//TaxAct Review: Is This No-Frills Tax Software Right for You?

TaxAct Review: Is This No-Frills Tax Software Right for You?

A wise man once said, “Change is the only constant,” but he clearly forgot about filing taxes.

Paying your taxes is an annual chore that can cause the sanest of individuals to rip out their hair and scream obscenities at W-2 forms while foaming at the mouth. Luckily, tax professionals — and now tax preparation software — can make the process somewhat more manageable.

TaxAct is a popular option for filing your taxes without an actual accountant. Its biggest competitors include H&R Block and TurboTax. In this review, we’ll look at what TaxAct offers and see how it stacks up against its competitors.

TaxAct: What’s New for 2019?

If you’ve used TaxAct in the past, you will notice some updates when you file your 2018 taxes. The biggest enhancement is to the software’s aesthetics, including new fonts and colors. This year’s visual enhancements serve to make TaxAct appear more modern and easier to use.

Likely in an attempt to keep up with the much more popular TurboTax software, TaxAct also includes more tips and flags throughout the filing process for 2019. Even so, TaxAct doesn’t have nearly as many cool features as some of its competitors.

TaxAct Packages

The biggest appeal of TaxAct is its low prices. Each of its products is more affordable than a comparable product from TurboTax or H&R Block. Like its competitors, TaxAct also has free versions for both federal and state taxes, but these are limited in their abilities.

Note on prices: Tax software providers including TaxAct regularly update prices. We have provided ranges to give you an idea of what to expect. Check the prices on TaxAct’s website before filing.

Here are the packages offered by TaxAct in 2019:

TaxAct Free

  • Cost for Federal: $0
  • Cost for State: $0

If you’ve filed with TurboTax before, you know the term “free” doesn’t always mean free.

However, thanks to TaxAct’s price lock guarantee, the price you see advertised before starting the process is the price you will pay at the end. That transparency is especially helpful the closer we get to April 15, when the price of tax preparation software tends to rise.

So what does this mean for the TaxAct Free product? You will pay absolutely nothing to prepare, print and e-file federal taxes and state taxes. You also get free account support.

But the best things in life aren’t free. The TaxAct Free package is very limited in scope, only allowing you to file a 1040, and is ideal for filers without dependents.

You must take the standard deduction (meaning you can’t itemize), and you can’t file Schedules 1 through 6. You can take the child tax credit, education credit, child and dependent care expense credits and the elderly/disabled credit, but otherwise, you are limited.

If you are a parent with a kid still at home whom you want to claim as a dependent or if you made any income outside your W-2 (like if you are a landlord or a freelance writer), you should not use this free version.

Returning users may be especially disappointed, as TaxAct used to offer more for its free version.

TaxAct Basic+

  • Cost for Federal: $10 to $15
  • Cost for State: $19.95

Despite the cost increase, TaxAct Basic+ doesn’t cover too many more filers. If you run a small business, for example, you’ll still have to go with a more expensive product.

If you have just regular sources of income but have dependents or college expenses, this is the right package for you.

TaxAct Deluxe+

  • Cost for Federal: $30 to $48
  • Cost for State: $39.95

TaxAct Deluxe+ is the product that should cover most filers’ needs. This package is perfect for homeowners and those who need to itemize deductions, offering support for Schedule A.

TaxAct Deluxe+ is also great for filers with student loan interest, moving expenses or a Health Savings Account.

When you pay for TaxAct Deluxe+, you’ll get access to more tools that help you maximize your deductions by adding data about investment income and charitable donations (whether they were financial donations or donated goods, like clothing or food).

TaxAct Premier+

  • Cost for Federal: $40 to $50
  • Cost for State: $39.95

TaxAct’s second most expensive package is for filers who have a lot of investments, like rental properties and stocks. This package is also great for filers who sold a home in 2018, who have foreign bank accounts and who incurred expenses as part of their investments.

Filers get prioritized support with this package, including screen sharing and in-app chat. This package supports Schedules E and D.

TaxAct Self Employed+

  • Cost for Federal: $60 to $78
  • Cost for State: $39.95

Be your own boss, they told me. Become a freelancer, they said. But none of them told me about some of the extra expenses I would incur.

As luck would have it, filing taxes as a small business owner or freelance contractor can be confusing (and you have to pay more since you act as employer and employee). Tax preparation software, as a result, is also more expensive for these filers.

TaxAct’s Self Employed+ solution includes all the forms you will need as an independent contractor, including Schedule C and Schedule C-EZ.

Pros and Cons of TaxAct

TPH photo intern Michaela Estes shows how taxpayers can use TaxAct in St. Petersburg, Fla. on March 12, 2019. Aileen Perilla/ The Penny Hoarder

So what are the benefits of using TaxAct to self-file this year, and are there pitfalls?

