TaxAct Review 2023 | Free & Low Cost Tax Prep
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TaxAct is one of the more popular tax filing programs on the market. With a competitive price point and a variety of features, it can provide the help and support you need — without the full cost of an accountant.
However, before you start using TaxAct, let’s take a look at what it offers and what you need to know.
Cost – 9
Customer Service – 8.5
Ease of Use – 8
Tools & Resources – 7
Previous Year Importing – 10
Mobile App Usability – 9
What Is TaxAct?
TaxAct has been positioning itself as an affordable alternative to other tax preparation software since 1998. As a result, TaxAct the software interface is lean and uncluttered, making it easy to use and visually appealing.
While TaxAct is often seen as the “discount” option when compared to other tax prep software, the reality is that it offers more than you might expect. It’s worth taking a look to compare TaxAct with other tax prep options before making a decision.
Who Is TaxAct Good For?
For the most part, TaxAct is for those who want a good value in tax prep software. It’s designed to require a little less hand-holding than other products, so it’s ideal for someone who is reasonably confident about preparing their taxes but wants a little guidance.
For simple tax returns only
|Small Business Features|
|Audit Assistance Included|
|Accuracy Guarantee||Up to $100,000|
|Filing Support||Live Chat and Phone: M-F 8AM-5PM Central Time. Extended hours including weekends from Jan. – April. Email.|
TaxAct Plans and Pricing
TaxAct offers file on your own and file with Xpert Assist options, the latter of which comes with unlimited one-on-one advice from tax experts, certified public accountants, and enrolled agents with years of tax preparation experience. With all products, TaxAct offers account and technical support over chat or phone, as well as an answer center for all your FAQs.
There are four different online plans with TaxAct, all of which include free Xpert Assist. These plans are Free, Deluxe, Premier, and Self-Employed. Let’s break down the costs and capabilities of each plan.
- Federal return: $0
- State return: $39.95
If your tax situation is very simple, this free TaxAct service could be a good fit.
The free plan can handle simple returns for people with W-2, unemployment, or retirement income and those who qualify for a Child Tax Credit, Earned Income Credit, or Stimulus Credit. You can quickly and easily import your W-2, unemployment, and stimulus income to get started. You can’t itemize any deductions with this product, and you’re limited as to available forms and schedules.
- Federal return: $24.95
- State return: $44.95
Now we’re starting to get into slightly more complicated territory. With the Deluxe version of TaxAct tax prep software, you can access everything in the Free version as well as file a Schedule A and Schedules 1-6. This plan allows you to itemize deductions and take credits and deductions for adoption, child care, student loan and mortgage interest, and more.
- Federal return: $34.95
- State return: $44.95
This plan is specifically for investors. It allows you to report earnings from rental properties, home sales, and royalties as well as 1099-K income and money in foreign accounts. You’ll have the ability to file Schedules D and E, which you don’t get with the next plan down.
For many people who aren’t self-employed, the Premier online plan can be a good choice. It offers access to many of the most common forms and schedules not included with Deluxe.
- Federal return: $64.95
- State return: $44.95
This plan for self-employed filers is the only online plan with TaxAct that allows for personalized business deductions and freelance, business, and nonemployee (1099-NEC) income. It also includes support for calculating depreciation.
With this tax package, you get most of what you need as long as you’re a sole proprietorship, S-Corp, or LLC. You can use the Deduction Maximizer to make sure you’re claiming all your business expenses, and you’ll get help with your Schedules C and F. On top of that, you can even get a financial assessment and year-round tax planning help.
If you’d rather download tax software and file for yourself rather than pay for an online service, your options with TaxAct are Basic, Deluxe, Premier, and Self-Employed.
- Federal return: $44.95
- State return: $60
The Basic software download is for simple filers. It includes up to five federal e-files free and costs an additional $60 for every state return you need to file.
- Federal return: $139.95
- State return: $60
The Deluxe software download includes five federal e-files and one state return. After that, each state return will cost you $60. This software is meant for filers who want to claim unemployment income and/or deductions for children and homeownership.
