Why tax preparers like TurboTax and H&R Block want your data

This article is a preview of The Tech Friend newsletter. Sign up here to get it in your inbox every Tuesday and Friday.

The information in your tax return is a secret. It’s one of the few ironclad privacy protections you have in the United States.

Only you, the IRS and maybe your tax preparer can see sensitive details such as your income, your mortgage payment and your investments. They must keep it private.

But like in past seasons for tax filing, popular online tax services from TurboTax and H&R Block want to blab your tax return secrets. Why? To help them make more money.

You have the power to refuse when TurboTax and H&R Block ask permission to share details from your tax return. I’ll tell you why you should consider saying HECK NO, and how to do it.

They’re asking for WHAT?

If you prepare your taxes online with TurboTax or H&R Block software, at some point you’ll see a message that I found confusing.

“We can help you do more,” TurboTax says. In this case, that “help” is funneling the private information from your tax return to Intuit — the company that owns TurboTax, Credit Karma and accounting software QuickBooks.

H&R Block offers to “personalize your H&R Block experience.”

If you say yes, you’re going to see email and other marketing from Intuit and H&R Block or its business partners that are tailored to what’s in your tax return. That might include how much money you make, how much you owe in student loans, the size of your tax return and your charitable contributions.

For example, a credit card company might pay Intuit’s Credit Karma to show offers to high-income people. Intuit knows that information from your tax return.

The Washington Post technology columnist Geoffrey A. Fowler wrote last year about how these two companies grab for your secret tax return information. He dubbed it “the Facebook-ization of personal finance.”

In a way, the tax prep companies are more aggressive than Facebook. What they’re doing is mission creep.

You might already be paying TurboTax and H&R Block to prepare or file your tax return. Now they also want your permission to pass along your secrets to make even more money off you.

An Intuit spokesman said that with TurboTax customer consent, the company “shares only the data necessary for the customer to be able to take advantage of the product or service they choose and only with approved third parties.”

The good news: You can say no.

This is one of the rare moments online in which your consent is completely voluntary.

By law, TurboTax and H&R Block can only use information you provide to help you prepare and file your tax return. They must have your permission to use your financial secrets for anything else — including leveraging that information for the business of selling you.

See that “No Thanks” button on H&R Block? Smash that button. On TurboTax, click “Decline.”

H&R Block’s permission request is near the beginning of the process for preparing your tax return. TurboTax asks close to the end when I felt tired and wanted to speed through the process.

Consider whether this is a fair trade

The companies say if you let them pass along your tax secrets, they can suggest tailored help based on your personal financial situation.

Intuit said that with your consent for TurboTax to share details of your tax return, it can help you get a better rate on your mortgage or save money in a Credit Karma account with a high savings rate.

H&R Block says that sharing your private tax information lets it offer tailored financial advice, such as how government student loan forgiveness programs might affect you.

You should consider carefully if this is a fair deal. TurboTax and H&R Block pass along some of your most sensitive financial details. The more hands that can access your data, the higher the risk of that information being misused or stolen.

And what exactly are you getting in return for your prized financial secrets? Is H&R Block or Intuit the best ally to help you wipe out your student loans or get a great deal on your home mortgage?

H&R Block told me that even if you decline to share your private tax return information, you can still benefit from the company’s tax preparation and filing services. (This is a protection under federal law.)

You can change your mind if you said yes

If you already filed your taxes this year, agreed to one of those data-blabbing requests and have changed your mind, you can try to yank your permission.

Intuit’s spokesman said “customers may email Intuit at any time to request revocation of their consent.” Write to [email protected] and say you want to revoke your consent for use of your tax return information by Intuit and its sibling companies. Intuit also has a site for privacy questions.

H&R Block said customers can revoke their permission by contacting customer service. That phone number is 1-800-472-5625.

And one tip if you haven’t filed your tax return yet. (The deadline is April 18.)

If your family earned $73,000 or less in 2022, you can use the IRS Free File program. Like paid online tax prep services, Free File walks you through filling out and filing your federal return. Except it’s free.

TurboTax and H&R Block do offer a free product if you have a relatively simple tax return. The IRS free filing software is available to anyone who meets the income requirement.