. $129

The most basic Greanlight plan is ideal for filers with simple tax situations: no home, business, or security ownership, and no contracting gigs. It comes with these features:

• Dedicated Tax Professional. A single human tax preparer, usually a CPA, handles your return from start to finish.
• Maximum Refund Guarantee. Greanlight claims that its clients receive the biggest legally allowable tax refunds. This is similar to representations made by competing tax preparation companies, though Greanlight doesn’t offer specific redress (such as a refund of filing fees) for customers who get bigger tax refunds elsewhere.
• One Free State Return. Greanlight waives filing costs for your first state tax return. If you own property or businesses in multiple states or moved across state lines in the past year, you must pay $30 for each additional state return.
• Live Customer Support. Greanlight offers two ways to get in touch with its human customer support staff: live chat onsite and a toll-free number: (855) 375-7474. Though Greanlight doesn’t post or disclose support hours, it appears to follow strict Eastern Standard Time business hours: In my experience, staff was available around 3pm Eastern on a Tuesday, but the live chat feature was disabled shortly after 5pm the same day. You can also email support using an onsite contact form, which typically produces a response within one business day.
• Free Audit Support. If you’re audited by the IRS or your state revenue authority, Greanlight makes a dedicated tax professional available to prepare you. Audit support is free with all plans and includes an in-depth review of what an audit entails, tips on documents and evidence you may need to provide, and a question-and-answer session wherein you can ask specific questions about your situation.
• Comprehensive Audit Protection. If you’d prefer hands-on representation during the audit process, you can purchase Greanlight’s Audit Protection Plan. This entitles you to full representation throughout the audit, with your Greanlight tax professional (not necessarily the same person who helped file your return) managing all contact with the IRS and/or your state revenue authority. The cost of Greanlight Audit Protection varies based on the amount of work necessary to defend against your audit and is assessed once the audit is complete. It’s typically a multiple of your filing fee, though Greanlight employees are hesitant to specify a range.

2. Starting at $159

This plan is ideal for homeowners and people who own marketable securities (such as stocks and bonds). It comes with all the features offered by the most basic plan, plus:

• Support for Homeowners. Your dedicated tax professional thoroughly evaluates your financial situation to ensure that you’re taking advantage of all applicable homeowner deductions and credits, such as the home mortgage interest deduction.
• Support for Investors Who Sold Marketable Securities. If you sold securities during the previous tax year, such as stocks, bonds, or mutual funds out of your brokerage account, you may be liable for short or long-term (or both) capital gains taxes.

3. Starting at $199

This plan is ideal for shareholders in pass-through entities. It has all the lower-priced plans’ features, plus:

• Support for Filers With Pass-Through Income. Pass-through entities, such as S-corporations, sole proprietorships, LLCs, and master limited partnerships (MLPs), are business structures that pass all taxable income on to their shareholders. By eliminating taxation at the corporate level, pass-throughs ensure that owners and shareholders aren’t taxed twice on any income. If you earned income from a business that’s structured as a pass-through entity or hold shares in an MLP (which may be publicly traded), each entity is required to send you a Schedule K-1 form detailing the income.

4. Starting at $349

This plan is ideal for business owners and independent contractors who are responsible for filing a Schedule C. It includes everything in lower-priced plans, plus:

• Support for Schedule C Filers. If you own your own business or are a self-employed freelancer, consultant, or other “independent,” you’re liable for self-employment tax and must file a Schedule C or Schedule C-EZ, which allows you to take business deductions and credits such as home office deductions. Most workers who receive Form 1099-MISC are liable for self-employment tax, though your Greanlight tax professional can help you make a final determination. According to the IRS, “An activity qualifies as a business if your primary purpose for engaging in the activity is for income or profit and you are involved in the activity with continuity and regularity.” If this describes what you do for a living, even if you don’t think of yourself as a business owner, you need to file a Schedule C and choose this Greanlight plan.

How the Greanlight Tax Filing Process Works

Regardless of how your tax situation shapes up, your interaction with Greanlight follows a basic pattern. Note that this entire process takes place remotely – you never need to travel to a physical office and meet with an employee in person, as you would with Jackson Hewitt, H&R Block, and independent accountants. All steps, except for a one-on-one conference, take place through your Greanlight account.

