Founded in 1988, TaxAct’s goal is to provide quality tax preparation products at affordable prices. Based in Cedar Rapids, Iowa with a team of over 120 employees, it helps its customers navigate through tax season without a large financial burden. Over 45 million federal tax returns have been filed with TaxAct, by consumers, business owners and tax professionals alike.
TaxAct offers multiple online do-it-yourself tax filing options. These options make it easier and more convenient to file. Plus, with step-by-step guidance, online tools and a maximum refund guarantee, you learn more about the filing process while getting the most out of tax season. All options also come with unlimited phone support, giving you help with specific tax issues as they come up.
TaxAct’s Filing Options
TaxAct offers a range of filing options, all at affordable prices. There are five online plans: Free, Basic+, Deluxe+, Premier+ and Self Employed+. These options each support different tax forms and so your tax situation (and thus, which forms you need to file) will determine which option you need to use.
Overall, TaxAct looks at more than 300 tax deductions and credits to help you maximize your tax return. All plans also come with a price lock guarantee – you pay the price listed at the time you create your return, regardless of when you actually file.
It’s also dedicated to making the filing process faster, easier and more convenient. Since TaxAct is an online process, it’s compatible on multiple devices. If you have a simple tax situation, you can even file through a mobile app called TaxAct Express. TaxAct also makes it easy to import your W-2 and last year’s returns. After you file, you also have access to personalized financial reports like HealthWatch and TaxWatch, which give you tips to maximize tax and healthcare savings.
TaxAct also has a 100% accuracy guarantee, which ensures that the calculations on your return are correct. If there’s a mistake on TaxAct’s end, they’ll pay the resulting penalty and interest fees. Each plan comes with a maximum refund guarantee. And if you ever need extra help or assistance, there’s unlimited phone support. With a commitment to providing a great user experience, TaxAct is dedicated to giving you an efficient and rewarding experience.
Unlike some other tax planning services, TaxAct’s Free option is completely free. Some other services only offer federal filing for free – with TaxAct, there’s no fee for filing state returns, either. It’s free to prepare, print and e-file. Since you can only file your 1040 with this option, it’s targeted at those with simple tax returns. That probably includes you if you have a W-2 and no dependents.
The filing process with TaxAct just requires you to answer simple questions about your finances. As you file, you get step-by-step guidance with tax tips and strategies, so you understand the process completely. There’s also a complete tax glossary to help you understand terms. And with real-time refund status, you’re able to see how different factors impact your final refund.
With TaxAct it’s also easy to import and store your tax returns. You have unlimited access to your returns up to seven years after filing, so you can refer back to them as you file in the next year. You can also import data from returns prepared with TurboTax or H&R Block. For $15, you can transfer data directly from a previous TaxAct return. These features give you access to the prior year’s comparison report, which compares the returns from this year and last year to check if there are any discrepancies. If there are any errors, you get free amended returns at no cost.
After you file, TaxAct will provide a complimentary BluPrint financial report. The BluPrint report shares financial planning and tax saving opportunities that may fit your financial situation.
The Basic+ option is quite similar to the Free filing options, but covers a few more filers. According to TaxAct, the Basic+ option works well for “filers with dependents, college expenses and more.” This plan, since it’s still basic, costs just $9.95 for a federal filing and $19.95 per state form.
This is TaxAct’s most popular plan because it covers the forms, deductions and credits that the average American will need. That includes forms for homeowners and those who itemize deductions. It costs $29.95 for federal filing and $39.95 per state return.
TaxAct Deluxe+ also helps maximize deductions through additional tools. For example, you can import data about charitable donations and investment income, which are possible areas for deductions.
At $34.95 for a federal return and $39.95 per state return, this option is designed for people with significant investments or a rental property. Filers who need to report capital gains may also like the Premier+ option as it makes it easy to import stock data and to record your capital gains.
If you use this option, you will also get prioritized tax support. That means a dedicated phone line, screen share capabilities and some (limited) in-app chat support.