- Federal return: $149.95
- State return: $60
The Premier download from TaxAct is for complex returns. It lets you report investment earnings – including rental property income – and global income. This download includes up to five federal e-files and one state return. If you need to file more state returns, you’ll pay $60 each.
- Federal return: $159.95
- State return: $60
For complex returns by filers who work for themselves, the Self-Employed software download is the right choice. This option lets you file 1099-NEC forms, 1099-MISC forms, and Schedule C and F forms (for business and farming profits/losses, respectively). The Self-Employed download includes five federal e-files and one state return and costs $60 for extra state returns.
Other Products From TaxAct
TaxAct also offers other products for people who don’t fit into any of the categories we’ve talked about.
There are business tax filing forms, including help filing for a C-Corp and filing as a nonprofit. There’s also enterprise software designed for tax professionals to use when preparing client tax returns (called TaxAct Professional) and an online plan and downloadable software for preparing Estates and Trusts returns.
How To Choose a Product
There are several different features and products offered by TaxAct. As with many other tax preparation software programs, you should purchase a product tier based on the needs you have and the complexity of your tax situation.
However, all products come with the following features:
- Free tech support to troubleshoot issues
- Access to your tax return for seven years
- Maximum refund guarantee
- Accuracy guarantee
- Tax document import
- Tax prep tips and tools
- Return status
When deciding how to file with TaxAct, consider your income reporting needs and the deductions and credits you plan to take. This will point you in the right direction for which product tier you might need. If you’re not sure which deductions and credits you qualify for, check out this guide to offsetting your tax bill.
Then, determine whether you’d rather file directly through an online platform (online service) or install the software you need to complete your return (download). This is a matter of preference. Some people find filing online to be more efficient and convenient, but you may prefer the security of installing software and updating your returns locally.
TaxAct also has a $100,000 accuracy guarantee and a deduction tool to help you maximize your tax deductions.
As with other tax preparation software, TaxAct allows you to choose from different ways to receive your refund. Some of your options include:
- Direct deposit
- Paper check
- Applying to next year’s taxes
- Buying U.S. savings bonds
- American Express prepaid debit card
How to Sign Up
To get started with TaxAct, you need to choose your product, and then you’ll be asked to create an account. Provide your email, and TaxAct will send you a code you can use to create your account. You go to create a password, give your phone number, and set up security questions. It’s a process that’s a little more involved than just getting started, as you do with many other tax products.
However, you can start your return without entering payment information. It’s easy to import your previous year’s 1040 and review the information. Once you’ve done that, you can start digging into this year’s situation.
You can easily import your tax information from previous years with TaxAct. You’ll have to provide your bank information if you want to have your tax refund directly deposited into your account, which is the fastest way to get your money. You can also sign into your account from a mobile device and continue working on your tax return from a different place.
TaxAct’s mobile app, TaxAct Express, is sleek and easy to use. You can use your phone to capture important documents, and you can switch between mobile and desktop versions. It also has Touch ID and Face ID support.
However, there are some features that TaxAct Express doesn’t have. For example, you can’t manage some of the forms and schedules that come with more advanced situations, so you might need to switch to the desktop to complete your taxes, even if you start them with the mobile app.
TaxAct has a searchable knowledge base, and all filers can get help with email, chat, or phone. Customers who choose products with Xpert Help have the option to share their computer screen.
Understand that you won’t get tax advice from representatives on the phone. They have prepared taxes before, and it’s a plus that they are all dedicated to tax preparation, but they can mostly just help you navigate the app.
TaxAct Pros and Cons
- Free online plan. TaxAct free costs nothing to use for federal returns and works for most simple situations.
- Easy to use. Uncomplicated online platform that guides you to find tax advantages you might qualify for.
- Low prices. Compared to other platforms, TaxAct’s prices for filing federal returns are competitive for both online plans and software downloads.
- Xpert Assist. Currently free with all online plans, Xpert Assist includes unlimited guidance and support from tax experts.
- No audit defense. TaxAct only provides basic audit assistance including clarification of IRS forms, not defense and advising.
- No email support. You cannot get in touch with TaxAct tech or tax support via email, only phone or chat.
- Expensive state returns. State returns cost extra with every plan and are not cheap.