TaxAct Review

What to know before you file

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TaxAct

 TaxAct

overall rating
4.0

Our Take

TaxAct may be an ideal fit for someone who's seeking a no-frills, budget-friendly tax filing option online, with the added convenience of a mobile app and live chat for guidance, tips, and tricks. People who want the most polished software with as many features as possible without regard to price won’t find TaxAct as the best solution.

  • Pros & Cons
  • Key Takeaways
  • Specifications
Pros & Cons
Pros
  • May be more affordable than other tax filing programs

  • Accuracy is 100% guaranteed and backed by $100,000, but only for TaxAct errors

  • Users can import PDF files of 1040, 1040A, and 1040EZ returns

  • TaxAct Xpert Help allows you to get help from a tax pro for a fee starting in mid-January 2021


    Donation Assistant to help with tax-deductible charitable contributions

Cons
  • Additional fee applies for state returns

  • State return fees are higher than competitors

  • Prices increase as tax season nears, but no full price is listed

  • Fewer bells and whistles compared to other tax filing software

Key Takeaways
  • TaxAct can assist in filing a tax return for most people’s situations.
  • TaxAct’s Xpert Help service can help you figure out tricky tax issues with the help of a tax professional for a fee.
  • The company doesn’t disclose the non-discounted price of their software, but it’s generally cheaper earlier in the tax filing season.
  • The software isn’t as polished as the major tax preparation companies’ software, but you can usually save money by choosing TaxAct.
  • Filing a state return may be more expensive with TaxAct than with its competitors.
Specifications
  • Year Founded 1998
  • Cost Free to $64.95 plus state filing fees for online products as of December 15, 2020
  • Product Options 4
  • Phone 1-319-373-3600
  • Official Website www.taxact.com

Introduction

TaxAct provides tax preparation software that's designed to fit a variety of filing needs, ranging from consumers who are looking for a way to file a simple federal return for free to self-employed business owners, freelancers, and contractors who want to maximize every deduction. There are four filing products available for consumers. Dive into our review to learn more about the company's features, pricing, support, and ease of use to help you decide if TaxAct is the right tax filing software for you.

See our other picks when it comes to the best tax software programs to use before you file.

TaxAct Pricing and Packages

TaxAct offers four online filing products for consumers. The following table highlights the major product differences, along with its pricing as of December 2020 and the add-on rate for filing state returns.

  Federal Price   State Price   Features
Free $0 $4.95 per state Supports and includes:
- W-2 and retirement income 
- Child tax, earned income, and stimulus tax credits
- Dependents
- Students
- Prior year import
- Personalized My TaxPlan
- Free account and technical support
- Unemployment income
- Deduction maximizer
Deluxe $24.95 $44.95 per state Supports and includes features on previous tier plus:
- Unemployment income
- Itemized deductions
- Adoption credits
- Child and dependent care
- Student loan and mortgage interest
- Real estate taxes
- Health Savings Accounts (HSAs)
Premier $34.95 $44.95 per state Supports and includes features on previous tier plus:
- Gains and losses on investments
- Sale of home
- Rental property, royalty, and Schedule K-1 income
- Foreign bank and financial account reporting
- Deduction maximizer
Self Employed $64.95 $44.95 per state Supports and includes features on previous tier plus:
- Freelance, business, and farm income
- Personalized business deductions
- Deduction maximizer
- Depreciation calculations
- Year-round tax planning resources

Tax software generally increases in price as the tax deadline nears. While the pricing in this article is accurate as of December 15, 2020, it may be higher when you file your return.

TaxAct also offers downloadable versions of its software for consumer tax returns. The downloadable versions are suited for households that need to file multiple returns for different taxpayers. Free filing isn't an option, but there are four downloadable programs that essentially mimic their online counterparts: 

  • Basic: $19.95
  • Deluxe: $99.95
  • Premier: $109.95
  • Self Employed: $119.95

Each includes five federal e-files. The Basic plan charges $50 per state filed, but the Deluxe, Premier, and Self Employed packages include one state return. Additional state returns are $50 each.

Consider using the downloadable software if you typically file multiple tax returns for household or family members. The cost per return could be lower depending on how many returns you file with the software.

Pricewise, TaxAct's online filing versions are easier on the wallet compared to other tax filing programs. For example, a homeowner would pay $24.95 for the Deluxe version with TaxAct while some of its competitors charge $49.99 or $60 for their same-tier product.

