TaxACT Review

Full review

E-file state and federal returns for free or get extra assistance with the more sophisticated versions of the TaxAct software. TaxAct is a worthy competitor to the more established TurboTax.

Tax Products

If you need to file 1040EZ/A you can do it for free with the Free version of the tax software, which includes free state filing. When you pay extra for Basic ($14.99) you get unlimited phone support and you can import previous year data directly into this year's forms – this second benefit is probably the reason why people pay for an upgrade. State filing is at an additional cost. The Plus version ($19.99) is for itemized returns, homeowners, and investments. Premium ($29.99) is for self-employed people, freelancers, and contractors. These are good value plans and certainly among the cheapest. With all plans you pay when you file, although you get a locked-in price at the time you create the return, regardless of when you file.

One problem: TaxAct misses off some key forms from its list, which makes certain forms ineligible for filing in some states. Some of these forms are for corporations, but if you have a small business this is probably not the best online package for you.

Mobile apps

TaxAct Express is the app for iPhone and Android, and it basically follows the same premise as the free version of the online program. You can use it to prepare and e-file simple federal and state 1040EZ/A tax returns for free on your smartphone. There are also additional quick-use apps - Tax Return Status that updates you as to when the IRS has accepted your return and approved your refund, and Donation Assistant. The mobile apps are weak compared to other tax software packages, and only allow you to do the basics.

Security

When you sign in you receive a unique security code to your email or phone which is required to authenticate your identity. You’ll also need complex passwords to enter, plus the answers to security questions that you can set up and edit. Extra security precautions include a log of all activity on all devices so you can see any suspicious movements, and notifying you if another user has entered the same Social Security Number as you. TaxAct is fully protected with SSL protocol and safe payment gateways.

Extra features

With TaxAct you can import information from tax software programs TurboTax and H&R Block. You can’t prepopulate forms with last year’s information on the free version, but you can when you pay for the Basic package.

Audit assistance is there, but it is limited to a series of articles and written information rather than access to an actual expert. Additional extra features include healthcare assistance and FAFSA assistance, plus free Identity Recovery where you can access full identity restoration services for free (available with the paid-for versions of the software) if you discover you were a prior victim of identity theft.

Ease of Use

TaxAct is one of the easiest programs to use to get the end result you need – an accurate tax return that maximizes your refund and minimizes your audit risk. You go screen-by-screen through all the relevant sections and your input is automatically saved. It is a simple set-up, with none of the additional congratulatory notes and motivational messages TurboTax provides, and it is pretty easy to navigate – you click the forward and back buttons to advance through the process. You can also switch around by marking bookmarks in the form to return to at a later time.

You do get a lot of information as you progress through the system, perhaps too much as it gets a little overloaded at times. All this information is great for beginners but it clutters the screen and makes the process more tiring than with TurboTax.

If you make an error the program detects it right away so you can fix it there and then. Or, you get to the final review of the document and you’ll see any problems highlighted in red – error – or yellow – potential error. You don’t need to click back through the return to fix these; TaxAct lets you change the information from the review screen.

Help & Support

Right from the start, TaxAct gives you valuable information about your tax return with the Life Events feature (available in the paid-for Basic version and above). You click on an icon for a situation you have experienced that may have an impact on your tax, including Owning a Home, and Raising Children. Read the tutorial for background information that will help you fill out your return.

When you are working through the questions in the main section of the program, a pop-up Tax Glossary provides information and explanations, although these are not as easy to understand as those you find in TurboTax. There is also an Answer Center which links to FAQs as well as back to the relevant pages in your tax return.

The free version of the TaxAct package provides email support, and you only get access to telephone support when you buy the Basic version.

Overview

TaxAct is an extremely affordable, highly useful piece of online tax software. You get plenty of information and assistance when you fill out the form, which makes it easier to get it right and to get the refund you are entitled to.