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- TaxAct offers four tax-filing plans, including a free federal option for basic tax situations.
- TaxAct's interface isn't as detailed as some of its higher-end competitors, but it is easy to use.
- Updates this year include free expert access at all price points, plus the option to pay more to have an expert file for you.
- See Personal Finance Insider's picks for the best tax software »
I'm a personal finance nerd who looks forward to filing their taxes every year. In the years I owe, I find myself grateful for the abundance of the past year as I input each number into my tax filing software. In the years where I get a refund, I find myself celebrating every last penny of the "extra" cash.
But most people don't take joy in filing their taxes. Most people are looking for a way to file that involves the least friction and low fees. TaxAct is one option on the menu.
TaxAct is an online tax prep company where you can prepare and file your tax return yourself. Like most online tax software, there are different packages that cover specific tax forms — the more complex your situation, the more you'll pay. Filers who are looking for an experience with fewer frills, more access to tax experts, and a lower price tag will find it with TaxAct.
Here's a look at how TaxAct works, how much it costs, and who it's best for.
| 4.7 / 5 |
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TaxAct gets the job done with fewer bells and whistles than H&R Block or TurboTax, though costs can still add up. It's best for someone who appreciates a simple, streamlined interface. |
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$0 - $94.95 $39.95 - $54.95 per state |
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W-2 income; unemployment income; retirement distributions; tuition and fees deduction; earned income tax credit; child tax credit; stimulus credit |
Who should use TaxAct?
TaxAct is best for people who don't want to pay for high-end software like H&R Block or TurboTax, but are still willing to pay a premium for an efficient and streamlined interface to file their own taxes.
Filers who don't require much hand-holding will get the most out of the actual TaxAct software. However, all of TaxAct's plans offer free access to experts to answer questions during the filing process, which is a huge, new value-add this year. You also have the option to upgrade and have a professional file your taxes.
TaxAct is not as cheap as TaxSlayer, but its tax document upload and import features have a better track record of working well than TaxSlayer's do. If you're willing to pay more for this time-saving feature, TaxAct could be worth it.
How much does TaxAct cost?
TaxAct's formula is similar to that of many other tax-filing software companies: You pay one price for a federal tax return, and an additional price for a state tax return. Payment is due when it's time to file, so if you're not happy with your experience or refund calculation and decide to abandon your return, you won't owe TaxAct anything.
TaxAct also now offers personalized support from tax experts at no additional cost through a program called Xpert Assist, which applies to all plan levels. Some of TaxAct's competitors, like H&R Block and TurboTax, have been doing this for years, but charge extra.
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$0 - $94.95 |
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$39.95 with the Free version $54.95 with the Deluxe, Premier, and Self Employed versions |
Prices do not include discounts.
Cost of DIY options and what they cover ...
- Free. You can use this plan if you are paid through W-2s or collected unemployment income, and want to claim basic child tax credits and the earned income tax credit (EITC). Credits for childcare expenses aren't included.
- Deluxe: $46.95. The Deluxe package allows you to file for those childcare expense credits, along with credits and deductions for homeowners, health savings account owners, and those who are currently paying student-loan interest.
- Premier: $69.95.
- Self-Employed: $94.95. Self-employed people have a unique tax situation with credits and deductions that vary depending on the structure of their business and the industry in which they work. TaxAct's Self-Employed package addresses these specific needs.
Extra fees will apply if ...
- You need state filing. If you live in one of the majority of states that require you to file state income taxes as well, you'll have to pay an additional $39.95 to $54.95 per state. If you lived or worked in more than one state, you may have to pay for multiple state returns.
- You want a tax expert to file your taxes for you. Starting mid-January, TaxAct offers the option for users to elect that an expert file their taxes instead of doing it themselves. This option, called Xpert Full Service, costs between $99.95 and $279.95 for federal returns across all four levels. Simple state tax returns are free at the $99.95 price point, while more complicated state returns cost $44.95 each.
- You pay TaxAct from your refund. If you're expecting a tax refund, TaxAct will ask if you want to use part of it to pay for its tax prep services. It sounds more convenient than pulling out a debit or credit card on the spot, but a significant processing fee applies.
How does TaxAct work?
TaxAct is a tax software company founded in 1998. Based in Cedar Rapids, Iowa, TaxAct is one of the biggest names in the industry.
When you first initiate the tax filing process with TaxAct, you will be guided through a series of questions. You'll be asked if you have children, run a business, own a home, have student loans, and more.
All these questions allow TaxAct to recommend the best package for your tax situation. The interface of each package is slightly different, providing those with simple tax returns and those with self-employment income with appropriately different experiences. You may also choose to have an expert file your taxes for you.
As you're guided through the tax-prep process, TaxAct pays particular attention to areas where "double answering" is common. For example, self-employed individuals with marketplace healthcare plans can potentially qualify for multiple credits, so you have to be sure you don't double dip with the same qualified healthcare premiums. TaxAct catches these common errors, notifying you about what it's doing behind the scenes to ensure all your calculations are accurate.
All plans allow you to upload or import W-2s and 1099s for easy data entry.
Is TaxAct reliable and safe?
TaxAct keeps your information secure with data encryption. It also requires multi-factor authentication every time you log in to verify your identity.
When it comes to calculating your taxes owed or expected refund, TaxAct is reliable.
Are there any downsides to using TaxAct?
TaxAct's free version doesn't cover as many situations as TaxSlayer or H&R Block. If you're repaying a student loan and are eligible to deduct interest, for example, you won't be able to do that with the free plan.
As for user experience, you won't get guidance or explanations on every single tax concept within the software itself like you would with H&R Block or TurboTax. However, there is a new, free option on TaxAct to ask an expert questions about your return, called Xpert Assist. This is a notable feature, as most other tax software companies require you to pay for this guidance. You may also opt into full-service professional filing at additional cost.
There is a new, free option on TaxAct ask an expert questions about your return, called XPert Assist. You may also opt into full-service professional filing at additional cost.
Additional reporting by Tanza Loudenback.
Via PakApNews