A Guide to Property Taxes in 2021: States With the Highest (and Lowest) Rates

With tax season upon us, it seems like a good time to check what homeowners pay in property taxes—and a new survey confirms that where you live makes a huge difference in how much you’ll have to cough up.

According to researchers at WalletHub, which analyzed tax data on all 50 states and the District of Columbia, the average American household pays $2,471 on real estate property taxes. But that can vary widely. And just in case you thought the country wasn’t polarized enough already, political leanings can often be an indicator of state tax rates: “Blue states” (defined by WalletHub as how they voted in the 2020 presidential election) generally pay higher property taxes than “red states.”

As for the state with the highest property tax rate, that’s New Jersey, where residents pay a rate of 2.49%, which means that people living in a median-priced home in the area ($335,600) will pay Uncle Sam $8,362 in property tax per year.

In fact, the five states with the highest tax rates are all east of the Mississippi.

Meanwhile, people in Hawaii are blessed with the lowest real estate tax rate of 0.28%. So even though a median-priced home in the area is expensive ($615,300), homeowners end up paying only $1,715 in taxes per year. In Alabama, the state with the second-lowest tax rate (0.41%) as well as bargain-basement median home prices ($142,700), you’ll pay even lower property taxes of just $587 per year.

Curious how your state stacks up? Below are the top 10 states with the highest—and lowest—property taxes:

States with the highest property taxes

  1. New Jersey: $8,362 (2.49%)
  2. Illinois: $4,419 (2.27%)
  3. New Hampshire: $5,701 ( 2.18%)
  4. Connecticut: $5,898 (2.14%)
  5. Vermont: $4,329 (1.90%)
  6. Wisconsin: $3,344 (1.85%)
  7. Texas: $3,099 (1.80%)
  8. Nebraska: $2,689 (1.73%)
  9. New York: $5,407 (1.72%)
  10. Rhode Island: $4,272 (1.63%)

States with the lowest property taxes

  1. Hawaii: $1,715 (0.28%)
  2. Alabama: $587 (0.41%)
  3. Colorado: $1,756 (0.51%)
  4. Louisiana: $890 (0.55%)
  5. District of Columbia: $3,378 (0.56%)
  6. South Carolina: $924 (0.57%)
  7. Delaware: $1,431 (0.57%)
  8. West Virginia: $698 (0.58%)
  9. Nevada: $1,614 (0.60%)
  10. Wyoming: $1,337 (0.61%)

Why are my property taxes so high—or low?

While property taxes may be high in some states, lower home prices may offset this tax burden. For example, Illinois—which has the second-highest tax rate, at 2.27%—has a low median home price of only $194,500, resulting in annual property taxes hovering around $4,419. That’s less than you’d pay in other states with lower tax rates (like New Hampshire and Connecticut).

So what can you do if you live in a state with high tax rates and high home prices?

“Unfortunately, living in the Northeast has become a very expensive proposition if you want to own properties,” says Ralph DiBugnara, president of Home Qualified and senior vice president at Cardinal Financial. “But homeowners should be aware of what they can write off when it comes to homeownership, especially in these high-tax areas.”

In other words, in high-tax-rate states with pricy properties, the good news is that you are allowed to write off (or deduct) up to $10,000 of your property taxes. Just remember that this may not cover all of your property taxes; it depends on how much your home is worth.

“If your home is worth $500,000 or below, you should be able to write off all of your property taxes,” says DiBugnara. “But if your home value is above $500,000 and in a state with tax rates around 2%, most of the time this is not enough of a write-off to cover all of your property taxes.”

This problem is typical in Northeast states. Still, any write-off is better than none, right?

To help with your overall tax bill, you can also write off mortgage interest as a tax deduction for a balance of up to $750,000. And if you buy or sell a home in a tax year, in most cases you will be able to write off transfer taxes—local or state taxes charged in any real estate transaction.

Green energy sources for homes that are powered by solar are also tax-deductible. You also have the right to appeal the amount of your property taxes if you think the assessed value of your home is too high.

Also weigh what your property taxes go toward when deciding where you want to live.

“People should definitely consider property taxes when they move, alongside information about the local services that those property taxes pay for,” says Stephanie Leiser, lecturer in public policy at the Ford School at the University of Michigan. “They should consider the ‘value for the dollar’ they would get from paying property taxes.”

For example, in some communities, services like trash pickup will be covered by property taxes, while in others, there will be a separate fee.

“It’s also important to keep the overall tax picture in mind when deciding where to move,” adds Leiser. “Low property taxes may sound great, but they may be offset by higher local sales taxes or other taxes and fees.”

Source: realtor.com

What’s the Best Online Tax Prep Software? – TaxAct vs TurboTax vs H&R Block

In recent years, it’s taken me much longer than I’d like to complete and e-file my state and federal income tax returns. That’s because I’ve spent some time evaluating the most popular online tax preparation software available to filers in the United States, including TurboTax, TaxAct, and H&R Block.

All three have a similar set of core features and capabilities, including the ability to e-file. That can make it challenging to differentiate among them at a glance. But there are differences.

Before choosing one, learn how TurboTax, TaxAct, and H&R Block stack up — and what’s new for the 2020 tax year.

Online Tax Preparation Software Evaluation Method

I’ve done my own taxes and run this comparison for several years in a row. As my tax situation has changed, so have my experiences. For example, during the 2014 tax year, I moved across state lines, forcing me to file two state tax returns.

For the 2020 tax year, I used the same mock tax situation for all three programs to ensure an apples-to-apples comparison. Though it’s a bit more complicated than my actual tax situation, it allows me to explore each platform in greater depth than I otherwise would. Its highlights include:

TurboTax, H&R Block, and TaxAct all have a maximum refund-minimum tax liability guarantee. That means each service waives your prep fees if you can prove another program produces a higher tax liability or lower refund on an identical tax situation.

With these three programs, my federal and state tax liabilities have always been identical across the board. However, the time and expense of preparing with each service vary considerably.

Key Features

TaxAct, TurboTax, and H&R Block have many features and capabilities in common. TurboTax and H&R Block are especially close cousins, offering tax prep assistance from human experts for users who want it. However, each program is distinct enough to warrant close examination on the merits.

DIY Tax Prep Plans & Pricing

Each of these tax prep services can handle virtually any personal income tax situation, from straightforward to very complex. All offer multiple DIY tax prep plans that correspond to general positions on the complexity spectrum. Notably, all offer a free plan for filers with relatively simple situations.

DIY Tax Prep Plans & Pricing for H&R Block

Pricing for H&R Block’s DIY tax prep plans rises as the tax season progresses. Early birds get better deals (at the lower end of the ranges specified here) than those who prep and file as the deadline approaches.

  • Free. This plan offers free federal and state filing for simple to moderately complex situations. If you can file your taxes using Form 1040 without any additional schedules, the free plan is for you.
  • Deluxe. The deluxe plan costs $23.99 to $49.99 for federal prep and filing and $36.99 to $49.99 for each state return, depending on when you file. It’s appropriate for filers who need to itemize deductions, import a prior-year tax return from another tax prep service, or access H&R Block’s in-house phone support team.
  • Premium. The premium plan costs $39.99 to $69.99 for federal prep and filing and $36.99 to $49.99 for each state, depending on the filing date. It supports a range of more complex activities, including investment activity and rental property ownership.
  • Self-Employed. The self-employed plan costs $67.99 to $84.99 for federal prep and filing and $36.99 to $49.99 for each state, depending on the filing date. It’s appropriate for self-employed individuals and small-business owners.

