TaxAct review

The tax software with a plan tier to cover every tax situation

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Image Credit: TaxAct

Our Verdict

TaxAct offers a variety of plans to suit each need at an affordable cost, and each plan has available support. Our concern is that the additional software for the state return is an additional cost, even with the highest tier.

For

  • Affordable cost
  • Free tier
  • Clean modern interface
  • Digital archiving included

Against

  • Additional cost for state return
  • Free tier too limited

TaxAct is a veteran in the tax software field, with roots back to 1998, and offering both downloadable and online tax return software. The software is designed in-house with the input of tax accountants for the highest degree of accuracy.

TaxAct endeavors to offer the ‘Best deal in tax,’ with “Satisfaction (online) and money-back (desktop) guarantees.” No passing fancy, as backing up these claims are their $100k Accuracy Guarantee and Maximum Refund Guarantee. TaxAct is clearly doing something right, as over 65 million returns have been filed with its software to date.

Plans

While TaxAct does offer a free plan, the company also has a number of additional tiers for customers with more demanding tax needs (Image Credit: TaxAct)

Pricing

TaxAct offers a spectrum of tiers to fit each user’s specific tax situation. TaxAct was an early player to offer a free online tax filing solution. Also offered are Professional, and Business tiers.

Starting off the individual tiers is the ‘I ❤️ Free’ tier, that lives up to its name with no cost for either a Federal return, or a State return. It covers some basic tax scenarios, including single or married filings, and W-2 as well as retirement income. While there is account support if an issue arises, the limitations include no importing of a previous year return, and no itemizing of any deductions. A bonus, is that unlike the paid tiers, this lowest tier actually includes the State return at no additional cost.

Moving up to the paid tiers, TaxAct offers the ‘Basic+’ tier at a cost of $9.95 (about £8). This adds such features as importing a prior year return, support for the popular child tax credit, the earned income credit, and education expenses. The support is upgraded to unlimited via in-app email. The unfortunate part of this plan is that the State return is an additional fee of $19.95 (about £15), which ironically costs more than the Federal plan.

Next up is their ‘Deluxe+’ tier, which can be had for $29.95 (about £23). This higher tier is designed for homeowners, and can handle more complicated tax situations, with features for itemized deductions, student loan interest, Healthcare Savings Accounts, adoption credits and moving credits. Also included is access to a tax specialist via phone support. While this tier is adept at Federal taxes, it also requires an additional purchase for a State return.

The ‘Top of the heap’ tier from TaxAct is known as ‘Premier+,’ and is designed to handle the most complicated of returns, having the features of all the lower plans, as well as adding support for foreign bank accounts, gains and losses from stocks, sales of a home or other investments, rental property income, royalty and Schedule K-1 income, and investment income expenses. There is priority support available, and for additional hand holding, which includes screen sharing. The Premier+ tier costs $39.95 (about £31).

Beyond this, also offered is TaxAct Online 2018 ‘Self Employed+ Edition’ which is designed for freelance and self-employed workers with 1099-Misc income. It is offered with both online, and downloadable versions, at a cost of $59.95 (about £46), with the usual additional fee for the State tax return. This version focuses on self employed tax issues, including a Deduction Maximizer that is targeted to the expenses and depreciation costs for those that do freelance work.

Accuracy

TaxAct does offer a $100,000 Accuracy Guarantee in case the company makes any mistakes (Image Credit: TaxAct)

Features

For 2019, TaxAct performed a significant visual update, with the goal of a more modern visual theme. In addition, tips have been updated, with more prominent flags for missing or erroneous information.

TaxAct makes it easy to file a return, and claims simple returns can be completed in as little as 10 minutes. While we think it will take most users a little longer than that for anything but the simplest of a return, TaxAct provides plenty of assistance along the way to keep you on track.  

The online interview process makes it simple to enter amounts, and breaking it down to simple questions, rather than dealing directly with all those lines on annoyingly obtuse IRS forms. TaxAct then carries this information forward, and enters it directly on the appropriate forms for the user.

A significant burden for filing the taxes is entering last year’s data. TaxAct, like many other online services, accomplishes this by allowing the user to import a prior year’s data. Even more innovative, is that an entire W-2 can also be added by snapping and uploading an image with the smartphone. Finally, there is also a ‘Stock Assistant’ for making a  spreadsheet entry from capital gain transactions that are from a Form 1099-B.

TaxAct supports their accuracy, with a ‘100k Accuracy Guarantee’ to backup that the math will be totally correct. Another useful service is TaxAct helps with the issue of keeping old tax returns available in case of an audit, and rather than keeping paper copies, TaxAct provides digital archiving for 7 years of access for previously filed returns.

Final verdict

With TaxAct’s four tiers of plans, anyone needing to file a tax return is sure to find an affordable plan to suit their needs. We like the included feature set, and that the higher tiered plans are designed to handle the more complicated tax situations, such as rental property, or K-1 income. The included support should put novices at ease, while providing useful backup for tax veterans.  

Our concern is that the additional software for a State return is both more expensive than the lower federal plan, and is not included or bundled into the cost for the higher plan, which should give user’s cause to consider the ‘Total cost of ownership’ for their comprehensive tax needs, which are quite likely to include a State tax return.

Overall, TaxAct offers an enticing suite of online tax software.