• Tax Questionnaire. After creating a free account, you complete a very basic questionnaire that asks your marital status, whether you own or rent your home, whether you own stock, whether you own a business, and, if you remember, which tax form you filed last year (for instance, Form 1040 or 1040X). If you have access to it, you can upload last year’s return here as well. Including upload, this takes one or two minutes.
• Schedule and Complete a Conference. With the questionnaire complete, you’re asked to schedule a conference with the dedicated tax professional charged with handling your return. Greanlight’s staff is available between 10am and 4:30pm EST, in half-hour blocks (though Greanlight says the average conference takes about 10 minutes). You can confer via phone, Skype, or Google Hangout. The conference itself involves a detailed overview of your financial situation and ends with your tax professional giving you a complete list of the forms you need to upload. Though Greanlight strongly recommends a one-on-one appointment, you can skip this step and communicate with your tax professional by email if you prefer.
• Upload Documents. Next, you scan and upload all requested documents, such as W-2s and 1099s, using a secure server. With a good Internet connection, this takes 5 to 10 minutes.
• Preview Draft Return and Pay. Within 48 hours (Greanlight aims for 24 hours, but doesn’t always make this goal during busy periods), you receive a draft of your tax return from your tax professional. Once you review and approve it, Greanlight provides you with a price quote for its services, at which point you can accept and pay by credit card or end the process with no obligation.
• E-File and Refund. Greanlight immediately e-files your approved return. If you’re entitled to a state and/or federal refund, it should arrive within 21 days, though it can take longer if there’s an issue with your return or you file close to the deadline. If you owe additional monies, Greanlight tells you where to send them and by when.
• Record Keeping. After the entire process is complete, Greanlight securely stores the uploaded documents and filed forms comprising your return. These remain accessible in your account and can be used as the basis for future tax returns, if you choose to keep your business with Greanlight in subsequent years. Greanlight doesn’t say how long your returns remain stored for, but there’s never an additional charge for storage.

Advantages

1. Quick, Comprehensive Filing Process
According to Greanlight, the typical tax filing requires less than 30 minutes of the client’s time, start to finish, though more complicated situations that require longer initial conferences may take more time. The company’s tax professionals handle the bulk of the legwork, including tedious form-filling and box-checking, and thoroughly check their work to ensure that nothing important is missed. This is a big component of Greanlight’s promise to provide its clients “peace of mind” – there’s relatively little buy-in on your part, but the result is polished and professional.

By contrast, unassisted filing with TurboTax and H&R Block can take hours. My most recent TurboTax return clocked in at more than three hours, and I still wasn’t sure I’d gotten everything right.

2. Your First State Return Comes Free
All Greanlight pricing plans come with one free state return. If you don’t own property in multiple states and didn’t move across state lines during the previous tax year, you probably don’t have to worry about paying extra to file your state taxes with Greanlight. This is a major contrast with such popular online tax programs as TurboTax and H&R Block, which charge between $5 and $40 for each state return (including your first).

3. Support From Highly Trained Professionals
Greanlight’s tax professionals, including your dedicated tax preparer, are actually professionals. According to Greanlight, most are CPAs. Accordingly, you can trust both your dedicated preparer and the random staff member you reach via live chat to know what they’re talking about.

Sadly, this isn’t always the case at Greanlight’s competitors. Online filing services such a TurboTax don’t require customer service staff to hold any financial certifications, though audit defense staff do tend to be credentialed accountants. The situation may be worse at in-person tax preparation companies like H&R Block and Jackson Hewitt, which rely heavily on minimally trained seasonal employees.

4. No Need to Visit an Office
Greanlight describes its approach as “Taxes as a Service.” That’s a play on “Software as a Service” or “SaaS,” the broad term used to describe cloud-based service platforms.

Though Greanlight is far from the only tax preparation service that allows you to complete and file your return in the comfort of your home, it’s the first to seamlessly blend tax preparation at home with on-demand access to highly trained tax professionals. It’s much more difficult (if not impossible) to access such qualified employees through TurboTax, TaxAct, or even in person at H&R Block.