DIY Tax Prep Plans & Pricing for TurboTax

Like H&R Block, TurboTax varies pricing as the tax season progresses. But its plans are a bit more expensive than either H&R Block’s or TaxAct’s.

  • Federal Free Edition. This plan offers free state and federal filing for relatively simple situations — filing using Form 1040 with no attached schedules. A state fee may apply as the filing deadline approaches, so prep early to avoid surprises.
  • Deluxe. The deluxe plan costs $40 to $60 for federal DIY tax prep and filing and $40 to $50 per state return, depending on when you file. It’s appropriate for filers who wish to itemize deductions. It also has some additional features, such as prior-year return importing from other tax prep programs, live phone support, and online tax return editing for up to three years after filing.
  • Premier. The premier plan costs $70 to $90 for federal DIY tax prep and $40 to $50 per state return, depending on when you file. It’s appropriate for many complex tax situations, including active investing and rental property ownership, but can’t support situations involving pass-through income via a formal legal business structure.
  • Self-Employed. The self-employed plan costs $90 to $120 for DIY tax prep and $40 to $50 per state return, depending on when you file. It’s appropriate for self-employed individuals and small-business owners with pass-through income.

DIY Tax Prep Plans & Pricing for TaxAct

Like H&R Block and TurboTax, TaxAct pricing is subject to change, depending on when you file. Lower prices represent early-season discounts that may disappear at any time.

  • Free Edition. Like TurboTax’s and H&R Block’s free plans, TaxAct’s covers federal and state prep and filing fees. It’s appropriate for most people who can file using Form 1040 only with no additional schedules.
  • Deluxe. The deluxe plan costs $24.95 to $44.95 for federal prep and filing and $44.95 per state return, depending on when you file. It’s appropriate for people who wish to itemize deductions.
  • Premier. The premier plan costs $34.95 to $69.95 for federal prep and filing and $44.95 per state return, depending on the filing date. It’s appropriate for equities market investors, rental property owners, people with foreign financial accounts, and people who earn passive income reported on Schedule K-1 (but not those actively involved in self-employment or business ownership activity).
  • Self-Employed. The self-employed plan costs $64.95 to $79.95 for federal prep and filing and $44.95 per state return, depending on the filing date. It’s appropriate for self-employed individuals and small-business owners. It also includes additional features for these groups, such as a deduction-maximizer tool that supports year-round expense tracking from your TaxAct account.

Tax Prep Assistance From Human Experts

H&R Block and TurboTax both offer varying degrees of hands-on tax prep assistance from in-house trained tax preparers, Enrolled Agents (EAs), or certified public accountants. H&R Block makes these resources available online and in-person (albeit at a much higher fee), while TurboTax limits hands-on assistance to the online realm only. TaxAct does not offer expert tax prep assistance.

H&R Block’s Expert Tax Prep Assistance Options & Capabilities

H&R Block offers two online expert-assistance packages: Online Assist and Tax Pro Go. Online Assist only provides human experts to review the client’s return for accuracy and tax optimization. Tax Pro Go is a true full-service package in which remote human preparers complete clients’ returns for them.

  • Online Assist. H&R Block bases Online Assist pricing on the complexity of your return, but it generally adds at least $40 to your prep costs. Covering a thorough review by a tax professional and their corrections to your return, you can access it as an add-on to any DIY package.
  • Tax Pro Go. Tax Pro Go users upload their tax documents, such as income statements, to H&R Block’s secure portal. Human preparers do the rest. Pricing is also custom and based on the complexity of the return. It’s comparable to what human CPAs charge for hands-on tax prep (and what H&R Block charges for its own in-office tax prep services). My total state and federal filing cost would have been upward of $250 for the 2020 tax year.

H&R Block also offers in-person tax prep assistance at thousands of storefront office locations across the U.S. If you find yourself at a tax prep impasse at any point and don’t want to use one of H&R Block’s digital expert-assistance packages, you can make an appointment at an H&R Block office and complete it with truly hands-on help.

TurboTax’s Expert Tax Prep Assistance Options & Capabilities

TurboTax also offers two expert tax prep assistance packages: TurboTax Live and TurboTax Live Full-Service. TurboTax Live involves on-demand consultation with and tax advice from TurboTax CPAs or EAs as you prepare your own taxes. TurboTax Live Full-Service is a hands-on prep package that only asks the filer to upload their tax documents and sign off on their completed returns.

  • TurboTax Live. Appropriate for all situations, this package is available as an add-on to any DIY tax prep plan. It adds $50 to $80 to the final plan cost, depending on the plan level. Early-bird pricing ranges from $90 for deluxe clients to $170 for self-employed clients. Late-filing pricing is generally $30 higher, regardless of the plan.
  • TurboTax Live Full-Service. Ideal for very complicated situations, such as business ownership, TurboTax Live Full-Service is priced on par with full-service independent CPA tax prep. As with H&R Block’s Tax Pro Go package, I would have paid upward of $250 for state and federal filing for the 2020 tax year.

TurboTax does not have a network of brick-and-mortar locations and thus does not offer in-person tax prep. However, TurboTax Live Full-Service can accommodate virtually any prep-related issues, no matter how tricky or unusual.

TaxAct’s Expert Tax Prep Assistance Options & Capabilities

TaxAct doesn’t offer expert tax prep assistance, making it best for experienced DIY filers who are confident they won’t need professional help. If you get stuck while prepping with TaxAct, you can always take what you have so far to a professional tax preparer in your area.

Federal Tax Prep Process

I’ve prepared my taxes with these three programs for several years running. What follows is a condensed summary of my experience with each, including total prep time, total cost, version used, and observations of key features and functions.

H&R Block’s Federal Tax Prep Process.

  • Time Spent Preparing: 90 minutes
  • Version Used: Premium (In past years, I began with the free version and upgraded only after being prompted, but in 2019 and 2020, I went straight to premium)
  • Total Cost: $76.98

H&R Block is one of the most popular online tax preparation programs around. Despite its plethora of brick-and-mortar offices, filing online is both more convenient and — in most cases, at least — significantly cheaper than filing in person. H&R Block’s software uses an interview-style process that takes you through your taxes step by step, ensuring you don’t miss any crucial forms or schedules.

The platform’s drag-and-drop return upload feature is a big time-saver over the more cumbersome importing tools common to truly bare-bones discount tax prep platforms, such as TaxHawk and FreeTaxUSA.

Also helpful is the last page of each section, which includes a concise summary of the information you enter. If anything looks amiss, you can go back to the corresponding page and edit the erroneous information with one click.

These features also appear in H&R Block’s mobile-friendly Web version and its powerful mobile tax prep app, which has all the main features and capabilities of its standard Web version. You can move seamlessly between the mobile app and Web version to work on your saved return as needed. And you can e-file your return right from the app if that’s most convenient for you.

Another bonus of the service is H&R Block’s transparent pricing. You know exactly how much you’ll pay to file before you do so, and H&R Block makes any pricing increase crystal-clear before you upgrade.

But thanks to the impressive help button on the left sidebar, you may not need to upgrade. When clicked, it produces a pop-up window that lists popular help topics in question form and features a search bar for less common queries.

That makes it easy to get clarification without having to exit your work or open a new window. I’ve played around with this feature quite a bit in the past and never failed to learn something new each time.

