Tax Act Review

WHAT IS TAXACT?

TaxAct is an online tax preparation platform that aims to simplify the tax filing process for individuals and businesses. Established in 1998, it offers a range of services to help you prepare and file your federal and state taxes electronically. The platform is designed to be user-friendly, guiding you through each step with easy-to-understand questions and prompts. TaxAct is an authorized IRS e-file provider, ensuring that your tax information is handled securely and efficiently. While it may not have all the advanced features of some premium tax software, it provides the essential tools needed for straightforward tax filing at a fraction of the cost.


WHO SHOULD USE TAXACT?

Confident tax filers who want to maximize their refunds through strategic deductions will find TaxAct a valuable tool. Its Deduction Maximizer provides personalized deduction suggestions tailored to your tax situation, helping you uncover savings you might not have considered before.

TaxAct is a great choice for budget-conscious filers seeking a reliable, cost-effective solution. It offers a straightforward and efficient filing experience with essential features to guide you through the tax process.

However, TaxAct may not be the best option for those looking for completely free filing. State returns can cost up to $60. Additionally, those needing to file multiple state returns may find the costs add up quickly, as TaxAct charges for each state filing.


WHAT ARE THE FEATURES?

TaxAct offers a robust set of features designed to make tax filing efficient, accurate, and affordable:

1. Guided Tax Preparation: TaxAct simplifies tax filing with step-by-step guidance using interview-style questions. The platform asks straightforward questions about your income, deductions, and credits, ensuring you don’t miss any important details. This guided process breaks down complex tax forms into easy-to-understand sections, making it perfect for both beginners and experienced filers. You can also skip around if you know exactly where you want to go, offering flexibility in navigation.

2. Xpert Assist: Xpert Assist connects you with tax professionals who can answer your questions or review your return before filing. This feature is available as an add-on, providing peace of mind for filers who want expert validation. You can schedule a call or engage in a live chat, making it easy to get personalized help. Xpert Assist is particularly useful for complex tax situations like self-employment, investments, or rental properties.

3. Max Refund and $100k Accuracy Guarantees: TaxAct guarantees that you’ll get the maximum refund possible or pay the least amount of tax owed. If you find a bigger refund using another software, TaxAct will refund your product fees. Additionally, the $100k Accuracy Guarantee ensures that your return is calculated correctly. If there’s an error due to a TaxAct calculation and you owe penalties or interest, TaxAct covers up to $100,000, offering security and confidence in your filing accuracy.

4. Comprehensive Tax Coverage: TaxAct provides comprehensive tax coverage for a variety of financial situations, making it a versatile choice for many filers. It handles W-2 income with straightforward filing options for employees and supports investment and cryptocurrency reporting for stocks, bonds, and digital assets. For those with rental properties, TaxAct covers rental income and expenses effectively. It’s also an excellent choice for self-employed individuals and small business owners, including freelancers and contractors, as it supports 1099 income, business expenses, and other relevant deductions. This broad coverage ensures that no matter your financial situation, you’ll have access to the necessary forms and schedules for accurate and compliant tax filing.

5. Import Options: TaxAct allows you to import previous year’s tax returns from other software or your electronic W-2s, saving you time and reducing data entry errors. This feature streamlines the setup process and ensures accuracy by pre-filling your personal information and prior year’s data. You can also import investment data, making it easier to file if you have stocks or crypto transactions.

6. Error Checking and Alerts: TaxAct uses real-time error detection to minimize mistakes and reduce the risk of audits. The software automatically checks your entries for inconsistencies, missing information, or calculation errors before you submit your return. It provides detailed alerts and suggestions on how to fix issues, ensuring your return is accurate and IRS-compliant.

7. Data Security: Security is a priority for TaxAct. It uses 256-bit SSL encryption to protect your data during transmission, ensuring your personal and financial information is safe. Multi-factor authentication adds an extra layer of security, requiring you to verify your identity before accessing your account. TaxAct is also an IRS-authorized e-file provider, adhering to strict security standards.

