While TaxAct's products are on a par with its main competitors, the company differentiates itself by backing up its processing claims with a guarantee of accuracy, making it one of the best tax software options available.
TaxAct was founded in the late 1990s as Second Story Software, becoming TaxAct in 2013 after fifteen years or so of expansion. The company reports that its products have been used to prepare some 60 million electronically-filed returns in the United States since the year 2000. This makes them one of the bigger players in a very crowded tax preparation software marketplace, alongside names such as TurboTax and TaxSlayer.
While its products are on a par with its main competitors in terms of functionality and ease of use, the company differentiates itself by backing up its processing claims with a guarantee of accuracy. This guarantee is backed up in monetary terms, a feature that will especially appeal to users with larger tax bills or more complicated tax return scenarios.
The software is generally considered to be a good value choice, with a range of five products (starting with a free version) that should suit most users. The interface is unfussy and there are some impressive support options including a screen-sharing feature that would save time in a support call situation. The company markets its products as no-frills, functional packages that many users will appreciate, and their pricing is very competitive.
TaxAct review: Cost
- Free edition: $0 ($4.95 fee for State taxes)
- Deluxe edition: $29.95 (Federal) & $39.95 (State)
- Premier edition: $39.95 (Federal) & $39.95 (State)
- Self Employed edition: $74.95 (Federal) & $49.95 (State)
Handles all State and Federal tax returns
Import your W-2
$100,000 accuracy guarantee
TaxAct’s prices are slightly lower than the industry average for online preparation of State and Federal taxes. The Free version allows users to file Federal taxes for free, but with some notable limitations and a fee of $4.95 for the filing of State taxes. One such limitation being that users must only have standard deductions and credits.
The Deluxe version allows itemized deductions and has features including a wizard to help calculate deductions for, say, charitable donations. It runs at $29.95 for Federal and $39.95 for State. The Premier version costs $39.95 for Federal and the same for State and offers priority support, being aimed at people with rental properties or investments. Finally, the Self Employed edition, coming in at $74.95 for Federal and $49.95 for State, is the highest-end package and will work for freelancers or small business owners.
TaxAct review: Products
- Free edition: for simple returns with no itemizations
- Deluxe edition: Unlimited support, fully itemized deductions
- Premier edition: For complex returns including investment portfolios
- Self Employed edition: Tailored for small business owners
TaxAct’s Free edition is perfect for simple tax returns without any itemizations. It can be used by people filing a 1040 and State return (Federal returns incur an extra fee) and aren’t claiming any deductions or credits beyond the standard ones. Its good, but not as feature-packed as Credit Karma Tax. The Deluxe package is the most popular of TaxAct’s products. It comes with unlimited support from tax specialists, fully supports itemized deductions and has a plethora of extra features such as a wizard to help users work out the deductions for charitable donations.
The Premier version is for users with more complicated tax situations, including people who own rental properties or have investment portfolios. This version comes with enhanced support features such as a screen sharing option for working efficiently with TaxAct’s specialists and some in-program chat support. Finally, the Self Employed version is the highest-end edition and includes all the features from the other packages. It is tailored for self employed, freelance and small business-owning users.
All editions of TaxAct’s software are fully equipped to prepare and submit tax returns in all fifty States as well as all Federal tax returns, although State tax capabilities incur an extra fee for all versions. All editions also allow users to import their W-2 paperwork and the mobile app has smart camera functionality so users can capture their W-2 instantly. Finally, TaxAct guarantees that their software is accurate and that the process results in maximum refunds for users. In case of any errors, TaxAct will refund the software fees and pay the difference up to $100,000.
TaxAct: Usability / User reviews
- Plenty of support features; tax tutor, checklist, smartphone upload
- Donation assistant on higher-end packages
- Scenario builder for planning future tax return
- A+ rating from the Better Business Bureau
TaxAct follows the formatting conventions of most of its peers, with bar navigation and data gathered with a mix of boxes and conversational-style questions. It’s a functional, unfussy interface that seems a little more utilitarian than say, TurboTax or H&R Block, but in the end it’s a tax return preparation program not a video game, hence this shouldn’t matter too much to users.
With all of the versions, the mobile app allows for the uploading of W-2 forms via smartphone cameras which is a great time saving feature. The programs offer a host of support features including a built in tax tutor, a list of the tax implications of various life events, a tax return checklist and also a donation assistant on the higher-end versions. Previews for various stages of the tax return are available and users can even run various hypothetical scenarios to help them plan for future tax returns. TaxAct has been accredited with the Better Business Bureau since 2001, and the organization currently gives the company the top, A+ rating.
Should you choose TaxAct?
TaxAct have four solid tax preparation software products and their prices compete well with comparable versions on the market. Their user interface is clean and unfussy, and beyond the free version, the packages include good real-time support options and helpful wizards. One of their biggest selling points, though, is the accuracy guarantee that promises compensation of up to $100,000 if the software doesn’t deliver the maximum refund to users, an iron-clad offer that will appeal to users with higher incomes and more complex tax returns.