TurboTax’s Federal Tax Prep Process

  • Time Spent Preparing: 100 minutes
  • Version Used: Premier. (In past years, I’ve started with the federal free version and upgraded in steps as TurboTax prompted me to move to the cheapest version that could handle my mock situation each time I provided an interview answer the current version couldn’t; this year, I had enough experience to know what I needed)
  • Total Cost: $110

TurboTax is another top-rated online tax filing program owned by Intuit, one of the country’s best-known financial software firms. Appropriately, its interview-style preparation process is extremely intuitive, demystifying tax issues for novice filers.

TurboTax also has a clean, mobile-friendly layout and a high-quality mobile app, not to mention excellent customer support at all plan levels. Phone support is available only with deluxe and higher plans, but it also has a dynamic, user-supported knowledge base.

I have experienced some functionality issues with TurboTax in the past, but these haven’t been disruptive of late. Overall, TurboTax seems to grow more user-friendly every season.

One feature that sets TurboTax apart is the ability to import prior-year returns from any tax prep service as long as the return is in PDF format. TurboTax has long been a leader in this respect, with competitors — namely H&R Block — only belatedly joining it. (To be fair, H&R Block now offers seamless prior-year importing as well.) Robust PDF importing capability is hugely helpful for first-time users.

TurboTax eases you into the interface with helpful pop-up windows that explain the platform’s key features, such as the help bar and internal navigation tools. TurboTax has consistently been (and continues to be) among the most user-friendly tax prep programs around.

TurboTax’s prep interface is blissfully easy to navigate. Its questions are more pointed and easier to understand than H&R Block’s, and the platform rarely presents confusing or vague information. At the beginning of each section, TurboTax takes care to call out less common situations and forms, subtly directing you toward tax forms or rules that are more likely to apply.

The platform also places helpful pop-up buttons next to elements that may require explanations, such as schedules and types of income. Clicking on the button creates a pop-up window that explains the topic in detail. For filers in a rush, it’s a time-saving alternative to searching the knowledge base.

TurboTax waits until you’re done with state taxes to review everything. It’s a marginal time-saver compared to H&R Block’s federal-only and state-only reviews. However, when I attempt to move backward in my federal return to check something manually, I’m occasionally stymied by an HTML error. It happens less frequently than it used to but is worth noting nonetheless.

TurboTax Live — first introduced in the 2017 tax year — is a huge help for filers with complicated situations and comes at a substantial discount to the cost of filing with a CPA. TurboTax Live Full-Service, a new addition for the 2020 tax year, costs still more but is ideal for taxpayers who don’t want anything to do with the prep process but don’t want to visit a CPA in person.

TaxAct’s Federal Tax Prep Process

  • Time Spent Preparing: 115 minutes
  • Version Used: Premier. (In the past, I’ve used the free version, but recent updates have rendered it unsuitable for situations as complex as my mock situation)
  • Total Cost: $79.90

TaxAct’s prep process and fee structure have changed significantly since the early 2010s, when the free version supported the vast majority of available tax forms and schedules and could therefore accommodate virtually any individual tax situation. Today, its pricing model and process are much more in line with TurboTax’s and H&R Block’s, albeit at a slightly lower price point.

TaxAct’s prep interface uses interview-style questions, but the interface is more exhaustive and less responsive to user answers than TurboTax’s or H&R Block’s. Specifically, the system may ask you questions about specific situations that don’t apply to you based on previous answers, whereas TurboTax and H&R Block seem to learn better from earlier responses.

This aspect of TaxAct is less tedious and time-consuming than it has been in the past, though overall prep time is still higher than with TurboTax or H&R Block. With large text and buttons and straightforward navigation, TaxAct’s main website is nearly as mobile-friendly as TurboTax’s and H&R Block’s and significantly more so than true discount programs, like FreeTaxUSA. TaxAct also has a dedicated mobile and tablet app that supports relatively simple tax situations, but this solution isn’t appropriate for filers with self-employment income.

No matter how you choose to use the platform, TaxAct has long had some free or low-cost features designed to simplify and streamline the tax prep process. For instance, early-bird filers can lock in their pricing at the beginning of tax season, even if TaxAct raises its prices in the interim.

The at-a-glance help feature gives you real-time advice and commentary from tax experts as you work through your tax return. The bookmark feature lets you flag interview questions for review at a later time. And it’s easier than ever to call up prior-year tax returns as you prepare your current-year return.

State Tax Prep Process

Some people are fortunate enough to live in a state with no income tax. The rest of us must prepare and file state income taxes every year. All three programs support that endeavor at roughly equivalent cost.

H&R Block’s State Tax Prep Process

H&R Block’s state preparation process unfolds similarly to the federal return — except with state-specific questions. Once you check your federal return for accuracy, the program immediately whisks you into the state section and automatically imports all relevant information from your federal return.

During the 2014 tax year, when I lived in two states, I found it simple to fill out my second state return. H&R Block remembered I’d moved during the year, and the software automatically brought me back to the beginning of the state return process after completing the first. I haven’t moved since and can’t claim income in any other states, so this hasn’t come up since, but the process appears to work much the same today.

TurboTax’s State Tax Prep Process

As with H&R Block, TurboTax automatically transfers all the information from your federal return to your state return. The process for adding a second state, if necessary, is slightly more cumbersome, as you have to navigate an additional drop-down menu. But that’s a pretty minor issue most taxpayers (being single-state filers) don’t have to worry about.

TaxAct’s State Tax Prep Process

TaxAct’s state return section is similar to the other two services’, with automatically imported information and thorough, state-specific questions. As with the federal return, it’s sometimes too thorough. It starts immediately after you finish your federal return, though you’re free to leave it for later.

Accuracy Check

All three programs include a post-prep accuracy check designed to ensure your return is prepared correctly and you’re not set up to pay more than you should.

H&R Block’s Accuracy Check

Every year, before filing, H&R Block has rechecked my entire return for accuracy. I can view my federal and state returns and specify how I want to pay the tax I owe. When I’m eligible for a refund, which doesn’t happen every year, it asks how I’d like to receive it as well.

The process ends smoothly and takes less time — without being any less thorough — than the other two options.

TurboTax’s Accuracy Check

TurboTax follows your state return by reviewing the entire package for accuracy and assessing your audit risk with a handy thermometer graphic. And TurboTax is nothing if not thorough, presenting each accuracy- or audit-related issue and recommended solution in turn before walking you through how you’d like to pay your taxes or receive your refund. Though this thoroughness does lengthen the process of filing taxes, it’s a trade-off some filers may be willing to make.

TaxAct’s Accuracy Check

Like TurboTax, TaxAct waits until you’ve completed all your returns to review them for accuracy, saving some time. However, the review process is more complicated than TurboTax’s and H&R Block’s, with different alert levels (red, yellow, and green) that identify issues of varying severity. TaxAct uses these alerts to assess your overall audit risk, though it doesn’t display this risk in a handy graphic like TurboTax.

You can also skip the alerts altogether if you’re confident you’ve kept everything aboveboard — a nice perk for seasoned filers. One drawback is that there’s no easy way to run your completed return by a professional tax preparer. Both H&R Block and TurboTax offer that option for an additional fee.

