Financially, TaxAct is a total steal. Its no-nonsense design will be a turnoff for some, but the low cost and free email and phone support more than make up for it.
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Because major tax software providers often have several packages to fit varying complexities of returns, we spend hours reading the fine print and running each through a rubric that’s weighted according to the most important aspects for most tax filers.
This is one of TaxAct’s biggest selling points — its products are in some cases less than half the cost of competing packages from bigger names like TurboTax and H&R Block. That’s no small thing, especially for people who need advanced tax software, which can run $100 or more elsewhere when you factor in the price of preparing a state return. TaxAct also has a price-lock guarantee, which means you pay the listed price when you start your return rather than when you finish. This might be helpful because, in our experience, tax software prices tend to go up about a month before the filing deadline.
If you have a simple tax situation, TaxAct has a free version that is actually free. (Some providers’ “free” versions do only federal returns for free, meaning you still have to pay to file your state return.) However, the free version is available only to people who qualify to file the 1040EZ or 1040A; folks who have to file a regular 1040 will need to get one of the paid versions. The free version does charge $5 to import last year’s TaxAct return (this is included for paid versions).
TaxAct also offers desktop software, but it’s not part of our review. Desktop means your return doesn’t reside in the cloud; it stays on your computer while you work on it. People who have used the desktop version before will see a cosmetic difference compared with the cloud, but the steps are similar — and, of course, the math is the same.
TaxAct’s interface isn’t fancy, but it works. It has all the basics, such as importing last year’s returns, a W-2 import, a donation assistant and some planning tools and calculators. And because the software is online, you can log in from other devices if you’re working on your return here and there.
TaxAct has a free mobile app, but it’s basic and meant only for users with the simplest of tax situations. For example, tell it you’re married, filing jointly and have kids, and it tells you you’ll need to move to an online product instead.
Like many other tax packages, help is available throughout the preparation process, though higher-priced competitors do seem to have more robust in-line help. As with most software packages, a banner running across the top keeps track of where you are in the process.
TaxAct has an online knowledge base that users can search for answers about specific tax issues. It’s not as robust as some competitors’ offerings, but free phone and email support may compensate for that.
Free tax help via phone is a rare find, especially for software at this price point. Phone support is weekdays during Central Standard Time business hours only, which could be an issue if you’re trying to do your taxes in the evenings or on weekends (the hours are expanded during tax season, however).
If you’re using the free version and find you’d like more help, it’s easy to upgrade to Deluxe in the middle of the process.
Getting audited is scary, so it’s important to know what kind of support you’re getting from your tax software. First, be sure you know the difference between “support” and “defense.” With most providers, audit support (or “assistance”) typically means guidance about what to expect and how to prepare — that’s it. Audit defense, on the other hand, gets you full representation before the IRS from a tax professional.
TaxAct’s audit support consists of a FAQ page on its website. But customers can buy “audit and inquiry assistance services” from a partner company called Protection Plus. Coverage includes three years of audit services for this year’s return, and TaxAct says it includes “comprehensive response and resolution strategy, IRS and state correspondence, help with denied credits, and tax debt and tax fraud assistance.” That service runs $50 for Premium users and $40 for Plus and Free filers.
No matter how you file, you can choose to receive your refund via direct deposit to a bank account (the fastest option) or in the form of a paper check. Other options include applying the refund to next year’s taxes or directing the IRS to buy U.S. Savings Bonds with your refund.
TaxAct can also put your refund on an American Express Serve prepaid debit card.
If you’re using a paid version, you have the option of paying for the software out of your refund (if you’re getting one). But beware: There’s a $20 charge to do that.
Across the board, TaxAct’s offerings are dramatically less expensive than similar products from competing providers. That can be a huge score — especially for filers who don’t care about a fancy product and aren’t worried about getting audited but want to be able to talk to a human if necessary.
Tina Orem is a staff writer at NerdWallet, a personal finance website. Email: email@example.com.
Updated Jan. 17, 2017