Looking forward to the approaching tax period and seeking budget-friendly tax preparation software? TaxAct might be your answer. However, you may need to determine the exact costs of filing taxes, especially if you need more clarification about your income details, deductions, and available tax credits.
Our evaluation of TaxAct's self-service tax filing software will help you decide if it meets your needs and provide insight into its potential cost.
What Is TaxAct?
TaxAct serves as a tax preparation tool, assisting individuals and enterprises in filing their taxes with precision and efficiency. It delivers various solutions and services customized for varying tax scenarios, such as basic tax submissions for individuals, self-employed, and small-scale businesses.
The platform provides step-by-step guidance, offers tax computation tools, and performs checks for errors, aiding users in optimizing their allowable deductions and credits while reducing mistakes. TaxAct caters to user preferences by providing both web-based interfaces and downloadable software versions, thus offering flexibility in choosing the most suitable option.
Pros and Cons of TaxAct
Pros
- Navigate between sections seamlessly without re-answering interview questions
- Receive complimentary support from CPAs, Enrolled Agents (EAs), and tax attorneys, accessible to all users
- Easily import an electronic version of your W-2 into the software
- Access expert assistance with every filing package
- Enjoy free federal and state filing, inclusive of student and child tax credits
- Benefit from an efficient and user-friendly interface
- Simplify data entry with tax document upload and import features
Cons
- State return fees are higher than those of competitors
- Regular prompts to upgrade or purchase additional services
- Filing via the mobile app is restricted to specific criteria
- Guidance and explanations of tax concepts are limited
- Considered an average choice in terms of pricing
Who Is TaxAct Best For?
TaxAct emerges as the optimal choice for individuals seeking an economical alternative to upscale software like H&R Block or TurboTax yet still desiring a well-designed, efficient system for self-tax filing.
Those who are confident in their tax filing abilities and need minimal guidance will find maximum value in using TaxAct's standalone software. A noteworthy feature introduced last year across all TaxAct plans is the complimentary expert help available during the tax filing process, an added perk of significant worth.
While less budget-friendly than TaxSlayer, TaxAct outshines with its superior document upload and import functionalities that have consistently proven to be more reliable than those of its competitors. If one values time efficiency and is prepared to invest slightly more for this convenience feature, it could make sense to opt for TaxAct.
TaxAct Pricing
- Free (for eligible users): This option is available for individuals receiving W-2 income or unemployment benefits seeking to claim basic child tax credits and the Earned Income Tax Credit (EITC). However, childcare expense credits aren’t covered. State returns with this plan incur a $39.99 fee.
- Deluxe: Priced at $49.99, the Deluxe package allows users to claim childcare expense credits, as well as credits and deductions related to homeownership, health savings accounts, and student loan interest payments.
- Premier: Available at $69.99, the Premier package caters to individuals with investment income, rental property earnings, and foreign bank accounts. It also suits those who have sold a home within the tax year.
- Self-Employed: Priced at $99.99, the Self-Employed package is designed for self-employed individuals, addressing their unique tax circumstances, including various credits and deductions dependent on business structure and industry.
Circumstances That May Require Additional Fees
- You require expert assistance: TaxAct imposes a $59.99 fee for live expert help, applicable to all packages, including free federal filing.
- You necessitate state filing: For residents of most states mandating state income tax filings, an additional charge of $39.99 or $59.99 per state, depending on the package, is incurred. If you lived or were employed in multiple states, multiple state returns may necessitate payment.
- You opt for payment from your refund: TaxAct offers the option to use a portion of your expected tax refund to cover its tax preparation services. While this may seem convenient, a significant processing fee applies.
>> Check Out the Best Pricing for TaxAct >>
How Does TaxAct Work?
In the same vein as most other tax software, TaxAct employs a Q&A model to help you navigate through your tax return. You respond by filling in empty boxes, clicking on squares within a matrix, replying to straightforward yes or no queries, or choosing options from drop-down menus.
Once TaxAct has access to your personal data, it’ll pose a sequence of questions regarding your income. The responses will assist TaxAct in determining the appropriate tax forms that you need to complete. This tailor-made checklist isn't visible to you, though. Instead, TaxAct informs you about which form it will query next: unemployment (1099-G) or retirement disbursements (1099-R).
