If you’re a Capital One customer, you may have recently been offered a deal for them to file your taxes electronically through H&R Block, free of charge.
So what exactly are they offering, and is it a good deal? Even further, is it safe? Let’s explore the details.
What is the offer?
Capital One is offering to pay for and file some of their customer’s tax returns for free. Not all customers qualify, but Capital One launched a partnership with H&R Block on February 1st that will allow some customers to get the H&R Block Premium product for free.
The offer has been showing up on customer’s Capital One apps—usually when they go to review their statements. It appears that only some customers are getting this offer and there’s no way to trigger it to show up. To see if you qualify for the free tax filing offer, log into your Capital One app.
What’s in it for you?
A free tax filing. And a darn good product too. The H&R Block Premium product is their third tier (out of four) of tax return products and, according to their website, has some of the following features that other versions don’t include:
- One personal state program—it costs extra to file your taxes with the state, so you’ll get one free
- Maximize mortgage and real estate deductions—if you own a home or rental properties, this feature will allow you squeeze as much as you can out of your deductions
- Automatically value and optimize your charitable donations—if you make any charitable contributions (i.e., church, school, or nonprofit programs) you can usually write those donations off at tax time; this feature will help you maximize that
- Assistance on investment income and stock options—if you sold stock during the year for profit, you’re typically subject to capital gains tax; this feature will provide advice on how to manage and report this
- Help to determine the cost basis of home sale, dividend, gift and inheritance assets—if you had any of these irregular life events during the year, there are tax implications, so you’ll want to ensure they’re accounted for on your tax return properly
- Maximize deductions for self-employment income (Schedule C)—if you have a side hustle or are entirely self-employed, you need to file Schedule C; this feature will walk you through that process
- Guidance for rental property income and expenses (Schedule E)—if you own any rental property, you’ll have to file Schedule E; this feature explains and walks through this form with you
The Premium version retails at $74.95. So, if you’re getting this offer via Capital One, it could save you a good chunk of change.
What’s in it for Capital One?
Here is where it gets a little dicey. Capital One’s offer says this:
In return for this no-cost service, Capital One receives your tax data and uses it to identify improvements to the products we offer you.
They also go on to say:
We will never share your tax data with any third party.
Even further, one Capital One customer found the following verbiage after reading through the terms and conditions:
Capital One provides an offer to provide tax preparation services at no cost to you via HRB to select Capital One cardholders if that cardholder consents to HRB providing that cardholder’s income information used for the cardholder’s tax return to Capital One. Capital One, in turn, will use such income data to perform certain analytics on such cardholder’s account based upon this income information.
So in exchange for Capital One paying for your tax return, they get full access to your tax return data. Since they haven’t clarified, I would assume that they will have access to everything. By taking the offer, you’re permitting them to do so.
Collecting your information is not an uncommon practice. In fact, many companies use data mining to receive your information and use it to either tailor products and services to you or sell to other companies.
When you sign up for ‘free’ apps or other services, you typically agree to some terms and conditions. In those terms, most likely you decide to let the company use your information for these purposes.
(Side note—next time you sign up for what seems like a free app, read through those terms and conditions to see exactly what you agree to).
Most people gloss over this because they’re anxious to use the product or service.
Now, Capital One is claiming they won’t provide your information to any other parties, and will only keep the data in-house. This still means they’ll have access to things such as:
- Your employer—your W2 will show who you work for and where they’re located
- Your income—you need to report all of your income on your tax return
- What kind of loans you have (and how much you owe)—your tax return considers things like mortgage loans and student loans for tax purposes
- How much you have invested in stocks—if you own a brokerage account, you’ll get a tax form to report any gains or losses
- Whether you own a home—if you own a home, you receive certain deductions on your tax return
- If you have children—most people claim their children as dependents on their tax return and earn tax credits for this
Is it worth it?
Unless you’re strapped for cash and could use the free filing, I don’t think this is a good offer. The product you’re getting from H&R Block is excellent, but I would personally feel most comfortable shelling out the $75 and keeping my personal information separate from my credit card company.
If you do decide to move forward with the offer, make sure you read all of the terms and conditions. If you’re still unsure, contact Capital One for more information.
Also, remember that once Capital One has this information, they’ll begin to solicit offers to you. This can be a good or a bad thing—depending on how you look at it. They haven’t been clear on exactly how they’ll tailor offers for you. I’d imagine they’ll offer you things like deals to refinance your mortgage or consolidate your existing student loan or credit card balances.
Don’t need all the bells and whistles?
Regardless of what you do, we want you to get the most out of your tax return
Whether you take the H&R Block/Capital One deal or choose another tax preparation option, we want you to have the best understanding of your tax return possible (and get the biggest return you can). Here is some further reading to get you ready for tax time:
- Money Under 30’s Tax FAQ
- Itemized Deductions: A Beginner’s Guide
- How To File Income Taxes: A Guide For Filing Your 2017 Taxes
- Got Freelance Income? 7 Money-Saving Tax Tips
- 3 Ways To—Legally—Pay Fewer Taxes And Snag A Bigger Refund
- Understanding The Differences Among Tax Credits, Deductions, And Adjustments
- 5 Hidden Ways to Boost Your Tax Refund (via TurboTax)
- 9 Things You Didn’t Know Were Tax Deductions (via TurboTax)