Taxes

A Review of TaxAct’s Services for This Year

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New Features in 2021

  • FAFSA Assistance: TaxAct can use your tax info to fill out the FAFSA if you need to file the form for college aid.
  • Import tax returns from other programs: You can get a head start by importing your tax return from last year, even if you used a competing service.

Getting Started

Walking Through the TaxAct Software

Entering W-2s

Tackling All the Sections

Checking Your Work

TaxAct Support/Customer Service

  • Weekdays: 8am - 8pm
  • Saturdays: 9am - 5pm
  • Sundays: 10am - 5pm

Other Benefits

Pros and Cons

  • Get help with FAFSA: If you need to file the FAFSA, TaxAct can help with that, giving it more utility than programs that focus solely on taxes.
  • Mobile friendly: Work on your taxes on the go with a powerful mobile app that integrates with the online experience.
  • Support available seven days a week: You can get help with your tax questions or software issues any day of the week during the tax season.
  • Reduce mistakes: TaxAct alerts help you avoid common mistakes and omissions, reducing your chances of an audit and saving you money.
  • Complex pricing scheme: TaxAct charges a different amount for each of its four online service levels and downloadable programs. It can be hard to know what you’ll pay for the service until you’re done preparing your taxes.
  • Free service covers the bare minimum: The free version of TaxAct is great for simple situations, but if you own a home, earn investment income, have a side gig, or even pay student loan interest, you’ll have to shell out for an upgrade.

TaxAct Alternatives

TurboTax

FreeTaxUSA

Credit Karma Tax

FAQs

Can you file an amended return with TaxAct?

Does TaxAct offer audit assistance?

How can I pay for TaxAct?

Who is it for?

Who is it for?

Summary

TaxAct has introduced a few new features in 2021, including:

Learn More: Cheapest Tax Software

If you know off the bat that you'll require a more full-featured option, you can upgrade from the start. TaxAct offers the following options for Individuals and Businesses.

We'll focus mainly on the Individual options here, but know that the other options are available. If you run a small business or non-profit with very streamlined reporting, you might consider TaxAct as an affordable way to DIY your taxes.

Once you've signed in, you can choose to import last year's tax information, which saves you some steps initially. If you have your old taxes in PDF form, you can upload them to TaxAct.

When you get started, you can choose to fill out different portions of your return at any given time. You can see the way the software will walk you through events, though, along the top option bar. You'll naturally work your way from left to right if you allow the software to steer.

Throughout the process, if you have questions, you can use the help center on the right sidebar. It’s a quick way to get basic answers to your tax questions. And, remember, all versions of TaxAct come with unlimited support this year.

One interesting new feature is the ability to bookmark questions. If you're filing your taxes and don't have the information you need for one piece, you can click a little star on that question. This will let you come back to specific questions later in the tax-filing process, without having to walk through all the previous questions first.

To make sure you won't miss anything, TaxAct first asks you some basic questions. Then, you get to this menu, which includes a variety of "Life Events" to choose from. At the beginning, the software will just ask you to choose the event that applies to you, and then answer a few basic questions about that event.

This was one section where I wasn't entirely sure, at first, which version of TaxAct would cover what. The list of covered forms covered by the free version is actually quite extensive.

When I tried to select a second event, I needed to upgrade to another edition. So, even if the forms you need to use for certain items are included in TaxAct’s list of free forms, you’re limited in how many of those forms you can access under the free version.

It's to be expected, however, that the free version will be somewhat limited. And $29.95 for the Deluxe+ option is still a good value.

When you click into each "Life Event," you'll get a series of informational pop-ups. How many you see depends on the specific event.

One good thing about these popups is that they tell you exactly which forms you'll need to put under that particular section. For instance, if you had college costs, you might use a 1098-T, 1098-E, or 1099-Q.

I’ve got to be honest, these popups got to be a little much after a while. I clicked through five or six screens on the “Life Event” for investing. For first-time tax filers, these popups could be helpful. To me, they were overkill. With the helpful popups available whenever you need them, a more succinct introduction would be more useful and streamlined.

There may be a way to turn off the additional informational screens. But if there was, I wasn't able to locate the switch.

One item of interest was the way TaxAct allows you to enter W-2 information. The first option looks similar to what I've seen with other tax filing software. It just walks you through the various sections of your W-2 so that you can fill out each section as you come to it.

If you work for certain employers, the W2 may automatically import, or at least import your employer's information. But you can also try to upload an image of your W2 to have the software automatically pull in your information.

