TaxAct is trustworthy tax preparation software that offers users step-by-step instructions for filing and getting the most out of their tax return. Find out if it could be right for you this tax season!
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TaxAct offers a no-frills approach to getting taxes done for less than the competition, making it a great budget choice. Consumers looking for an easy and inexpensive tax filing option can choose from one of four levels.
In many ways, TaxAct is similar to the competition and offers an easy-to-navigate interface. In other areas, it falls short. This TaxAct review will go over the software’s features, cost, and ease of use.
What is TaxAct?
TaxAct is an online tax preparation software allowing users to file a simple federal tax return for free. For users who need more features or greater support, TaxAct has three more online options that fit the needs of homeowners, investors, self-employed business owners, and freelancers.
While the basic federal tax filing option is free, state taxes come with a separate price tag that can be higher than competitors. If you’ve used other tax filing software, you will find that the data entry process is similar for TaxAct.
Several features make TaxAct a good option for filing your taxes:
Get help from a tax pro. TaxAct just rolled out a new option, called TaxAct Xpert Help, which gives users access to a tax professional for a fee. Since some competitors already have this service, it’s a nice addition to TaxAct’s offerings.
Import last year’s tax return. Instead of entering data from all those little boxes, TaxAct offers the option to import last year’s tax return and make your life easier. The return needs to be a PDF for all the data to transfer. It doesn’t have to be a TaxAct return – this works with competitor returns from TurboTax, H&R Block and others.
Auto-import tax documents. Not only can you use last year’s tax return, but you can also import W-2s and 1099-B information from your broker, provided it’s in the correct format. Not all options support importing tax documents so double-check that the version you’re using offers this.
Help with the FAFSA. Are you planning to fill out the FAFSA application for student aid? TaxAct gives you the option to use your tax information to fill it out, saving you time and frustration.
Help calculating charitable contributions. TaxAct offers a feature called Donation Assistant, which helps you figure out the deduction value of donations such as clothes and goods. It’s available with the Deluxe, Premier and Self-Employed packages.
Deduction maximizer. TaxAct’s proprietary tool works to uncover certain qualifying deductions and credits that you may not realize are available to you. This can help you maximize your deductions.
Accuracy guarantee. TaxAct offers a $100K accuracy guarantee its software is 100% accurate and gets you the maximum refund. In case of an accuracy error, TaxAct promises to refund you the software costs and pay the difference in your lower refund or higher tax liability, plus any legal costs or audit costs of up to $100,000.
My TaxPlan. This feature provides users with expert-level tax knowledge and insights to boost their refund and pay less taxes. Once a user files a return, My TaxPlan analyzes it and offers a custom list of tax-saving opportunities to increase next year’s tax refund.
TaxAct offers four different packages depending on your filing needs. When you create an account and start your tax return, you will automatically be directed to the free version. As you fill out the information, you may be asked to upgrade to a different package depending on your income or filing needs.
Just because you get bumped into a different pricing tier, doesn’t mean that you have to continue. Since you don’t pay for the service until you file your taxes, you can opt-out before that point.
If you know you will need more features than the free option, you can start with the level that best fits your needs. TaxAct offers the following filing options:
- Free – The free version is best for simple filers who have dependents, college expenses and/or retirement income. Federal returns are free, while state returns are $4.95 per state filed.
- Deluxe – The deluxe option includes itemized deductions, child and dependent care expenses, mortgage and student loan interest, real estate taxes and health savings account (HSA) deductions. As of Feb. 15, 2021, deluxe users can file a federal return for $24.95 plus $44.95 per state return filed.
- Premier – Premier includes everything in the free and deluxe options plus investments, sale of home and rental property income. You can also report foreign bank and financial accounts. As of Feb. 15, 2021, premier users can file a federal return for $34.95 plus $44.95 per state return filed.
- Self-Employed – This option is best for freelancers, contractors, and small business owners. It includes everything in the premier package plus freelance income, business & farm income, personalized business deductions, depreciation calculator, deduction maximizer and more. The cost for a federal return as of Feb. 15, 2021, is $64.95 plus $44.95 per state return filed.
Each package can also be combined with Xpert Help for an additional fee. Below are prices for each level:
TaxAct Pricing vs. Competition
TaxAct is cheaper than the competition, but savings may vary. Depending on the competitor and package, you can save anywhere from a few dollars to 50 percent. Below is a comparison chart between TaxAct and TurboTax, which is a popular option:
Some competitors offer other features at those higher price points, which may make them worth choosing over TaxAct.
Read more: What Is The Cheapest Tax Software?
How to Sign Up with TaxAct
Getting started with TaxAct is easy. You can pick the package you think best fits your situation or start with the free version and go from there. If you start with the free version but get to a point where you need a form or a feature that’s not available, you can choose to upgrade.
First, you will need to create an account and verify it to proceed. Choose a username and password, set up your security questions and agree to TaxAct’s terms and conditions before proceeding.
Once you’ve logged into your account, you will need to provide some information to get started. Save time by uploading last year’s tax return if you have it in a PDF format. Otherwise, you’ll have to enter everything yourself.