The Pros of Using TaxAct

  • Affordability: Of the major players in the tax preparation space, TaxAct is easily the most affordable. If you plan to owe Uncle Sam when you file rather than receiving a glorious refund, the appeal of less expensive software can be too good to turn up.
  • Previous tax returns: TaxAct makes it easy to import your data from previous TaxAct returns to make the process of filing faster. And for those of you who have used TurboTax or H&R Block in the past and are just learning about TaxAct, the software includes an option for importing data from previous tax returns with those vendors.
  • Refund bonus: TaxAct partners with retailers and restaurants such as Amazon, Bed Bath & Beyond, Regal, Domino’s, Game Stop and The Home Depot. If you decide to put a portion of your refund on a gift card to one of those retailers, TaxAct will add a bonus to your refund up to $100.
  • Seven-year access: When you file a return with TaxAct, you can access that return for up to seven years.
  • Advanced tech: TaxAct may not be as advanced as its competitors, but it is certainly innovating with new features. For example, you can import the data from your W-2 simply by taking a picture with your phone.
  • $100K accuracy guarantee: TaxAct offers a pretty bold guarantee. If they make a mistake with your tax filing, you are covered with a $100K accuracy guarantee, which covers the difference between the higher refund you might have earned, any legal and auditing costs and all software costs.
  • Online flexibility: Because the software is internet-based, you can easily switch between devices, like if you start at your desktop but need to save your sanity by finishing on the couch in front of the TV with a cold beer. TaxAct even offers a mobile app.

The Cons of Using TaxAct

  • Support: Levels of support vary by TaxAct package. It’s no surprise that the more you pay, the better support you get. That said, support is not as robust with TaxAct as it is with direct competitors.
  • Audit defense: If you want audit protection, you’ll have to shell out additional cash — and that audit support comes from a third party. Sure, your chances of being audited are roughly 1 in 160, but as we don’t like to play it fast and loose, we think audit protection is ideal.
  • Fewer tools: TaxAct gives filers the bare minimum. Is it possible to file with the bare minimum? You betcha. But is it fun? Well, taxes are never fun, but when you are self-filing and are accustomed to the tips and tools that more expensive options like TurboTax offer, you can fast become frustrated with TaxAct.
  • Limited free version: TaxAct used to offer much more from the TaxAct Free package. It is very limited in scope for 2019.
  • Refund payment: TaxAct makes it possible to pay for its software with your refund, which sounds like a cool feature until you learn that the software charges you $39 to do so. This is clearly meant for people who cannot afford the software price up front, but at that point, it would be cheaper to pay for it with a high-rate credit card. Assuming you were to pay it off with your refund immediately, you will hypothetically accrue less than $39 in credit card interest.

TaxAct vs. TurboTax vs. H&R Block

So how does TaxAc stack up to more popular software from TurboTax and H&R Block?

The table below compares the three major software options on prices for online versions (federal taxes and state taxes), level of support and tools. Remember, prices vary depending on time of year and current promotions. All prices were accurate at time of publishing.

Another quick note: State filing prices are per state. If you moved during 2018 from one state with income taxes to another, you will need to pay the state fee twice. Ouch, I know.

  H&R Block TurboTax TaxAct
Price ranges provided. Tax software prices will fluctuate throughout tax season.
Costs for Federal Free: $0
Deluxe: $22 to $50
Premium: $38 to $70
Self Employed: $60 to $104
Tax Pro Review: $119
Free Edition: $0
Deluxe: $30 to $40
Premier: $60 to $80
Self Employed: $90 to $120
Free: $0
Basic+: $10 to $15
Deluxe+: $30 to $48
Premier+: $40 to $58
Self Employed+: $60 to $78
Costs for State Free: $0
All other plans: $36.99
Free Edition: $0
All other plans: $39.99
Free: $0
Basic+: $19.95
All other plans: $39.95
Level of Support Ask a Tax Pro service (unlimited chat and screen share), price varies by package; Tax Pro Review for $119.99 federal and $36.99 state filings; free 24/7 tech support; brick-and-mortar locations for assistance, but that comes at a fee. TurboTax Live Basic for $89.99 federal and $29.99 state (essentially is the free version of TurboTax but with on-demand video access to an actual tax professional, who provides a final review); video tutorials; in-app chat; etc. Minimal, but increases with higher-tiered packages; ranges from online FAQs to phone and in-app chat, though reviews of these support options aren’t kind.
Tools Can pay for Tax Pro Review; has good in-app tools (like W-2 import, a searchable database and links to important information). Most user-friendly interface on the market; basic in-app tools (like W-2 import, chat/interview experience for filling out, etc.) Basic in-app tools (like W-2 import and calculators); improved over previous years, but still rudimentary.

TaxAct Review: Should You Use It?

You get what you pay for. If you are a penny pincher, TaxAct might be right for you. But if you are a true Penny Hoarder, you might think differently. Penny Hoarders spend their money wisely, and I think something as important as filing your taxes might deserve a little more spending for a better experience, a better refund and a heightened feeling of security.

Plus, TaxAct reviews on Consumer Affairs from actual filers in 2019 are less than favorable. You’ll notice a running theme of filers who previously loved TaxAct now complaining about the pricing structure (you get less for free now), common errors and lack of support.

I rate TaxAct 2.5 stars; all it really has going for it is its low cost and gimmicks like the refund bonus. The low cost, however, is not worth the lack of support and tools.

About TaxAct

TaxAct was founded in 1988 and is based in Cedar Rapids, Iowa. It employs more than 120 tax-savvy people in its office and has filed more than 65 million returns. TaxAct isn’t just a solution for individuals; business owners and even tax professionals rely on its software every year.

You can learn more about TaxAct here.

Timothy Moore is a market research editor and freelance writer covering topics on personal finance, careers, education, pet care, travel and automotive. He has worked in the field since 2012 and has been featured on sites like The Penny Hoarder, Debt.com, Ladders, Glassdoor and The News Wheel

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