Once you pay for TaxAct’s prep services, the platform asks you how you’d like to receive your refund or make any tax payments you owe, then walks you through how to prepare for next year’s taxes. That includes introducing its Donation Assistant app, which can help you track and quantify noncash charitable donations throughout the year, and DocVault, a secure mobile-friendly storage service for important tax-related documents. Despite these services’ genuine usefulness, this part of the process drags on too long when the end is in sight.

Additional Features & Capabilities

All three platforms have some additional features and capabilities worth noting. These include the ability to pay tax prep fees with your tax refund (if you’re entitled to one), digital self-help resources and tax reference materials, and optional tax audit assistance or defense add-ons.

H&R Block’s Additional Features & Capabilities

H&R Block’s refund bonus and user-friendly online help database set it apart.

  • Refund Bonus. H&R Block is one of the few remaining online tax prep platforms to offer a refund bonus. Despite shrinking from 10% in the early 2010s to 3.5% in 2020, it’s better than nothing — $35 for every $1,000 refunded. You do have to take your refund on an Amazon gift card, which is a drag for people who prefer straight-up debit cards. You can still receive your federal refund on a reloadable prepaid debit card, just without any extra cash. See H&R Block’s refund bonus terms for more information.
  • Pay With Your Refund. You can pay your federal and state tax prep fees with your federal refund for an additional service charge of $39.95 (subject to change).
  • Audit Defense. H&R Block’s Worry-Free Audit Support package is a bargain at about $20 per year. It pairs you with an H&R Block EA to help you interpret and respond to IRS correspondence, prepare for an IRS audit, and deal with the audit itself (with the option for in-person representation if needed).
  • Online Help Resources. H&R Block has an extensive online knowledge base covering a slew of common and not-so-common tax questions as well as H&R Block’s tax prep software itself. The database is searchable and mobile-friendly.

TurboTax’s Additional Features & Capabilities

TurboTax doesn’t have a refund bonus, but its reasonable pay-with-your-refund fees and extensive online help resources shine.

  • Pay With Your Refund. You can pay your TurboTax prep fees with your federal refund for an additional $34.99 processing charge (subject to change and may vary by state). There’s no option to pay with your state refund.
  • Audit Defense. TurboTax offers free basic audit support for all clients. This service extends to interpreting IRS correspondence and preparing a response. For help preparing for an audit and representation during the audit process, you must add TurboTax’s Max package, which costs about $60 and includes audit representation and identity theft monitoring.
  • Online Help Resources. TurboTax has a searchable help database and an extensive knowledge base filled with user-generated questions and answers. It’s immensely useful for the tax-curious, if a bit overwhelming.

TaxAct’s Additional Features & Capabilities

TaxAct doesn’t offer a refund bonus but does have a cheap pay-with-your-refund option and a reasonably priced audit defense add-on.

  • Pay With Your Refund. You can pay your TaxAct tax prep fees with your state or federal refund for a processing fee of about $20 (subject to change).
  • Audit Defense. TaxAct only offers audit defense through its Protection Plus add-on, a third-party package that includes full IRS and state representation in the event of an audit. TaxAct does have a self-service audit assistance portal that helps clients interpret IRS and state tax letters but doesn’t make human employees available for this function.
  • Online Help Resources. TaxAct has an extensive online help database that’s fully searchable and organized by tax year. It’s a helpful resource for clients with questions about prior-year returns or tax topics.

The Verdict: Should You Choose H&R Block, TurboTax, or TaxAct?

None of these tax prep platforms is perfect. Each has its strengths and weaknesses, and you should choose the software you use based on your tax situation and personal preferences.

You Should Use H&R Block If…

H&R Block is relatively easy to use and has moderate pricing and robust customer support. The experience is straightforward, with none of the bugs that plague TurboTax and without the overwhelming detail inherent in TaxAct’s interview process.

However, H&R Block could be a bit more friendly — and a bit more cost-competitive for filers who need some extra help. In general, H&R Block is suitable for people who have some tax filing experience and comfort with the basic contours of the process, including choosing the appropriate filing status and selecting the correct forms.

H&R Block might be the right choice for you if:

  1. You Value Transparent Pricing. H&R Block has transparent pricing. You always know exactly how much you’ll pay to file — and how much you’ll add to the final cost of your return if you need to upgrade to a higher-priced plan.
  2. You Want to Save Time. H&R Block has consistently been the fastest of these tax prep programs, at least for me. It hasn’t won by a mile, but the difference is notable enough to mention. The contrast with TaxAct is particularly acute.
  3. You Want a Refund Bonus. H&R Block continues to offer a refund bonus to filers who consent to transfer their tax refunds to Amazon gift cards. It’s impossible to say how much longer that will continue, but for now, it’s an advantage over TurboTax and TaxAct.
  4. You Need In-Person Support During or After Filing. H&R Block has a network of more than 10,000 branches across the U.S., making it easy to switch from online to in-person preparation if needed. TurboTax and TaxAct can’t say the same. H&R Block also offers free in-person audit assistance for all online filers, a key perk for folks who worry the IRS will audit them.

See our full H&R Block review for a complete analysis.

You Should Use TurboTax If…

TurboTax is significantly more expensive than H&R Block or TaxAct. Though its free plan has grown more robust in the past couple of years, it’s still lacking.

That said, you do get what you pay for: an intuitive interview process, a user-focused (and mobile-friendly) layout, and lots of support. It’s nice to be able to import from so many sources too. So TurboTax is ideal for novice tax filers as well as more experienced filers for whom affordability isn’t a top concern.

TurboTax is the right choice for you if:

  1. You Value User-Friendliness. TurboTax is the most user-friendly of these programs. Its design and aesthetic are intuitive and easy on the eyes, unlike the more cluttered, less intuitive TaxAct. Its questions are both simply worded and logical, whereas H&R Block’s interview questions and explanations can be confusing. And in addition to offering a powerful app, TurboTax’s regular version is very mobile-friendly. That’s good news for taxpayers who prefer to prepare their returns on a tablet.
  2. You Like Impressive Importing Capabilities. TurboTax has long been a leader in prior-year tax return importing. If you can upload your return in PDF format, you can import it to TurboTax without manually reentering information.
  3. You Depend on Good Customer Service and Help Functions. TurboTax has some useful support features, including a customer service hotline with extensive hours and a comprehensive knowledge base. I’ve referred to TurboTax’s knowledge base more times than I can count and have almost always had my questions answered to my satisfaction.

See our full TurboTax review for a complete analysis.

You Should Use TaxAct If…

TaxAct has always been the cheapest option of the three, and its functionality has improved significantly over the years. Now, it’s nearly (but not quite) on par with TurboTax and H&R Block.

That said, my TaxAct return has consistently taken longer than my TurboTax and H&R Block returns. The support infrastructure is unimpressive, though the tax audit defense no longer costs an arm and a leg — just $10 when you upgrade to the premium plan.

But TaxAct is no longer the best game in town for ultra-frugal filers.

In general, TaxAct is ideal for somewhat more experienced filers who don’t mind exchanging time for money. Though its interface has gotten more user-friendly over the years, it’s still not the best software for first-timers.

