Tax software programs have become a common way to file income taxes, as these programs streamline a complicated process. There are many different software providers offering web and mobile apps that help you complete a 1040 and other tax forms, as well as pay your taxes.
TaxAct is one of those programs. Although it's not as well-known as bigger competitors such as TurboTax and H&R Block, this tax preparation software has a lot to offer, including affordable prices and strong product guarantees.
Not sure if you want to try TaxAct software this tax season? This TaxAct review can help you make your choice.
TaxAct has been helping people affordably file taxes for decades.
- Over 65 million federal returns filed since 2000
- Guaranteed to be 100% accurate
- Scans a database of over 350 credits and deductions
TaxAct has been helping people with tax preparation and filing since 1998 and has filed more than 65 million returns. It provides some of the best tax software solutions for all different kinds of taxpayers, including people with simple returns looking to file for free, as well as small business owners who have complicated tax situations and need a professional product.
TaxAct distinguishes itself from competitors because many of its paid filing programs come at a lower cost. However, TaxAct’s free version doesn't allow you to use all the forms that H&R Block's free file provides.
TaxAct's Maximum Refund Guarantee also beats out most competitors. Although H&R Block and TurboTax both offer guarantees, they simply refund your money if another tax prep software program nets you a larger refund. TaxAct provides you with a refund on software fees and pays the difference in refunds and credits, up to $100,000.
How much does TaxAct cost: Products and prices
TaxAct offers free filing for both state and federal returns, as most tax software programs do. But you can file for free only if you have a simple return and aren't itemizing deductions.
You can claim a few credits, such as the Earned Income Tax Credit and Child Tax Credit, with the free version. But, unlike with H&R Block, you can't claim a deduction for student loan interest without using a paid version of the software.
TaxAct's Deluxe+ and Premier+ programs are more affordable than competitors such as TurboTax, which charges $40 for its Deluxe program for those who want to itemize, or $70 for taxpayers with investment or rental property income. But, as with most tax prep software, state tax returns come at an additional cost with TaxAct. It's $39.95 per state filing with all but the free and self-employed options.
The good news is, those who pay a premium for upgraded TaxAct software get access to more assistance, including specialist phone support with the Deluxe+ version and screen-sharing with Premier+.
|Free||$0 for federal and state||Taxpayers with W2 income and few deductions or credits|
|Deluxe+||$35 for federal
$39.95 per state
|Taxpayers who want to itemize deductions or deduct student loan interest|
|Premier+||$50 for federal
$39.95 per state
|Taxpayers with rental or investment income|
|Self Employed+||$80 for federal
$49.95 per state
|Freelancers or small business owners|
How does TaxAct work?
TaxAct works in a step-by-step fashion that is similar to other tax filing programs, though its user interface has fewer frills. You'll be asked about your life and financial transactions to assist in completing tax forms and determining what deductions and credits you can claim — or if you should claim the standard deduction instead.
You can also import tax forms from prior years in the form of PDFs and can submit photos of your W-2 so your information can be auto-filled on your return. Unfortunately, if you filed a past year's return with competitors, importing will only be available to you if you have a PDF copy. This can make switching to TaxAct cumbersome if you used different software last year.
As you input information, Real-Time Refund Status enables you to see how the data you enter affects either your refund or owed amount. TaxAct also scans its database of more than 350 credits and deductions to identify as many possible opportunities to save as possible. This is a major benefit because, no matter your tax bracket, you don't want to end up overpaying the IRS.
TaxAct even helps you to avoid tax mistakes by reviewing your return and providing TaxAct Alerts that identify whether your audit risk is increasing or if you're missing an opportunity to save. Filers using the paid program get free tax and technical support if they need help during the filing process.
TaxAct pros and cons
You'll want to consider the advantages and disadvantages of using TaxAct before you file your tax returns. Some of the pros include the following:
- TaxAct is affordable. You can file state and federal tax returns for free if you have a simple return, and paid filing products cost less than some competitors.
- Accuracy is guaranteed. TaxAct offers an accuracy guarantee and will pay up to $100,000 if you owe penalties or interest due to a calculation error. If you don't get the maximum refund, you'll also be refunded the cost of the software and up to $100,000 in extra taxes paid.
- TaxAct provides free tax support for users who pay to file, including customer support via screen sharing with the Premier+ program.
There are some disadvantages as well, including:
- The free file version does not include as many forms as some competitors. You cannot claim the student loan interest deduction if you use TaxAct's free version; H&R Block's free file program enables you to claim this deduction.
- The user interface isn't as intuitive or easy to use as TurboTax or H&R Block, and the program has fewer bells and whistles. A side-by-side comparison of TaxAct vs. TurboTax vs. H&R Block can help you determine which best fits your filing needs.
How to contact TaxAct
TaxAct enables you to receive technical and tax support via chat or phone after you've signed into your account. Tax support is free for paid versions of the filing software and Premier+ users can share their screens to get help in real time.
If you need to speak with customer service or get tax help, call the phone number: 319-373-3600. From January through April during tax filing season, support hours are 8 a.m. to 8 p.m. Monday through Friday; 9 a.m. to 5 p.m. on Saturday; and 10 a.m. to 5 p.m. on Sunday.
There's also a searchable database of tax topics you can use to find out information on everything from how to file an extension on your taxes to specific tax forms you may encounter.
Is TaxAct really free?
TaxAct offers a free version of its program, but only taxpayers with simple returns can use it. If you need to claim a deduction for student loan interest, itemize your deductions, have income other than W-2 income, or otherwise have a more complicated tax situation, you will need to use one of TaxAct's paid options.
Does TaxAct charge to e-file?
You can file federal and state returns at no cost if you have a simple tax situation. Otherwise, you will need to pay to use the software and file your returns. Although federal e-filing is included in the price of the software, you will be charged an additional $39.95 or more for each state return you need to file.
Does TaxAct charge for state returns?
Unless you are using the free version, you will be charged $39.95 or more to file a state return using TaxAct.
Is TaxAct secure?
TaxAct works to ensure the security of client information. It requires complex passwords and two-factor authentication, which means you’ll receive a code in your email or mobile device when you sign in. You can also view a list of all past sign-ins on different devices so you can spot unauthorized account access.
Does TaxAct charge for direct deposit?
TaxAct does not charge any fees if you’d like your tax refund delivered via direct deposit. However, if you want your TaxAct filing fees to be deducted from your directly deposited refund, you will be charged a fee of $17.99.
Bottom line: Is TaxAct right for you?
Very few of us feels like tax experts, so if you're looking for an affordable tax filing program with a strong guarantee that helps you understand how to manage your money, TaxAct is a great choice.
Although the program isn't quite as easy to use as competitive offerings, if you sign up for TaxAct, you'll get a no-frills, user-friendly approach that may be appreciated by some filers who have less complicated personal finances. If you want to file for free and claim the student loan interest deduction, though, then H&R Block may be a better choice.
If you have extensive tax questions or a more complicated financial situation, then you may want to speak with a tax professional or CPA to get your questions answered.