TaxAct will walk you through seven tabs including basic information, life events, federal tax return, state tax return, tax return review, filing, and next year tax prep.
The Basic tab requires users to enter information such as name, social security, dependent information, filing status and so on.
The Life Events tab asks for milestones that could affect your filing such as having a child or getting married.
The Federal tab asks for your federal tax return information such as income, deductions, credits, taxes owed and so on.
The State tab gets populated using data from your federal entry and asks you the state where you want to file. Once you select your state, the program will walk you through a series of state-specific questions to help prepare your state tax filing.
The Review tab flags potential issues in your federal and state returns, including complete or inconsistent information, potential inaccuracies and potential tax savings.
The Filing tab is where you chose how to file your tax return and complete the filing process. E-filers will need to enter payment information while those who prefer the paper route can print the tax forms and mail them.
The Next Year tab helps you prepare for the following year’s tax filing, with helpful features such as determining your withholding allowances and estimating tax liability.
Using an online tax software such as TaxAct requires entering personal data such as date of birth and social security number. To protect users, TaxAct has put in place several features during the sign-in process to ensure the right person is accessing the account.
This includes more complex password requirements, two-factor authentication using a mobile phone or Google Authenticator, and trusted device verification. Users can also set up their own security rules under the “My Preferences” section.
TaxAct will also alert users if they enter a social security number that already exists for another user. This can help you identify typos or alert you to possible identity theft.
The software platform uses industry-standard SSL (Secure Sockets Layer) protocol for data encryption, message integrity, and server authentication.
Mobile Support and Accessibility
Users who prefer to use a mobile device such as a smartphone or a tablet for tax filing are in luck. TaxAct offers a free mobile app called TaxAct Express, which is available for Android and iOS devices.
The app allows users to prepare and e-file both federal and state tax returns using a mobile device. It supports all four online product options: free, deluxe, premier, and self-employed. Users can switch seamlessly between the computer and app versions, and pick up where they left off.
TaxAct Express offers step-by-step guidance along with accuracy checks, personalized product recommendations based on your situation, and quick tips to help you navigate your return seamlessly.
Security features include touch ID/Face ID support for secure log-in, along with two-factor authentication. You can view, print, or save your federal return PDF using the mobile app. If you need support, the app offers quick and easy access to customer service and feedback options.
Just like the desktop version, the TaxAct app comes with a maximum refund and $100 accuracy guarantee, which covers software errors.
Read More: Comparing the Best Tax Software Programs
TaxAct Customer Service and Support
TaxAct offers several customer service and support options to help users find answers and get guidance when filing a tax return. These include:
- Help topics – TaxAct’s searchable online database offers answers to questions you may have about the software, the mobile app, or your taxes.
- Technical support – If you can’t find the answer to a technical issue, you can contact TaxAct’s free tech support via email or phone.
- Pro help – TaxAct now offers access to tax pros if you purchase the Xpert Help service option. This gives you the option to get live, unlimited on-screen help from a tax expert.
Xpert Help support is now available. Get real-time, one-on-one tax support from a CPA or other tax experts to help you navigate your individual tax situation. Call during regular business hours or schedule a call (available in select states).
Support hours vary depending on the time of year, with increased access between January and April. Tax season hours offer support Monday – Friday between 8 a.m. and 8 p.m. CST; Saturday 9 a.m. – 5 p.m.; and Sunday 10 a.m. – 5 p.m. The rest of the year, with a few exceptions, customer support hours are 8 a.m. to 5 p.m.
Customer Service representatives can be reached by email or phone:
- Email: email@example.com
- Phone: (319) 373 – 3600
No one wants to get audited, but in case you do, it’s important to know what kind of support you can expect from your tax preparation software. Most providers offer information and guidance about what to expect during an audit, but they won’t offer you full representation from a tax professional in front of the IRS.
This is the case with TaxAct. If you get audited, you can get details on what to expect from their website but don’t expect the company to step up and represent you in front of the IRS. TaxAct has partnered with Protection Plus to offer users the option to buy audit defense for an additional fee.
Protection Plus covers your tax return for three years and will assist with both federal and state audits. It offers full-service audit help, including guidance throughout the process and handling correspondence with the IRS on your behalf. The company will also help you with denied credit, tax fraud incidents, and tax debt.
When you file your return, you’ll be given the option to enroll in Protection Plus. If you opt to purchase the coverage, you will contact the company directly to request assistance.
TaxAct Pros and Cons
May be cheaper than competitors — Depending on the competitor, TaxAct can save you anywhere from a few dollars to 50 percent on federal tax returns.
FAFSA assistance — Users applying for college aid using the FAFSA will appreciate TaxAct’s help with filling out the application.
Mobile friendly — TaxAct’s mobile app offers full tax prep on the go, allowing you to switch between the desktop and mobile versions.
Helpful features — Features such as deduction maximizer, donation assistant and error alerts can help you maximize your return and reduce your chances of an audit.
Help from a tax professional — For an additional fee, TaxAct gives you the option to talk to a professional and get your tax questions answered.