The most expensive and advanced option is TaxAct Self Employed+. It costs $49.95 for a federal filing and $39.95 per state. This option includes the features of the four previous options, plus some forms just for self-employed filers and small business owners. Notably, this option includes Schedule C and Schedule C-EZ. If you didn’t get a W-2 or if you just have any income reported on a 1099-MISC, this option is for you.
Refund and Payment Options
You can pay for TaxAct services with a credit or debit card. You can also deduct the cost directly from your tax refund if you opt to receive your refund via direct deposit, and if your expected refund is at least $100.
The fastest way to receive your tax refund is to directly deposit the money into your bank account. The refund can be deposited into up to three different accounts. You can automatically split the money between both a savings and checking account. You can also use it to purchase U.S. Savings Bonds in $50 increments or deposit it into an American Express Serve Prepaid Debit Account. If you choose the prepaid debit account, TaxAct will automatically get $20 added to your account. You can also get the refund as a paper check.
TaxAct also allows you to track your e-file status of your federal and state returns. This gives you an estimate of when you’ll receive your refund.
Tax Audit Services
TaxAct reduces your audit risk with TaxAct Alerts, which searches your returns for potential errors that can increase the risk of an audit. In the event that you are audited, TaxAct partners with Protection Plus to offer full audit assistance.
You can enroll in Protection Plus when you file your return. Protection Plus covers your return for three years and guides you through the audit process. It handles all IRS correspondence and you also get assistance with tax debt and tax fraud incidents. This protection doesn’t come automatically with any TaxAct plan. You will have to pay an additional cost of $44.95.
Online Tax Tools
TaxAct offers a variety of tools on its website to help with the filing process. You have access to a tax calendar to keep track of important dates and a tax planning checklist to ensure you have all the information you need. There are also tools available, like a tax bracket calculator, loan calculator or healthcare tax credit calculator. TaxAct also lists recent tax law changes that will affect the tax season.
|TaxAct Free||Federal: $0 State: $0||Best for simple tax returns using Form 1040 and claiming standard deduction; Comes with completely free filing of federal and state returns, plus unlimited phone support|
|TaxAct Basic+||Federal: $9.95 State: $19.95||Best for simple tax returns with dependents or college expenses; Comes with all Free features, plus access to more forms and schedules|
|TaxAct Deluxe+||Federal: $34.95 State: $39.95||Best for filers with investments or rental property; Comes with all Deluxe+ features plus forms related to investing and prioritized support|
|TaxAct Premier+||Federal: $51 State: $37||Best for all filers who want complete peace of mind; Comes with all Freelancer features, plus audit protection|
|TaxAct Self Employed+||Federal: $49.95 State: $39.95||Best for self-employed filers and small business owners; Comes with all Premier+ features, plus Schedule C, C-EZ and support for 1099-MISC|
Compared to other tax planning services, TaxAct’s prices are more affordable and the options don’t have a large price difference between them. For the most part, the different options have similar features. Unlike its competitors, TaxAct does not offer a large increase in features as plans get more expensive. The only big differences between options are the forms and schedules available – the more expensive the plan, the more complex your financial needs.
Who TaxAct Is For
If you’re looking for an affordable tax planning service, TaxAct is a good option. TaxAct offers a variety of plans, each targeted at slightly different financial situations. Whether you’re a student or a business owner, you’re able to get the maximum refunds available at an affordable cost. There are also tools that guide you through the process and unlimited phone support.
TaxAct is a particularly good fit for those who have simple returns and don’t need many extra features. It’s known as a no-nonsense tax service – it isn’t the fanciest one out there, but it gets the job done. The interface is clean and straightforward.
If you have more complicated returns, TaxAct is still a good option if you feel comfortable with doing a little background research and with taking a more do-it-yourself approach.
What’s the Catch?