Related: Tax Deductions for People Who Work from Home

With most tax software options, including this one, I'd recommend that less experienced tax filers walk through the steps in the order recommended by the software. It's less likely you'll miss something this way, and you might even find some deductions and credits you didn't know you could claim.

With TaxAct, you can easily save your progress and come back to it later if you need to file your taxes in a few sittings.

Resource: The Most Common Tax Deductions

If you already know which information your taxes require, you can click through various sections at your leisure. The software will still save your progress, and you can skip back and forth from one section to the next as needed.

TaxAct offers audit risk assurance, best refund guarantees, and an accuracy check. You can check for various levels of accuracy, depending on where you are in the process. Red level checks will look for major missing information that could be an IRS red flag for an audit or rejected tax forms. Green level checks might give you access to credits or deductions you didn't know you could claim.

TaxAct offers a huge knowledge base with answers to frequently asked questions. It also has e-mail and phone-based support.

Help with the TaxAct software is available by e-mail and phone, but help with tax-related issues is available only by phone. During tax season (mid-January through the deadline to file, usually April 15th), phone assistance is available:

On the filing deadline day, support is available until midnight.

During the rest of the year, phone support is only available on weekdays from 8am to 5pm. All times are in the Central time zone.

TaxAct offers a variety of additional benefits, including being mobile-friendly. TaxAct offers online chat, email support, and phone support if you get stuck at any point. And you can choose to receive your refund through direct deposit, check, or an American Express Serve Debit Account, which gives you the quickest access to your money.

TaxAct offers an accuracy guarantee. If you get an IRS penalty related to calculation errors, TaxAct will reimburse you for the penalty amount. TaxAct also offers basic audit support. It's not as robust as that offered by some more expensive software. But the audit center would get you through the basic steps of dealing with an IRS audit on your own.

Pros:

Cons:

Customer support prioritizes higher paying customers: Seven days a week customer support is nice, but the quality and speed of support are directly based on the version of the software that you use. For example, Deluxe+ customers get tax specialist phone support while Premier+ customers receive Prioritized support, including screen sharing.

Tax preparation is a popular business, so if you don’t think that TaxAct is the right service for you, there are plenty of alternatives out there.

TurboTax is one of the best-known tax preparation companies. It offers online and downloadable versions of its tax preparation software.

Like TaxAct, TurboTax charges different amounts based on your financial situation. More complex taxes require a larger payment, with the cost ranging from free for simple filings to $120 for people with self-employment income.

FreeTaxUSA is a no-frills online tax preparation and filing service. As its name implies, the service is free to use. You can prepare and file your federal taxes at no cost, though filing state taxes costs $14.99. You can also purchase Deluxe service, which gets you priority support and audit assistance for $6.99.

FreeTaxUSA can handle almost any situation, but there are a few, like foreign employment income and non-resident alien returns that it does not support.

Credit Karma Tax is a completely free tax preparation and filing service. There are no upcharges, premium features, or hidden fees. It can even handle complex situations like self-employment income, investment income, and homeownership.

These are some of the most common questions that people have about TaxAct.

Yes, it is possible to file an amended return using TaxAct. You’ll need to do this if you realize that you’ve made a mistake or omission after filing your return.

TaxAct offers a service, Protection Plus, that you can purchase as an add-on to your TaxAct service. Protection Plus offers help if the IRS or your state tax authority decides to audit your return. Protection Plus can help you deal with the IRS by speaking to the IRS on your behalf and help you come up with a comprehensive strategy for getting through your audit.

TaxAct accepts most major online payment methods. If you’re going to receive a tax refund, TaxAct also lets you pay for its service out of your refund, but charges an additional $17.99 for this service, making it a poor choice for most people.

TaxAct is designed for people who want a bit more support and functionality than a free tax preparer provides but without the full cost of competing software like TurboTax. It fills a nice middle ground, offering functionality at a reasonable price. People who want a sleek user interface and a lot of assistance might want to spring for more expensive tax preparation software. Those who want a free, no-frills experience will be better off with one of TaxAct’s fee-free competitors.

TaxAct is designed for people who want a bit more support and functionality than a free tax preparer provides but without the full cost of competing software like TurboTax. It fills a nice middle ground, offering functionality at a reasonable price. People who want a sleek user interface and a lot of assistance might want to spring for more expensive tax preparation software. Those who want a free, no-frills experience will be better off with one of TaxAct’s fee-free competitors.

TaxAct is a solid middle ground between free tax preparation software and premium software that offers extensive support and guidance with preparing your taxes. That makes it great for people who know what they’re doing but want a bit of extra help to make sure they get everything done properly.

To give it a try, visit the official TaxAct website.


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