5. No Upselling or Ads
Once Greanlight calculates the cost of your customized price quote, it doesn’t try to upsell you to a higher-cost plan or entice you with additional, potentially costly perks. It also doesn’t show you ads for related products.

TaxAct, H&R Block, and TurboTax all upsell throughout the filing process. And though its ads aren’t obtrusive, Intuit-owned TurboTax does serve as a sales channel for its parent company’s other products, such as QuickBooks and Intuit Payroll.

6. No Hidden Fees
Though Greanlight’s plans are more expensive than basic packages offered by TurboTax, TaxAct, and others, the company doesn’t charge any hidden fees for services that you wouldn’t expect to pay for. Your customized plan’s price is your final price, unless you opt for hands-on Audit Protection in the event of an audit. By contrast, TurboTax charges about $30 extra if you opt to pay its fees with your federal refund, which seems excessive.

Disadvantages

1. No Free Filing Option
Greanlight’s plans start at $129 for your federal return plus one state return. There’s no free filing option. If you have a very simple tax situation, such as a single employer and few deductions or credits, an online tax program with a free federal filing option (such as TaxAct) would save you a lot of money relative to Greanlight.

2. Confusing Pricing Scheme
Though Greanlight gives you a clear opportunity to accept its filing fee or walk away without any obligation, it doesn’t provide a great indication of its services’ cost before you begin the filing process. Since each client’s experience is customized, filing fees can be higher than the posted base rate, leading to a potentially unpleasant surprise when you’re shown the final price. (Even though you can walk away at this point, you may decide that you’ve done too much work to call it quits.)

Furthermore, Greanlight doesn’t provide any indication of cost – even a broad range – for its Audit Protection plan. Most competing tax preparation services, both online and in-person, offer set-price packages for all but the most complicated tax situations.

3. Maximum Refund Guarantee Is Vaguely Worded
Greanlight’s maximum refund guarantee reads: “The Greanlight Guarantee assures that you will receive your maximum available refund and that you will maintain peace-of-mind throughout the process.” Note that it doesn’t include any promises about what Greanlight will do if you’re able to get a bigger refund through a competing service.

By contrast, TurboTax’s maximum refund guarantee inspires more confidence. It clearly states that you’re entitled to a full refund of fees paid to TurboTax if you get a bigger tax refund through a competitor.

4. Limited Customer Service Availability
Though Greanlight touts clients’ easy access to tax professionals, its support channels aren’t staffed at all hours. In fact, they stick to a pretty strict Eastern Time business hours schedule. It’s not clear if this is due to the fact that Greanlight is a young, lean company with a small staff or for some other reason, but it can be inconvenient if you have a pressing question after-hours or if you live on the West Coast. Staffing and open hours may ramp up as the April 15th tax deadline approaches, but there aren’t any posted hours or assurances from management to indicate whether this is the case.

By contrast, TurboTax’s live phone support is available from 5am to 9pm PST. H&R Block’s hotline is open 24/7 from early January through mid-April, and from 7am to 7pm Central the rest of the year.

5. No Accuracy Guarantee
Greanlight doesn’t offer an accuracy guarantee that absolves customers of financial responsibility for a Greanlight calculation error. In other words, Greanlight is saying, “We’re not liable for our own mistakes.”

Most competing services do guarantee reimbursement for any IRS penalties or interest charges attributable to calculation errors. Some, such as TaxSlayer, go farther and offer similar guarantees for state penalties and charges as well.

Final Word

Though it’s not entirely fair to judge a company by its age, nor to compare a tax preparation startup like Greanlight to established powerhouses such as TurboTax and H&R Block, it’s important to note that Greanlight is a very young company without much of a proven track record. If you choose to file your taxes with Greanlight, you may experience some bumps and hiccups that aren’t noted in this review. And even if you have a great experience one year, you might return the following tax season to find that Greanlight has turned red.

Matt Gorman and Jeff Mansfield, Greanlight’s credited co-founders, seem like honest, well-intentioned guys, and I wish them the best. But it’s tough out there, especially when you’re going up against the big boys in a wildly competitive industry.