TaxAct is a solid choice if:

  1. You’re Set on Paying Less. TaxAct is the cheapest of these services. I have a complex tax situation, but I was able to walk away from my most recent filing without spending more than $79.90 (though that would have been $114.90 had I waited until later in the season to file). That’s less than I spent for tax prep with H&R Block and TurboTax. So while TaxAct has grown more expensive in recent years, it’s still the cheapest option among them.
  2. You Want a Price-Lock Guarantee. TaxAct offers a price-lock guarantee to all customers at sign-up. Once you create your account, you’re locked into TaxAct’s pricing at that moment, even if you leave your return for months and TaxAct raises prices during the intervening period. Since tax prep companies frequently raise prices close to the filing deadline, that’s great news for frugal filers. One caveat: TaxAct’s first price-lock step-up happened extremely early in 2020 (for the 2019 tax year), in late January. Another step-up occurred in mid-March. It’s likely the 2020 tax year will play out similarly.
  3. You Crave Useful Apps to Help You Keep Track of Important Forms and Records. TaxAct has useful tools that help you keep track of any necessary documentation you need to complete your return, including receipts, bills, and tax forms. You can add photographic records to a secure, mobile-accessible storage area (DocVault) throughout the year, potentially eliminating the need to file tax-related papers for reference at tax time. You can use a separate app, Donation Assistant, to calculate the fair value of noncash charitable donations, an extremely helpful tool for filers who donate valuable items, such as vehicles and furniture. In the past, I’ve had to scour the Internet for fair-value charts from reputable sources without any clear guarantee they’re accurate.

See our full TaxAct review for a complete analysis.

All Are Great If…

Despite clear differences, all three of these tax prep software programs have some selling points in common. If you have a simple tax situation or don’t want to visit a tax preparer’s office in person but otherwise aren’t too picky about how you get your taxes done, you can’t go wrong here.

Any of these tax prep options are good if:

  1. You Have a Simple Tax Situation. Whatever else you can say about TaxAct, TurboTax, or H&R Block, all three are effective — and dirt cheap if not free — for simple tax situations that don’t require attached schedules.
  2. You Need to Import a Prior-Year Return From Another Tax Prep Program. Although this hasn’t always been the case, all three programs now have robust prior-year return importing tools that make it easy to switch from another provider.
  3. You Don’t Want to Visit a Tax Preparer’s Office or Pay CPA Prices for Tax Prep. With the exception of TurboTax Live Full-Service and H&R Block’s Tax Pro Go, you’ll pay far less to prep your taxes with any of these services than with a full-service human tax preparer. And you won’t have to visit a physical office location, either — unless you’re prepping with H&R Block and decide you’d like to do that before filing.

Final Word

TurboTax, TaxAct, and H&R Block are three of the most popular online tax software options, but they’re not the only ones out there. A bevy of other options exists, from relatively well-known providers like TaxSlayer and eSmart Tax to lesser-known options like Circle CPA and FreeTaxUSA.

And the federal government can help with free tax preparation options thanks to the Free File Alliance (a consortium of about a dozen tax prep companies that offer free filing services to filers who meet certain income and residency criteria) and Free Fillable Forms, which are available to filers regardless of income or residency.

With all these options, depending on your tax situation, you might find one that’s easier, faster, or simply less stressful to use.

And if you don’t want to face a potentially hefty processing charge to pay your tax prep fees with your tax refund but don’t want to pay out of pocket immediately, use a rewards credit card to pick up the tab. If you stay within your card’s spending limit and pay your balance in full by the statement due date, you avoid processing fees and earn a small return on your outlay. Check out our roundups of the best cash-back credit cards and best travel rewards credit cards for ideas.

Source: moneycrashers.com

66 Questions to Ask When Buying a House – Redfin

As a first-time homebuyer, it’s easy to feel overwhelmed even before you begin your homebuying journey. After all, this is a new process for you and, simply put, you don’t know what you don’t know. First off, there are no silly questions you can ask during any stage of the homebuying process. So always feel free to ask a question, no matter how trivial you think it might be. You owe it to yourself – and your family – to find out everything you can about a home, especially since it will most likely be the largest investment you’ll ever make. To help you get started, we’ve created a list of 66 questions to ask when buying a house, broken down into each stage of the homebuying process to help keep you informed.

11 questions to ask before you go house hunting

As you well know, buying a house is a significant investment. Before you start house hunting, think through your goals for homeownership. Why do you want to buy a house? 

  1. Do you want to earn equity and build wealth by owning a house? 
  2. Do you expect you might need more space for a future family? 
  3. Do you have a pet or see one in your future and you want a backyard? 
  4. Do you want to live in a quiet, established area or somewhere more lively? 
  5. Do you enjoy yard work, gardening? How much backyard space do you require?
  6. Have you considered the local schools and neighborhoods? 
  7. Have you looked at crime rates around the neighborhoods you’re interested in? 
  8. Is it essential for you to live close to your work? Or, is a commute ok? 
  9. Have you narrowed down a range of purchase prices you can afford?
  10. How much money do you need for a downpayment? 
  11. Are you pre-approved for a mortgage

When you’re wrapped up in the excitement of house hunting, you may forget which questions to ask when buying a house.. If you are a pet owner looking at condos, you’ll have to be sure the homeowners’ association allows pets. Or, let’s say you want to live in a popular downtown neighborhood, but plan to have children in a few years – will this neighborhood still suit your needs? It’s always worth giving some thought to the type of home and area to help focus your search. 

Also, be aware that being approved for a home loan saves time for everyone by ensuring that you, as the buyer, can actually afford the home and be able to follow through an offer. 

7 questions to ask when you interview agents

Contacting the agent listed on the for-sale sign of a house you’re interested in may not be the best way to protect your interest as a buyer. When you work with your own agent, that agent’s job is to represent your interests. They help research the house, find answers to all of your questions, and serve as your professional intermediary for communicating with the seller’s agent and homeowner.

Naturally, you will want to choose a great real estate agent that you are comfortable with and feel like they have your best interests in mind. Most real estate experts recommend that you interview at least three agents identified by recommendations from friends and family who have bought or sold a house recently. Here are some questions to ask potential agents to see if they are the right agent for you.

  1. How long have you been a real estate agent? 
  2. What kind of experience do you have in this specific market area?
  3. Do you usually work with buyers or sellers? 
  4. How do you usually communicate with clients? What should I expect for response time? 
  5. How will you help me search for homes? 
  6. What days and times are you typically available for showings? 
  7. How will you ensure transparency about any issues you see with a house? 

When you set your expectations for communication, home tours, and other information you count on your agent to provide, you have a good chance to establish a productive relationship from the start – which will help you through your homebuying journey.

stylish living room

stylish living room

37 questions to ask when touring homes

This is an extensive list, and not every question applies to every situation. For example, if your goal is to purchase a single-family home, questions relating to condominiums don’t apply. However, this list of questions to ask when touring a house should give you an excellent start in making well-informed decisions when buying your first home. 