8. Multiple Filing Options: TaxAct gives you the flexibility to either e-file your return for faster refunds or print and mail your completed forms if you prefer a paper copy. E-filing is the most efficient option, with direct deposit refunds typically processed within 21 days. However, if you’re more comfortable with traditional mailing, TaxAct provides printable IRS-compliant forms.

9. Tax Calculators and Tools: Access to tax refund calculators, deduction finders, and other tools for accurate tax planning.

TaxAct offers a variety of calculators and tools to help you maximize your deductions and credits, including:

Tax Refund Calculator: Estimates your refund or amount owed.

Deduction Finder: Helps identify potential deductions you might qualify for.

Donation Assistant: Calculates the value of charitable donations.

These tools are designed to help you plan better and optimize your tax outcome.

10. Comprehensive Tax Resources: Extensive library of FAQs, articles, and guides to help you understand tax laws and deductions.

TaxAct includes a detailed knowledge base with FAQs, articles, and tax guides to help you understand tax laws, deductions, and credits. Whether you’re unsure about itemizing deductions, reporting investments, or claiming self-employment expenses, these resources provide clear explanations and up-to-date information. TaxAct also offers tax tips throughout the filing process, making it easier to maximize your refund.

TaxAct combines these powerful features with a user-friendly interface and affordable pricing, making it an excellent choice for a wide range of tax filers. Whether you’re filing a simple W-2 return or a complex self-employed income report, TaxAct offers the tools you need to file confidently and accurately.


IS IT EASY TO USE?

Our team found TaxAct to be exceptionally user-friendly, making the tax filing process straightforward and efficient. The platform's intuitive design and step-by-step guidance cater to both first-time filers and seasoned taxpayers. The interview-style questions simplify complex tax concepts, ensuring that all necessary information is accurately captured. We particularly appreciated the ability to navigate easily between sections, allowing for quick reviews and edits without unnecessary repetition. The real-time error checking feature is invaluable, promptly flagging potential issues and providing clear instructions for resolution, which enhances confidence in the accuracy of the return. Overall, our experience with TaxAct has been positive, highlighting its efficiency and user-centric approach to tax preparation.


USER INTERFACE

Yes, TaxAct is easy to use, offering a straightforward and intuitive experience that caters to both first-time filers and more experienced users. Getting started is simple—you’ll first provide personal information such as your birth date, filing status, and Social Security number. You can either type this information in manually or import it if you’ve filed with TaxAct in previous years. TaxAct also allows you to upload this data from another tax website using a PDF file, saving you time and minimizing data entry errors.

TaxAct offers flexible navigation options to accommodate different user preferences. You can choose to let TaxAct guide you through the entire 1040 form step by step, which is particularly helpful if you’re unfamiliar with tax filing or want to ensure nothing is overlooked. Alternatively, if you know which sections apply to you, such as itemized deductions, residential energy credits, or taxable interest income, you can select those specific tax topics. This personalized approach makes the filing process feel less overwhelming and more efficient.

Although TaxAct doesn’t provide a comprehensive navigation outline, the main page for each major section—such as Income, Deductions, and Credits—breaks down the 1040 into related tax topics, making it easier to understand and navigate. Recent updates have improved the site’s navigation, and if you get lost, you can easily return to the beginning of each major section using the toolbar in the left pane. This flexibility ensures that you can review and edit your entries without unnecessary repetition.

TaxAct’s interview-style questions are clear and easy to follow, breaking down complex tax concepts into manageable prompts. Helpful explanations and examples accompany each question, allowing you to understand the impact of your answers on your tax return. The real-time error-checking feature is particularly valuable, as it continuously monitors your inputs for inconsistencies or missing information, helping you avoid common mistakes and reducing the risk of audits.

While TaxAct’s navigation has seen some improvements, the error-checking functionality could be more robust. Additionally, self-employed users may find the support options somewhat limited compared to other tax software. Despite these minor drawbacks, TaxAct remains a user-friendly and efficient platform for preparing and filing your taxes, offering a flexible and guided approach to accommodate a variety of tax situations.