TaxAct Features

There are some tax programs available that come with lots of extras. For example, you might find a program that integrates with TurboTax's ItsDeductible app so you can easily add deductible expenses. There are also programs that integrate with income and expense tracking apps to make tax filing easier for freelancers and independent contractors.

TaxAct, unfortunately, doesn't come with some of the more complicated add-ons. That's good if you want a simple and easy-to-use program, but it's also a drawback because you won’t have as many sophisticated features to make your life easier. 

However, starting with the Deluxe software level, you can do things like import 1099s and W-2s, but TaxAct’s prices have increased to accommodate these extra features.

TaxAct also offers a Donation Assistant within all products that helps filers accurately claim any deductible charitable contributions.

In terms of protections, TaxAct does offer a few perks. Here's a quick look at how they compare:

TaxAct Guarantees
$100K Accuracy Guarantee/Maximum Refund Guarantee TaxAct guarantees that its software is 100% accurate so you can get your maximum refund. If it ends up not being accurate, TaxAct will refund your software costs and pay any difference in your lower refund or higher tax liability, plus cover any legal or audit costs up to $100,000.
Satisfaction Guarantee If you're not 100% satisfied with any TaxAct product, you can discontinue using it before printing or e-filing your return.
Money-Back Guarantee TaxAct download users can get a full refund of any product they're not completely satisfied with within 30 days of receipt by mailing a letter to TaxAct. This guarantee doesn't apply after you use the downloadable software to print or e-file a return that's accepted by the IRS or a state tax agency.

TaxAct Ease of Use/Design

The TaxAct website gets high marks for being simple to use. To get started with TaxAct, you first choose which online product you want to use, then create an account.

TaxAct Create Account
TaxAct Create Account

You'll need to enter your email address and verify your account using a code TaxAct provides. From there, you choose a username and password and select three security questions you want to answer. The final step is agreeing to TaxAct's terms and conditions.

TaxAct Security Questions
TaxAct Security Questions

When you get into your online account, you're automatically taken to the My Taxes screen, where you can add a new federal tax return. If you're ready to prepare your return, there are five tabs to complete:

Basic: On this tab, you'll enter your:

  • Name
  • Social Security number
  • Date of birth
  • Occupation 
  • Dependent information
  • Filing status
  • Life events (such as getting married or having a baby) that could affect your filing

Federal: This is where you'll enter information for your federal tax return, including:

  • Income
  • Deductions
  • Credits
  • Additional taxes owed
  • Miscellaneous tax items such as estimated taxes paid

The Federal tab concludes with a federal tax summary and an estimate of your federal refund or taxes owed. 

State: TaxAct automatically transfers information from your federal return over to your state return. On this tab, you just have to choose the state you want to file and answer the Q&A. 

You'll need to tell TaxAct:

  • Which county you live in
  • Your residency and veteran status
  • Additions to federal income or deductions
  • Credits and nonresident tax payments you'd like to enter
  • Any other state-specific information requested

Similar to the Federal tab, the State tab concludes with a summary of your state filing, including your refund or taxes owed.

Review: The Review tab allows you to review your federal and state returns for three different types of issues:

  • Red alerts: Incomplete or inconsistent information
  • Yellow alerts: Potential inaccuracies
  • Green alerts: Potential tax savings

You'll sign and date your return here. Once you've done that, you can view a personalized financial savings report showing future tax savings opportunities. You can also compare your federal returns year over year here and see how your tax filing compares to the national average.

Filing: This is where you'll file your return. If you choose to e-file, you'll need to enter your payment information. If you'd rather file a paper return, you can print your tax forms from this screen.

Next Year: This tab walks you through different things you can do to get prepared for next year's tax filing, such as determining your W-4 withholding allowances and estimating your tax liability in different scenarios.

Overall, the online site is very easy to navigate, as there aren't a ton of menu options to choose from. Even if you're new to filing your taxes, TaxAct's online software doesn't overwhelm.

TaxAct Support

TaxAct is happy to offer customer support by email or phone to answer questions or guide you through issues. Here's how you can get in touch with a TaxAct service rep:

TaxAct Support Contact Information
Type of Support    By Email   By Phone   Phone Support Availability
Tax Help taxquestion@taxact.com (319) 373-3600 Mid-April to Mid-January: M–F 8 a.m. to 5 p.m. CST; Mid-January to April filing deadline: M–F 8 a.m. to 8 p.m. CST, Saturday 9 a.m. to 5 p.m. CST, Sunday 10 a.m. to 5 p.m. CST, with exceptions
Customer Support assistance@taxact.com (319) 373-3600 Mid-April to Mid-January: M–F 8 a.m. to 5 p.m. CST; Mid-January to April filing deadline: M–F 8 a.m. to 8 p.m. CST, Saturday 9 a.m. to 5 p.m. CST, Sunday 10 a.m. to 5 p.m. CST, with exceptions

TaxAct seems to sporadically offer live chat support for the online version. Sometimes, a live chat bubble pops up on the screen. When we filled out the information to request a live chat, they said that representatives were no longer available. Later, it appeared again and the software displayed there was a 10-minute wait.

