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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 which is unusual for free plans, however it does come with assistance from a tax expert if you need it. If you’ve used other tax filing software, you will find that the data entry process is similar for TaxAct.
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.
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:
$0 for federal and $39.95 for each state return
The free version of TaxAct is for simple tax returns only, note that state returns are not free. Perfect if you only have W-2 income, unemployment income, or retirement income. It covers the standard deduction as well as child tax credits and earned income credits.
TaxAct’s free version is different from its competitors in that, while it does cost $39.95 per state, it also includes free unlimited access to a tax professional. This means if you have questions about your taxes you can get help from a live person. Typically, free plans only offer tech support.
This version is good for those that only have W-2 income and want to take the standard deduction.
$24.95 for federal and $44.95 for each state return
The deluxe option includes everything in the free version and adds itemized deductions, child and dependent care expenses, mortgage and student loan interest, real estate taxes and health savings account (HSA) deductions.
This version is good for those who want to itemize their deductions.
$34.95 for federal and $44.95 for each state return
Premier includes everything in the deluxe options plus investments, sale of home, rental property income, and income reported on a 1099-k. You can also report foreign bank and financial accounts.
This version is good for those who have sold investments or have rental property income.
$64.95 for federal and $44.95 for each state return
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.
This plan is good for those who have a business.
All four plans include XpertAssist which gives you unlimited access to a tax professional. They can answer any questions you have regarding your taxes. They can also do a quick review of your taxes before you file.
The way it works is that you email your question to TaxAct and then a tax expert will call you back. This avoids having to remain on hold but it also means the help is not instant. However, TaxAct has a feature where you can bookmark where you have questions. That way you can continue preparing your return and save up all your questions for the end and get them all answered on one call.
Several features make TaxAct a good option for filing your taxes:
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.
How TaxAct Works
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’s 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 $100k 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 – All TaxAct plans offer access to tax experts for free the XpertAssist. This gives you the option to get live, unlimited on-screen help from a tax expert.
XpertAssist gives you real-time, one-on-one tax support from a CPA or other tax experts to help you navigate your individual tax situation. Email your question and you will receive a call back from a tax professional.
Customer Service representatives can be reached by email or phone:
- Email: [email protected]
- Phone: (319) 373–3600
TaxAct offers two levels of audit support. A free version and a paid version.
For free, you can get details on what to expect from their website but they don’t offer any live help, not even Q and A assistance which is offered at several of their competitors.
For a fee, TaxAct has partnered with Protection Plus to offer users the option to buy audit defense. 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.
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.
Here’s our full Cash App Taxes review.
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.
Check out our full H&R Block review.
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.
Check out our full TurboTax review.
Free version is for simple tax returns only. Not all taxpayers qualify.
FreeTaxUSA is a no-frills online tax preparation software approved by the IRS. Federal returns are free, while state returns cost $14.99 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 $7.99 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.
Check out our full FreeTaxUSA review.
Read more: What Is The Cheapest Tax Software?
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.