DESKTOP AND MOBILE APPS

TaxAct does not offer a dedicated desktop application, but its web-based platform is designed to work seamlessly on desktop and laptop browsers. This cloud-based approach allows you to access your tax return from any computer with an internet connection, eliminating the need for software installations or updates. The web interface is optimized for all major browsers, ensuring a smooth and consistent experience regardless of your operating system. This makes it convenient if you prefer to work on your taxes from different devices, as all your data is securely saved in the cloud and synced across platforms.

When it comes to mobile access, TaxAct does not have a standalone mobile app. However, the website is fully responsive and optimized for mobile browsers, allowing you to access your account from smartphones and tablets. The mobile version maintains the same intuitive navigation and functionality as the desktop version, including step-by-step guidance, real-time error checking, and access to help resources. You can easily start your tax return on one device and continue on another without losing your progress. The responsive design ensures that all features are accessible, although the smaller screen size may require more scrolling and zooming compared to a desktop or laptop experience.

While the lack of a dedicated mobile app may be a drawback for those who prefer app-based filing, TaxAct's web-based approach offers flexibility and convenience, allowing you to manage your taxes from virtually any device. If you’re comfortable using mobile browsers, you’ll find the experience smooth and functional. However, if you prefer a native app experience, you might find this limitation less convenient. Nonetheless, TaxAct’s responsive design and cloud-based functionality provide the flexibility needed for on-the-go tax management.


IS IT SAFE AND SECURE?

Yes, TaxAct is safe and secure, prioritizing the protection of your personal and financial information throughout the tax filing process. As an IRS-authorized e-file provider, TaxAct complies with strict security standards, ensuring your sensitive data is handled securely and confidentially. The platform uses 256-bit SSL encryption to protect your data during transmission, safeguarding details such as Social Security numbers and banking information from unauthorized access. Additionally, all stored data is encrypted, adding an extra layer of security.

To further protect your account, TaxAct uses Multi-Factor Authentication (MFA), requiring you to verify your identity using a unique code sent to your registered email or mobile device. This significantly reduces the risk of unauthorized access, even if your password is compromised. The platform also monitors account activity for suspicious behavior and automatically locks accounts after multiple failed login attempts, providing robust protection against unauthorized access.

TaxAct securely stores all user data in the cloud using encrypted servers protected by advanced firewalls. Regular backups ensure that your data remains safe and accessible, even in the event of system failures or cyber-attacks. This also allows you to seamlessly access your account from any device without compromising security.

Privacy is a key concern for TaxAct, and the company is committed to protecting your personal information. TaxAct does not sell your data to third parties without your consent. Your information is used solely for tax preparation and filing purposes, and you can manage your data preferences at any time. The platform is transparent about its data usage policies and complies with relevant data privacy regulations.

To enhance security, TaxAct also uses fraud detection algorithms to monitor for suspicious activities, such as multiple returns filed under the same Social Security number. If fraudulent behavior is detected, the platform promptly notifies both you and the IRS, helping to prevent identity theft and unauthorized filings. Payment transactions are also secured through PCI DSS-compliant payment gateways, ensuring that your credit card information is protected from breaches.

TaxAct continuously updates its security infrastructure to protect against emerging cybersecurity threats. Regular patches and system updates are implemented to safeguard against new vulnerabilities, ensuring a safe and secure user experience. Overall, TaxAct’s comprehensive security measures provide the confidence and peace of mind needed when handling sensitive tax data.


IS THERE A FREE VERSION?

Yes, TaxAct offers a free version, but it is designed primarily for those with simple tax situations. The Free Edition is best suited for single or married filers with straightforward income sources such as W-2 wages, unemployment income, or taxable interest under $1,500. It supports basic tax forms and the standard deduction, making it ideal for individuals who don’t need to itemize deductions or report more complex income types.