  1. What’s the reason for the sale? How long have the sellers lived there?
  2. How long has the house been on the market? 
  3. What is the neighborhood like?
  4. When was the house built? 
  5. What are the property taxes?
  6. Are there any upcoming condo or homeowners association fees?
  7. What are the average utility costs? 
  8. Have there been any major repairs to the property? If so, do you know if they provided a warranty?
  9. Are there any boundary disputes with neighbors?
  10. Are there any shared driveways or communal spaces?
  11. Are there any public rights of way passing through – or near – the property? 
  12. How old are the major appliances and systems?
  13. Are the appliances included in the sale?
  14. What is the sales history of this house, and how would it affect my offer?
  15. Is there enough storage space? Room to grow? 
  16. Is there any evidence of water problems? Can you see damp drywall, basement floors, or open leaks? Can you smell mildew? Or is there a smell of fresh paint that might be intended to cover up a water issue?
  17. Are the walls structurally sound? Look for cracks and look for evidence of cracks covered over by wallpaper that doesn’t look right or paint applied over filler.
  18. Is the chimney in good condition?
  19. Are the windows sound? Will any of the glazing need to be replaced?
  20. Do the ground floor windows have working latches to lock the windows? 
  21. Is the attic insulated? If so, when was the insulation installed?
  22. Is there any soundproofing in the house? (Try viewing the home at different times to hear road noise or neighbors.)
  23. Are there working smoke alarms and carbon monoxide alarms?
  24. Is there adequate cell phone reception indoors? How’s the broadband service in the area?
  25. What type of system is used to heat and cool the house? 
  26. Ask to see the circuit box – does the wiring look up to date?
  27. How is the condition of electrical outlets and switches? (You can bring something to plug into try outlets.) 
  28. Do all of the lights work? If not, why not?
  29. Does the property have any lead pipes? Do you see any issues with pipes in need of repair?
  30. What kind of drainage system does the property have? Is it on the city sewer, or is there a septic tank? 
  31. Is there any asbestos in the property, or has there ever been an asbestos survey completed?
  32. What kind of roof does the property have? When was it last replaced, and what is its current condition? 
  33. Do you see any gutter leaks? Are the gutters cleaned out, or do they need work? 
  34. Are there any trees growing within 15 feet of the property? Can you discern if roots are likely to be a problem? 
  35. Which way does the yard face, and is there any part of the yard that doesn’t receive sunlight throughout the day? 
  36. Would the real estate agent buy this house? If not, why not?
  37. What’s the lowest price you think we could offer for this house and still close the transaction?

You can ask these questions when buying a house – and others as applicable – to understand your likely overall costs to own this home. When you understand all of your costs, you’ll confidently be able to make an offer you can afford

open concept new kitchen

open concept new kitchen

11 questions to ask when making an offer and closing on a home

Real estate agents make offers on homes every day. Their job is to help you make the best offer while protecting you against potential risks with the transaction. 

  1. How does the offer work? Do we communicate with the seller or seller’s agent? 
  2. What contingencies do you recommend including in the offer? 
  3. How much earnest money should we put in the offer? 
  4. When do we need to provide earnest money? 
  5. When should we expect to hear back from the seller? 
  6. If we receive a counter-offer, when do we need to reply? 
  7. How can we sign the paperwork? Digital? In-person? 
  8. If the offer is accepted, what are the next steps? 
  9. How far out is the potential closing date from an accepted offer? 
  10. What are our next steps once the offer is accepted?
  11. What do we do at closing? 

Your real estate agent wants to make the home buying transaction as smooth as possible. If they do not provide this information upfront, be sure to ask. 

You should prepare a list of your own questions to ask when buying a house. It can include any given here, or others that represent your own interests and concerns. Answers to these questions will ease your mind and help you understand what you can expect during each stage of the homebuying process. Completing your research is perfectly acceptable, but don’t skip asking questions of your mortgage broker, real estate agent, and title company. When you gather enough information, you can make the best decision buying your first home. 

Source: redfin.com

What Do HOA Fees Cover: Homeowners Association Expenses Explained

What is an HOA?

Are you confused about the meaning of an HOA? HOA is short for a homeowners association. Lots of people ask real estate agents how an HOA works and what purpose does it serve. Once they understand the purpose of a homeowners association they ask what the HOA fees cover.

An HOA is a group or organization in a neighborhood that makes and enforces rules and regulations for homes or condos for the benefit of its owners.

Buyers who purchase within an HOA become members and must pay association dues, known as HOA fees.

Before buying into an HOA, it is vital to understand the rules and regulations. You may find that some of the rules are not what you’ve been accustomed to. In fact, if the rules and regulations are overbearing, you could find yourself in the position of not wanting to live within the neighborhood.

On the other hand, you may love the thought of having guidance and uniformity. Some of the biggest advantages of living in an HOA are preserving and upkeep of the homeowners association’s homes and neighborhood.

One of the most common questions home buyers have is what do the HOA fees cover? Let’s take a deep dive into what you need to know about homeowners association expenses.

HOA Fees
How Do HOA Fees Work?

What Are HOA Fees?

Homeowners association fees are paid to maintain the common areas and shared spaces in your home and neighborhood. Being part of a homeowners association makes it a lot simpler to live in than having a home where you are responsible for all the maintenance.

So, if you have an expensive emergency in your house, you have to find the money to fix it. Where in the HOA, expenses are shared amongst everyone in the community.

An elected committee governs the HOA fees in your neighborhood. All of the expenses should be approved by those who reside within the community.

In larger HOAs, there is often a paid office team organizing contractors and paying bills. Other HOAs can be staffed by using outside contractors. Sometimes this can be a problem when work is not completed satisfactorily.

HOA costs depend on the neighborhood and type of project. It is not uncommon for HOA fees to range anywhere from a few hundred dollars up to $1000 in some luxurious settings.

Homeowners association fees are influenced heavily by what kind of perks are offered for living within the community. For example, neighborhoods that offer community pools, gyms, and tennis courts, naturally would cost more to maintain and operate.

However, a lower-cost townhouse without a pool, gym, or other amenities could be far less expensive. Costs can be as low as $100 per month in some locations around the country.

HOA expenses in a high-end city center may include concierge, spa, and gym, making them much more expensive to live in. You could potentially see fees as high as $3-$4 thousand per month. Think of the rich and famous.

How Are HOA Expenses Distributed?

If you live in an HOA within a condo or townhome complex, you may have underground parking, with a car space allocated to every apartment in the building. Part of the maintenance with this living style is security, as we all feel safer in a secure building.

Rubbish collection is another cost, as rubbish has to be taken down to the basement and removed from the building. Companies are often hired to fill this role.

The pool must be maintained, the ground manicured, plants pruned, and the gym equipment is cleaned. While these perks are probably the reasons you bought in, the cost can be a bit high for some retirees. Perks such as these are often standard in retirement communities. It is often a significant reason seniors downsize into a neighborhood that has an HOA.

Do Homeowners HOA Fees Go Up?

Of course, everything rises with inflation, and there will always be new projects or remedial work to be carried out on the homes and neighborhood.

Some HOAs schedule increments annually, so if you are preparing a five-year budget, you may want to factor in the cost. Doing so will be helpful to work out what your expenses will be projected at in the future.

It will be vital before buying to take a look at the homeowners association bylaws, rules, and regs, along with the latest financial state. You should make sure to have a contingency for document review in your offer.

What If You Can’t Pay The HOA Fees?

You can be fined or taken to court, and a lien could be placed on your property. It can also be embarrassing not to pay because, in committee meetings, they often have nonpaying homes as agenda items and discuss strategies to recover the funds.

HOA expenses are very much worth paying, as in most cases, you do get your money’s worth. Because there is power in numbers, you often get better value for money with more people paying to get the best deal for your HOA.

Before you move into a condo, townhouse, or home, check how your HOA fees will be apportioned, and make sure no special assessments are pending.

Special assessments would mean that you will have to come up with an extra lump sum to fix an unexpected expense. Nobody likes financial surprises, so it is essential to research any significant expenditures on the horizon.

How Do I Choose The Right HOA Neighborhood?

Form a working relationship with a high-profile local agent. Once they know what you are looking for, they will help you to find your perfect HOA.