Unlike some platforms that allow multiple file uploads, with TaxAct, you’re limited. The only documents permitted for upload are last year's tax return and the current W-2 document. Entering the Employer Identification Number (EIN) for each W-2 form is mandatory. Should there be several 1099-MISC or 1099-NEC forms at hand? They must also be inputted manually into the system one by one.
The TaxAct's guided journey can be exited at any stage by simply opting for federal or state links situated in the left-hand navigation panel. This allows you to directly reach specific sections such as income, deductions, and credits. Although their step-by-step questionnaire is incredibly detailed, it’s unwieldy. You may respond to queries that are irrelevant to your tax circumstances.
The complimentary aid and resource sections provided by TaxAct are among the industry's finest. By selecting the Help tab, one gains access to an extensive compendium of guides and a tax glossary and connections to IRS publications via a panel on the right-hand side.
A handy widget tool is located at the top of the help panel that allows you to search for specific topics or IRS forms swiftly. As you proceed with your tax return, contextual links will provide relevant support.
The remainder of the Help panel includes default-related article links and various contact support options. Most times, scheduling a call with a specialized product expert will be necessary for further help. However, live chat is only available for inquiries regarding navigation within TaxAct during your return.
Beyond the confines of the Help panel, you will notice a circled "i" adjacent to certain form boxes. By clicking on it, additional contextual aid in the form of pop-ups is offered. Some answers may prove more helpful than others. Xpert Assist services are available at an additional cost if you require personalized tax guidance.
Is TaxAct Safe to Use?
TaxAct collaborates with the IRS and state agencies to adhere to universally accepted protocols and conventions for safeguarding physical and online security. Many safety measures have been put in place to verify your account ownership. The platform mandates the use of intricate passwords and provides additional protection through multi-factor authentication.
TaxAct's Handy Features
If you're using another provider, TaxAct allows you to easily transfer your previous year's return from TurboTax or H&R Block by uploading a PDF of your 1040 return.
- Automatic import of specific tax documents: TaxAct allows you to import W-2s or capture photos of them and import a QR code. You can upload 1099-B data from your broker if it's in a spreadsheet format (CSV file). This functionality eliminates the need to manually input numbers from various boxes, saving time and effort.
- Donation calculator: TaxAct's Deluxe, Premier, and Self-Employed packages include the Donation Assistant feature, which helps users quickly determine the deduction value of donated items such as clothing and household goods.
- Platform flexibility: Since the software is web-based, users can access their accounts from different devices, facilitating flexibility in working on their tax returns. However, TaxAct no longer provides a mobile app for this purpose.
How Does TaxAct Deal With Self-Employment?
TaxAct approaches self-employment earnings and costs in a manner consistent with the rest of their website. Their Q&A section and accompanying information provide thorough coverage. They instruct you on what needs to be reported and offer data entry fields or import tools for forms such as 1099-NEC and 1099-K that you may have received.
You’re required to input your total gross receipts. TaxAct addresses all the necessary inquiries outlined in Schedule C, including your chosen accounting method (either cash or accrual).
In addition to handling depreciation, the business use of home, self-employed health insurance deduction, and the Qualified Business Income deduction are also managed in this section. It provides a step-by-step guide to completing the expenses section of Schedule C by including fields for your business costs.
It addresses tax-related matters such as the self-employed tax change and state or local tax refunds to ensure all loose ends are tied up. Once you have finished entering your information in this section, it’ll provide a summary of all your entries.
While more guidance on self-employment would be appreciated, there’s currently some scattered information that could benefit from being consolidated into a centralized location rather than appearing through multiple links on the page.
The company acknowledges this issue and is actively working towards improving it. It should be noted that TaxAct's user experience can be somewhat disjointed compared to TurboTax which offers smoother transitions between sections. Nonetheless, TaxAct remains a reliable website with a track record of delivering excellent service.
>> File Your Taxes With TaxAct Today! >>
Does TaxAct Check Your Return?
TaxAct's standout feature, known as Double Check, is its ultimate review process. This comprehensive assessment thoroughly examines your tax return to identify any incomplete or conflicting information, accuracy concerns, and opportunities to reduce your tax liability in order to increase your refund amount.