TaxAct’s affordable prices mean it doesn’t offer as many features as some of its competitors. It has enough guidance, tips and tools to help you navigate through tax season, but the filing process may still be confusing if you’re a first-time filer. Those looking for premium educational content will prefer another service. TaxAct also doesn’t have a built-in service for audit support. It partners with another company to offer audit assistance, but at an extra cost of almost $50. If you want the peace of mind that comes with audit assistance, you’re going to pay the same or more than what you would pay with a service like H&R Block or TurboTax (both of which offer more features and educational content).
In addition, TaxAct isn’t the fanciest service out there. Its interface is user-friendly enough that it’s easy to input information, but it can appear a bit plain. It uses an interview approach, like other filing services, but is not as interactive as some other services.
How TaxAct Stacks Up
|Tax Planner||Plans Offered||Costs (Federal)||Costs (State)|
|TaxAct||Free, Plus, Freelancer, Premium||Free: $0 Plus: $25 Freelancer: $39 Premium: $51||Free: $0 Basic+: $19.95 Deluxe+: $39.95 Premier+: $39.95 Self Employed+: $39.95|
|TurboTax||Free, Deluxe, Premier, Self-Employed||Free: $0 Deluxe: $39.99 Premier: $59.99 Self-Employed: $89.99||Free: $0 Deluxe: $39.99 Premier: $39.99 Self-Employed: $39.99|
|H&R Block||Free, Deluxe Premium, Self-Employed||Free: $0 Deluxe: $29.9934.99 Premium: $5449.99 Self-Employed: $794.99||Free: $0 Deluxe: $36.99 Premium: $36.99 Self-Employed: $36.99|
TaxAct may not have as many features as its competitors, but it gets the job done at an affordable price. TurboTax and H&R Block are two of the most well-established tax planning services, but their prices range on the higher end. For those higher prices, they both offer some useful features that TaxAct doesn’t.
TurboTax has similar basic features, like easy import and refund explanations. But TurboTax has a more user-friendly and interactive interview approach to filing. For the most part, it asks simple questions and you answer them. With your answers, it does most of the calculations and filling out for you.
In particular, TurboTax offers good features for filers who have a more complex tax situation. So if you are self-employed, own a small business or have complex investments, you may want to consider TurboTax. It also provides access to tax experts. This costs extra but could be exactly what you need to help you get through a confusing tax return.
H&R Block is another tax planning service that not only offers online filing options, but an in-person option, as well. You’re able to file at one of its 12,000 physical locations worldwide. This is particularly useful for filers with complex returns. TaxAct only offers digital products with limited technical and expert support.
Bottom Line: Should You Use TaxAct?
TaxAct is an affordable tax planning service that gets the job done. It offers a variety of filing options, fit for users of different tax needs. Whether you’re self-employed or an investor, TaxAct can help you navigate through tax season. You get the guidance you need, along with unlimited phone support.
But TaxAct’s affordability means that it has fewer features than its competitors. This isn’t necessarily a bad thing but could leave you confused if you’re a first-time filer or if your tax situation is markedly different from previous years. If that describes you, you may need to do a little online reading or other background research to make sure you understand how certain deductions work and whether or not you qualify. Explanations on TaxAct aren’t as extensive as some other services and are easier to understand if you’ve filed before or just know a bit about taxes.
Tips for Getting Through Tax Season
- Filing taxes can get confusing if you have a complicated tax situation. If you’re unsure how to file your taxes, talk with a financial advisor who specializes in taxes. An advisor will help you navigate the intricacies of the tax code and maximize your refund. This could include minimizing taxes on investments or just planning your expenses throughout the year so that you make things easier for you come April.
- Most states have their own income tax. That means you’ll need to file another return after you’ve finished your federal return. Because state and local governments have their own systems for handling tax returns, processing varies by state. Make sure you know how to check your state tax refund status.
- It’s nice to get a big refund check during tax season, but you may want to make some changes if you find yourself relying on a tax refund to make ends meet. Look at your tax withholding on your W-4 to see if you should claim more or fewer allowances. By claiming more allowances on your W-4, you decrease how much your employer removes (withholds) from your paychecks. That means more take home pay and perhaps less reliance on your refund.