However, the free version comes with limitations. It does not include state filing for free—there is an additional fee for each state return filed. The Free Edition also restricts certain tax credits and deductions, such as the Child Tax Credit, Mortgage Interest Deduction, or investment income reporting. If your tax situation involves dependents, self-employment income, or investments, you’ll need to upgrade to one of TaxAct’s paid plans.

One notable feature of TaxAct’s free version is that it includes the same step-by-step guidance and real-time error checking found in the paid versions, ensuring accuracy and ease of use. It also allows you to import your previous year’s tax return if it was filed with TaxAct, making the filing process more efficient.

While TaxAct’s Free Edition is a solid choice for simple tax returns, it is more limited compared to some other free filing options. It’s an excellent solution if you have a basic return with standard income types, but if you require more advanced features or credits, consider exploring TaxAct’s Deluxe, Premier, or Self-Employed plans for more comprehensive support.


HOW MUCH IS IT?

TaxAct offers three main paid plans to cater to different tax filing needs: Deluxe, Premier, and Self-Employed. Each tier is designed to cater to different tax situations, with pricing that varies depending on the complexity of your return.

Deluxe

TaxAct Deluxe is priced at $50 for a federal return, with state returns at $60 each. This tier is ideal for those who want to itemize deductions or claim child and dependent care expenses, casualty and theft losses, health savings accounts, home business expenses, and various other credits, including mortgage interest, home energy, and electric vehicle credits.

Premier

TaxAct Premier costs $80 for a federal return and $60 per state return. It supports additional income types such as capital gains from stock sales, rental property income, cryptocurrency transactions, and income from foreign bank accounts. If you have investment income or sold cryptocurrency, this tier is the right choice for you.

Self-Employed

The Self-Employed tier is priced at $100 for a federal return and $60 per state return. It is designed for freelancers, gig workers, small business owners, and farmers. This tier includes features for reporting business expenses, calculating home office deductions, and managing self-employment taxes. It offers advanced tools to help maximize deductions for those with 1099 income or other self-employed earnings.


CUSTOMER SUPPORT

TaxAct offers a range of customer support options to help you throughout the tax filing process. If you need general assistance or technical help, you can reach their customer service team by phone at (319) 373-3600. During peak tax season, which runs from January through April, representatives are available Monday through Friday from 8:00 a.m. to 9:00 p.m. CT, and on weekends from 9:00 a.m. to 6:00 p.m. CT. Outside of this period, support hours are typically reduced to weekdays from 8:00 a.m. to 5:00 p.m. CT.

If you need personalized tax advice, TaxAct offers Xpert Assist as an add-on service. This gives you access to tax professionals, including CPAs, Enrolled Agents, and tax attorneys. With Xpert Assist, you can schedule unlimited consultations to ask specific tax questions or get a professional review of your return before filing. This service is available for an additional fee and can be added to any TaxAct package.

For quick answers or self-guided help, you can explore TaxAct’s online Help Center, which features a wide range of articles, FAQs, and guides on various tax topics and common issues. This resource is designed to help you find solutions independently.

If you prefer to look up information on your own, TaxAct’s website also has a detailed knowledge base that’s easy to search. This is especially useful if you want to learn more about specific tax forms, deductions, or credits relevant to your situation.

TaxAct’s customer service options are designed to give you the support you need, whether you’re looking for general assistance, professional tax advice, or self-help resources. This ensures that you have access to help every step of the way during your tax preparation and filing process.


BOTTOMLINE

TaxAct is an affordable and reliable tax software that offers a user-friendly interface, step-by-step guidance, and comprehensive features for a wide range of tax situations, from simple W-2 filings to complex self-employment and investment income. With competitive pricing, Max Refund and $100k Accuracy Guarantees, and the option to add Xpert Assist for professional help, it provides excellent value and peace of mind. While state filing fees and the lack of a mobile app may be drawbacks, TaxAct remains a smart choice for budget-conscious filers seeking a cost-effective yet robust tax preparation solution.