It then pinpoints the problematic pages and presents them for your attention, enabling you to rectify any errors before progressing to the prior-year comparison reports and ultimately filing.
When it comes time to settle a balance owed, TaxAct offers several convenient payment options. You have the flexibility to make payments via direct withdrawal from your bank account, credit card payment, or by sending a check.
TaxAct provides help with establishing IRS payment plans using Form 9465 if needed. Alternatively, you can choose to submit your payment directly through the IRS's secure Direct Pay platform. For state taxes that are due, individuals should reach out directly to their respective state department of revenue for further guidance on making payments.
TaxAct Refund Options
Regardless of how you choose to file, there are multiple ways you can receive your refund:
The quickest option is to have the refund directly deposited into your bank account. Alternatively, you can opt to load it onto an American Express Serve prepaid debit card (if your state offers a prepaid card option for tax refunds, check if that applies) or have it sent as a paper check.
You also have the choice of applying the refund towards next year's taxes or purchasing U.S. savings bonds with it. If you prefer, you can pay for the software using your refund. However, please note that there will be a charge of $17.99 for this service.
TaxAct Reviews – Is It Legit or Not?
Check out these genuine customer reviews that could assist you in making a well-informed and improved choice.
TaxAct Tax Software Alternatives
TurboTax
Intuit TurboTax stands out as our top choice for small business online tax software due to its user-friendly interface, vast database of deductions and credits, and dedicated support tailored to startups. This comprehensive solution caters to businesses of all sizes and types, although it may come at a slightly higher cost compared to other tax software programs.
Within the Intuit TurboTax suite, small business owners are advised to opt for either the TurboTax Self-Employed online package or the TurboTax Business application. Both options offer a seamless experience while ensuring accurate tax filings.
>> File Your Taxes Online With Intuit TurboTax >>
TaxSlayer
TaxSlayer stands out as an excellent choice for small business filers due to its ability to handle complex returns at a competitive price compared to other major players in the industry. With TaxSlayer, you gain access to a priority phone line, top-notch customer service, and an intuitive platform that simplifies the tax filing process.
Furthermore, TaxSlayer offers customizable help based on your individual needs. If you prefer a guided approach, their interview option walks you through each step meticulously, ensuring both speed and accuracy in your filing process.
If you're confident in navigating tax forms independently, you can directly access specific forms to input your income and deductions swiftly.
Overall, TaxSlayer provides versatility by accommodating different preferences and expertise levels while maintaining its reputation for quality service. Whether you desire comprehensive guidance or prefer taking charge yourself with targeted form entry options when filing your taxes, TaxSlayer has got it covered!
>> File Your Taxes Online With TaxSlayer >>
H&R Block
H&R Block is widely known for its numerous branch locations across the United States. Nevertheless, the company also provides online filing options and downloadable software for tax preparation. Opting for their online package allows you to conveniently work on your taxes using their mobile app, which is available for both Android and iOS devices.
When it comes to catering to tax filers, H&R Block excels with its user-friendly interface that offers a modern and intuitive experience. Similar to other services in this domain, the platform guides users through a series of inquiries about their household income while also identifying potential deductions and tax credits along the way.
>> File Your Taxes Online With H&R Block >>
TaxAct Review – Frequently Asked Questions
Does TaxAct Offer a Mobile App?
Certainly! The TaxAct Express app can be accessed on iPhone and Android devices. However, it’s important to note that not all TaxAct users can file their taxes through the app.
Does TaxAct Import My W-2 or 1099?
If your employer is involved, you can import an electronic version of your W-2 form into TaxAct. By importing your W-2, all the necessary details will automatically fill in the appropriate fields, eliminating the need for manual input.
Can I File My Taxes for Free With TaxAct?
Indeed, you can file your federal return for free, but there are certain requirements you need to meet. Suppose your return is relatively straightforward, consisting of W-2, unemployment, and retirement income along with claiming the standard deduction and earning the Earned Income Tax Credit and child tax credit. In that case, you qualify for TaxAct's complimentary federal filing service.
Bottom Line
TaxAct's range of products is universally more affordable compared to similar options offered by other providers. This is a significant advantage, particularly for individuals who prioritize practicality and affordability and would appreciate the availability of reasonably priced help from real people if needed.
>> File Your Taxes Online With TaxAct >>
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