The best buyer’s agents will know most communities in the town or area. Real Estate agents have their ears to the ground and often hear positive or negative things about a particular neighborhood and the accompanying homeowners association.

Moving into an HOA is a terrific idea when it is a well-oiled machine. Living within a homeowners association can make your life more simple, especially from a maintenance standpoint. If you’re the kind of person, who travels a lot, it really makes a lot of sense.

First-time home buyers who do business travel could find living in an HOA to be the perfect situation.

Final Thoughts on HOAs

In the area you are planning to live in, there hopefully will be a wide range of suitable HOAs to choose from. As long as you pick an HOA neighborhood that does not have strange bylaws or overbearing rules, you’ll probably enjoy the living situation.

The key is doing the proper due diligence. Without that, you could make a bad mistake that you’ll regret. Take the time and do the proper research. Hopefully, you have found this guide to HOAs to be useful. You should now know a bit more about what HOA fees cover.

Source: realtybiznews.com

Should I Buy a Backup Standby Power Generator for My Home?

In October 2019, Californians experienced a series of rolling blackouts aimed at preventing wildfires. Afterward, Aaron Jagdfeld, the CEO of home generator company Generac, told CNBC its sales there had more than tripled. He also said generators were going quickly in the Northeast as homeowners sought emergency power in the wake of repeated hurricanes and ice storms.

Demand for generators tends to surge after major storms as people realize how easily they could be stuck without power for a week or more. In 2014, I learned firsthand what it was like. Over 14 days, we had eight power outages varying from a few hours to a full day. After 10 days of bitter cold and limited connection to the outside world, I found myself wondering whether we should buy a backup power generator.

But I didn’t take the plunge right away. Instead, I took the time to do some research on generators first — their downsides as well as their benefits.

If you’re thinking about buying a generator, it makes sense to do the same thing. Before you shell out the money, consider the purchase from every angle — the costs, downsides, hassle, and what you really want the generator to do. That way, if you decide to take the plunge, you’ll know how to pick the best type of generator for you and your family.

Should You Buy a Backup Power Generator?

Only certain people need a generator to make it through a disaster. How well you can manage without one depends on where you live and how much you rely on electricity at home.

For instance, Sandra Bockhorst of American Preppers Network writes that she managed just fine during a week without power in Puerto Rico after Hurricane Hortense by using stored water, kerosene lamps, and a propane grill. However, after moving to Pennsylvania, she decided to buy a generator after a series of storms took out the power to her farm and nearly cost her a freezer full of food.

To figure out whether a generator is a worthwhile investment for you, you must be able to answer several questions:

  1. How Common Are Power Outages? Only buy a generator if you’re really going to need it. If the power grid in your area goes down every time there’s a big storm, a generator could make a significant difference in your comfort — but if you’ve had one blackout in the last five years, you can probably get by without one.
  2. How Long Do They Last? Even frequent power outages are no big deal if they only last a couple of hours. A generator is much more useful for handling prolonged outages that last for days. And if blackouts in your area can last for weeks, it could be worth investing in a more expensive generator that lasts longer.
  3. How Extreme Is the Weather in Your Area? Think about the weather conditions in your area. In a mild climate, going a week without heating or cooling could be no big deal. But if you live in the Deep South, where summertime temperatures can reach over 100 degrees F with punishing humidity, a whole week with no air conditioning could be incredibly unpleasant or even unsafe. And if you live in a very cold area, you have to worry about both protecting yourself from frostbite — which you can probably manage with enough layers of clothing — and keeping the pipes in your home from freezing and bursting in the cold.
  4. Do You Have the Space? A running generator needs a spot in your yard that’s a safe distance from your home. Stationary generators have to stay in this space all the time, and portable ones also need a separate space for storage. Both types require a supply of fuel, which you must also store.
  5. Do You Have the Time? It takes a bit of work to keep a generator in good running order. And if it’s a portable generator, it takes effort to set it up and get it started during a storm. That’s a hassle that could outweigh the benefits of getting the power back on a little sooner.
  6. What’s Your Budget? Generators cost hundreds or even thousands of dollars — and that’s not even counting fuel costs. Not everyone has that much money to spare, and everyone has other things they could do with it. Consider what else you might use the money for, then think about whether a generator is really what you want most.
  7. What Are the Alternatives? The more dependent you are on electricity, the more a generator is likely to help you. Make a list of all the things you use power for at home — for example, heating, cooling, and refrigeration. For each one, ask yourself whether there’s some alternative you could rely on if the power were down for a week. If you have no other way of keeping your home warm or cool or rely on your well-stocked freezer for your food supply, then keeping the power on at your home is crucial. But if your only real concern is keeping your cellphone working, there are other options, such as solar and hand-crank chargers.

You can answer some of these questions based on previous experience. But others require a bit more information. Before you can make an informed decision, you need to know more about how generators work, their costs, the amount of space and maintenance they require, and the possible alternatives.

How Backup Generators Work

A generator works on the principle of electromagnetic induction. That means that when you move a wire through a magnetic field, it creates a current in that wire. A generator simply spins a magnet repeatedly around a wire, forcing electrons through the wire like a pump forcing water through a pipe.

To make the magnet turn, a home power generator contains a small engine, which can be powered by gasoline, liquid propane, or natural gas. The engine pushes a piston back and forth, causing the generator to turn and produce a steady electric current.

There are two main types of home power generators: portable and stationary.

Portable Generators

These smaller generators are mounted on wheels. When a power outage hits, you have to wheel the generator outside, start it, and hook it up to your home’s power system. You can plug your devices directly into the generator or hire an electrician to install a special cable called a manual transfer switch, which feeds the current into your home’s electrical system. From there, you can flip the circuit breakers to route power to the devices you need, such as the fridge and lights.

Portable generators can typically provide enough backup power to keep a few critical systems running, such as your refrigerator and a few lights.

Stationary Generators

Also known as a standby generator, a stationary generator sits in a permanent location outside your house. A stationary generator has an automatic transfer switch built in. If the power goes out, it automatically starts and feeds power into your home’s systems.

Standby generators are bigger than portable ones and can produce enough wattage to run an entire house. However, these whole-house generators are a lot more expensive than portable generators, and you have to hire a professional to install one.

Downsides of Owning a Generator

The benefits of owning a generator are easy to see.

When a storm knocks out power to your area, and all your neighbors are shivering in the dark, you’ll still have heat and lights. If the power outage continues for several days, your generator can also save hundreds of dollars’ worth of food in your fridge and freezer. And if you choose a portable generator, you can take it with you to power a few essential gadgets on a camping trip or at a tailgate party.

However, that doesn’t mean everybody should rush out to buy one. Owning a generator has its share of downsides, including cost, space, maintenance, noise, and safety considerations.


Home generators aren’t cheap. According to Consumer Reports, the smallest portable models are good for powering your fridge, a sump pump, a few lights, and maybe a TV, and they cost at least $400. Larger portable models can run bigger appliances, such as an air conditioner, and can cost up to $1,500.

Standby generators are more convenient to use but usually run at least $2,000. On top of that, you have to pay a professional installer to hook them up. According to Consumer Reports, generator installation can cost anywhere from a few thousand to over $10,000.


It can be hard to find a place to use a portable generator. It has to be on level ground and at least 20 feet from your house — but close enough to connect to it with an extension cord.