State return fees can be high — While federal return filings can save you money, state returns can be more expensive than other options.
Fewer bells and whistles — TaxAct doesn’t offer many of the additional features you can get with competitor software.
Complex pricing — Pricing depends on what forms you need when filling out your return so you don’t know how much you will pay until you’re ready to file.
When it comes to tax preparation, there are alternatives that may be a better fit for your needs. Here are a few options to consider as an alternative to TaxAct.
Cash App Taxes
Cash App Taxes offers free tax preparation and filing for both federal and state taxes. Even if you take deductions or credits, you can still use the service for free. The tax software offers a streamlined filing process that shows you only the sections you need to fill out based on your tax situation. Other features include free audit defense, max refund guarantee, accurate calculation guarantee and the ability to import previous year’s tax returns from competitors. However, Cash App may not support more complex tax situations and doesn’t offer access to experts who can answer questions.
H&R Block is a well-known tax preparation service that offers both online and in-person tax filing options. It’s more expensive than TaxAct, but it also offers a free tax filing option with no-cost state tax filing. H&R Block offers streamlined tax preparation with step-by-step guidance, mobile app W-2 capture, real-time refund and free information, and a max refund guarantee. Customer support is very robust with phone, video chat, Twitter, and in-person options at H&R Block physical locations.
TurboTax is another popular tax preparation option that offers online tax preparation and filing. Just like TaxAct, TurboTax offers a free simple tax return option with no-cost federal tax filing. Unlike TaxAct, state tax filing is free. There are three other packages that closely reflect those available through TaxAct, but at higher price points. TurboTax offers deduction estimates through integration with ItsDeductible, prior year tax return imports in PDF format, and free expert final review. Users can also get professional tax preparation assistance through TurboTax Live. The TurboTax mobile app allows you to file your return from anywhere and switch seamlessly between desktop and mobile devices.
FreeTaxUSA is a no-frills online tax preparation software approved by the IRS. Federal returns are free, while state returns cost $12.95 per state filing. It can handle simple tax returns and more complex ones, including home ownership, HSA contributions, Earned Income Credit, investments, small business income, and K-1 income. It also allows you to file an extension for free by filling out Form 4868. The deluxe service option is $6.99 and offers priority support with live chat, unlimited amended returns, and audit assist. It also allows you to prepare prior-year tax returns for both state and federal filing, even though the deadline has passed.
Who is TaxAct Best For?
|Tax Software||Who Is It Best For?|
|TaxAct||Filers who want a happy medium between price, features and expert support|
|Cash App Taxes||Filers who need a few extra forms but don’t need access to a tax professional|
|H&R Block||Filers who want access to tax professionals in-person, online and via phone|
|TurboTax||Filers who want a well-known tax software and want free expert final review of their tax return|
|FreeTaxUSA||Filers who value price and a no-frills interface|
What Others are Saying
TaxAct has an A+ rating from the Better Business Bureau (BBB), the highest rating based on a scale from A+ to F. However, the company has received 176 complaints in the past three years through the BBB with 60 complaints closed in the last 12 months. It has an average rating of 1.1 out of 5 based on 39 customer reviews.
Most common complaints involved high prices and fees for e-filing and uncertainty as to the final bill until being locked in. Other users had issues with returns not being filed, incomplete returns, and errors that prevented them from completing their online tax filing.
Reviews on Trustpilot echoed more of the same complaints with errors, filing problems, and high fees. There were only seven reviews but 71 percent gave a rating of 1 out of 5.
On the other hand, the TaxAct app in the Apple Store has 5,900 ratings and reviews with an average rating of 4.4 out of 5. Users liked the easy-to-use interface that is simple to use and fast. Some users reported glitches and crashes with the mobile version.
Honest Recommendation on TaxAct
TaxAct can be a good option for those looking for a simplified tax return software that will guide them step-by-step from beginning to end. It’s best for those that have a more complicated tax situation that can’t be handled by a free option and those that may appreciate features such as the deduction maximizer and donation assistance.
If you’re planning to file the FAFSA application for college aid, TaxAct’s FAFSA integration can be a great bonus. Error alerts can be helpful to ensure you maximize your return and reduce the chance of an audit. The newly added expert help feature makes this a great option for those looking for additional guidance.
While federal filing options can be cheaper than competitors, TaxAct has higher fees for state tax filings. This makes it a better option for those who live in states that don’t require state filing such as Texas.
However, if you don’t need the additional features offered by TaxAct and don’t have a very complicated tax return, there are better options that cost less. Before spending money on TaxAct, check out alternatives such as Credit Karma Tax or FreeTaxUSA to see if they will fit your needs.
Read More: Best Free Tax Software
Scoring the Product
TaxAct offers an affordable online tax preparation and filing option with some of the features of more expensive competitors. It provides a good value for filers who need more than the free version and want access to tax preparation professionals.
TaxAct falls somewhere in the middle between no-frills free tax preparation options and premium services that offer extensive support and assistance. Step-by-step guidance, error alerts, added features and access to expert support make this a great choice for both new filers and veteran users.
Try it by visiting the official TaxAct website.