As of December 2020, TaxAct was promoting a new feature to be launched in mid-January 2021. TaxAct Xpert Help provides unlimited help from tax experts during business hours for both federal and state tax return questions. The tax experts may be CPAs or EAs, but it’s possible they won’t be credentialed at all. Hours for this service are CST-based and are Monday through Friday from 8 a.m. to 8 p.m., Saturday 9 a.m. to 5 p.m., and Sunday 10 a.m. to 5 p.m. 

Special extended hours start on April 10 through the April 15 filing deadline. The service will be fee-based, but as of December 2020, TaxAct has not disclosed pricing.

TaxAct also offers a paid audit protection product called Protection Plus Audit Defense. The service helps if you receive an audit notice or inquiry from the IRS or your state. If you need help during an audit, Protection Plus Audit Defense will communicate with the IRS or your state tax filing agency on your behalf, assist with denied credits and tax debt relief, and assist with tax fraud. 

Assistance is available for federal and state audits and covers your return for three years after you enroll and file. It only covers the tax return you purchase it for, though, not all tax situations.

TaxAct Mobile App

TaxAct Express is TaxAct's mobile app. The app is free for iPhone and Android users. Some of the best features of the app include:

  • W-2 capture
  • Touch ID/face ID support for a secure log-in
  • IRS refund tracking
  • Free federal extension filing
  • Enhanced support with live chat

The app supports all of TaxAct's online products, and you can seamlessly switch from the app to desktop without losing any of your progress when preparing your return. Returns prepared and filed through the app come with the $100K Accuracy Guarantee. You can get personalized product recommendations and notifications when the IRS and state have processed your returns.

TaxAct Guarantee
TaxAct Guarantee

TaxAct updated its app to cover a wider range of tax situations, such as dependent credits, education credits and deductions, interest and dividend income, and the Earned Income Credit. If you want to combine convenience with live chat help, the app delivers both.

TaxAct vs. The Competition

This review has already touched on some of the differences in pricing and features between TaxAct and competing tax software. To recap, here's a look at how TaxAct stacks up against two other well-known online tax filing programs:

Competitive Analysis
Considerations TaxAct TurboTax H&R Block
Cost Range $0 to $64.95 for federal returns; $4.95 to $44.95 for state returns $0 to $200 for federal returns; $0 to $55 for state returns $0 to $195 for federal returns; $0 to $36.99 for state returns
Best Features Clean, easy-to-navigate design; mobile app W-2 capture; import federal tax returns filed with other tax software in PDF form; Accuracy Guarantee; Protection Plus audit assistance Integrates with ItsDeductible; import tax returns filed with other software in PDF form; professional tax prep assistance with TurboTax Live Mobile app W-2 capture; import tax returns filed with other software in PDF form; 3.5% refund bonus when you load some or all of your refund to an Amazon gift card
Download/Mobile App Available? Yes Yes Yes
Customer Support Phone and email for online and download users; live chat help available with the TaxAct Express mobile app and online versions Chat, phone, screenshare, and through the online TurboTax community; fees may apply to speak to a live CPA, EA, or other tax expert Phone, chat, Twitter, and in-person at more than 10,000 H&R Block locations

Who TaxAct Is Good For

TaxAct could be the ideal solution for someone looking for a straightforward tax preparation software that doesn’t break the bank. It doesn’t offer the same number of features as the leading tax preparation software companies, but it still provides everything you need to accurately file your tax return.

Who TaxAct Isn’t Good For

TaxAct isn’t the best fit for people looking for the most intuitive and easiest-to-use tax software with the most features. Both TurboTax and H&R Block have invested time and money into building an easy-to-use product, but they charge more for those products.

Verdict

TaxAct's online tax filing software is best for both first-time and experienced tax filers who want a simple, cost-efficient way to prepare their taxes. It's also a solid choice for mobile users who want the added touch of live chat support on the go.