You also have to protect it from the weather because it could electrocute you if it gets wet. But you can’t put it inside a shed. It’s unsafe to run in an enclosed space. And between uses, you have to find a place to store it to protect it from harsh weather and theft.

Stationary units live in the same spot in your yard year-round, so you don’t need to worry about storing them. However, they take up a fair bit of space and can be unattractive.

You also need to store fuel for your generator. That’s easy if you have a home standby generator that runs on natural gas, but you must store gasoline and propane outside your home for safety reasons. That said, you must keep the fuel locked up to protect it from thieves and vandals, which means adding a shed or detached garage unless you already have one.


Like any appliance, a generator needs regular maintenance to keep it running well. You have to keep it fueled and check the oil, filters, and spark plugs regularly. You also need to start it monthly and run it for about 20 minutes to keep the battery charged and the fuel lines free of moisture.

You also have to maintain your fuel supplies. Gasoline can go bad over time, so you must add a fuel stabilizer and refill your cans every year or so. Regular maintenance is necessary if you want to be able to count on your generator to work when an emergency strikes.


Generators are loud. The best ones are quiet enough to avoid bothering you while you’re indoors, but you could still get complaints from the neighbors. Some towns even have anti-noise ordinances that restrict how loud your generator can be or at what times you can use it.


You have to be careful when using a portable generator. It must be properly ventilated to avoid causing a fire or producing deadly carbon monoxide. HuffPost reports that during Hurricane Sandy, generators were responsible for at least nine deaths, mostly from carbon monoxide poisoning.

Even a properly vented generator gives off some fumes. So ensure it is at least 20 feet from all doors and windows to avoid letting any harmful fumes into the house. Burning gas or propane produces carbon dioxide, which is toxic to humans. It’s also the main gas responsible for climate change. That means the more you run your generator, the more you increase your carbon footprint.

Alternatives to Owning a Generator

Despite the many drawbacks of owning an emergency generator, some people think they have no choice because it’s the only way to keep the power on. But there are other ways to provide power for a few of your devices — or to get by with no backup power source at all.

In many cases, it’s possible to stay safe and comfortable for at least a few days without electricity.

Portable Power Stations

If your power needs are modest, you can meet them with a device called a portable power station. These backup power mini-systems are basically large batteries inside protective cases with built-in AC outlets and other ports for plugging in your various devices.

According to Wirecutter, they weigh around 50 pounds and can store anywhere from 100 to 1,800 watts of energy. That’s enough to keep key electronics, such as a phone or laptop, running for hours or even days at a time.

Unlike generators, portable power stations run silently and don’t require a backup supply of fuel. You can charge them with ordinary household current or, in some cases, with a solar panel.

However, they typically cost more than portable generators, and their power output is insufficient to run your central air conditioning or any large appliance. And even if you’re using them only for electronic devices, fans, or medical equipment, such as a CPAP machine (breathing mask), they can’t store enough juice to get you through a weeklong blackout.

Cooling Methods

There are many ways to stay cool without air conditioning. You can block out the sun’s hot rays with curtains and reflective window film and keep your home well insulated to prevent it from heating up as quickly. At night, when it’s cooler, you can open windows to let in the breeze.

You can also cool yourself, rather than the space around you. Taking a cold shower or applying cold compresses lowers your body temperature directly. Or if your home has a basement, you can retreat down there during the day to take advantage of the cooler temperature.

Heating Sources

Most heating systems depend on electricity to either create heat or distribute it throughout the house. So if a winter storm takes out the power to your home, you need some way to stay warm until the power comes back on.

You can heat an indoor space with a wood-burning or gas-burning fireplace, wood stove, pellet stove, or kerosene heater. Like a generator, all these fuel-burning appliances need proper ventilation for safety.

And if the winters in your area aren’t all that cold, you might be able to get away with bundling up in your warmest clothing and piling on the blankets at night.

Water Supply

If your home is hooked up to the municipal water and sewer lines, a power outage shouldn’t disrupt your water supply. But if you have a well that works with an electric pump, you need another source of water for bathing, drinking, and flushing your toilets.

One solution is to store water in jugs to get you through an emergency. The Centers for Disease Control and Prevention recommends keeping at least 1 gallon of water per day for each person and each pet in the house in your family emergency kit. Ideally, you should have a total of 14 gallons per person — enough to get you through two weeks without water.

You can also use rainwater collected in buckets or a water barrel for washing or flushing toilets.

Backup Power for Sump Pumps

Many homes rely on a sump pump to keep the basement from flooding. But if a storm knocks out the power, it can disable the pump when you need it the most.

To avoid this problem, you can choose a pump with a battery backup, which uses a car or boat battery to keep it going while the power is out. If you’re on the municipal water system, another option is to install a backup pump that relies on water pressure rather than electricity.

Food Storage

During a prolonged power outage, keeping your refrigerator door closed as much as possible helps the food stay fresh. Food stored in a full freezer should stay safe for up to 48 hours without power, according to the U.S. Department of Agriculture. However, food in the refrigerator will go bad much faster.

Packing the fridge with blocks of ice or dry ice can keep food safe to eat for a couple of days. Alternatively, you can transfer perishable food to a cooler, which requires less ice to pack. A good rule of thumb is to eat all your perishable food first, before it goes bad. After that, you can rely on shelf-stable foods, such as canned goods, cereal, pasta, dry beans, crackers, peanut butter, and powdered or ultra-pasteurized milk.

Cooking Methods

If you have a gas stove, you can continue to use it during a power outage. Most modern stoves use electric igniters, but you can always light them the old-fashioned way — with a match.

You can also cook outdoors on a grill, portable camp stove, or solar cooker. If you have a wood-burning stove or fireplace, you can do some cooking on that.

Power for Phones

If you have an old-fashioned landline phone — the kind that runs on actual copper cable — it will probably still work during a power outage. If not, there are several ways to recharge your cellphone when the electricity is out.

For $25 to $80, you can buy a solar phone charger that can top up your phone battery after about half an hour in direct sunlight. There are also inexpensive hand-crank chargers, which often double as emergency flashlights or portable radios. And finally, you can conserve your phone’s battery power by keeping it switched off in between calls.

Lighting Sources

At night, you can keep your home lit with candles, flashlights, or battery-powered lanterns. Modern LED technology makes it possible for a lantern or flashlight to last a lot longer on one set of batteries. However, it’s worth keeping extra batteries on hand in case the power outage goes on for weeks.


In the modern world, we tend to rely a lot on electronic gadgets — TVs, smartphones, computer games — to keep us amused. During a power outage, you have to fall back on more old-fashioned diversions, such as books. Besides reading to yourself, you can take turns reading aloud with your family members to entertain each other.

You can also work on jigsaw puzzles or play tabletop games, such as board games, card games, and party games like charades.

Final Word

In the end, my husband and I decided not to invest in a generator.

Instead, we opted to find other ways to prepare for winter storms. We installed a gas fireplace for heat, bought a hand-cranked radio that could also charge our cellphones, and got an LED lantern for lighting. These supplies — plus a gas stove and plenty of water, nonperishable food, and books — give us the confidence we can make it through another long stretch without power if we have to.

And in the end, that’s the most critical consideration: peace of mind. If you can’t sleep easy without a generator or some other backup power source to get you through a lengthy power outage, then a generator is a worthwhile investment, regardless of what the numbers say.

But if you decide the expense and effort of owning a generator outweigh the benefits, there are plenty of other ways to weather a natural disaster.

Source: moneycrashers.com