10-second breakdown:
Affordable. Friendly. Great software. TaxAct is highly rated by it’s users and drive to provide great tax prep that won’t break the bank.
The good:
The price is the lowest among comporable software products. At almost half the fee of the largest names in the industry, you really have to look at TaxAct if you’re on a budget. Many of the same abilities and functions are included in their plans, they just cost less.
Early Alerts come toward the end of each section to highlight problems before you think you’re ready to file. A feature that will save a lot of headaches and potentially problems with the IRS.
There are some awesome online learning resources available from TaxAct to help make you a pro at your returns.
The bad:
This software doesn’t cover as many potential deductions as some of the other guys, but the average return of users is often the same.
The interface is useful, but lacking the simplicity and pizazz of other tools.
How it works:
TaxAct is on a mission to provide affordable digital tax prep solutions and by their customer satisfaction rating and it would seem they are accomplishing their goals. No matter what tax situation you find yourself in at the end of the year, TaxAct has the cheapest solution to help you file. If you can find something cheaper, there is a price matching program that will get you TaxAct for the same price as the competitor you found.
There are four different versions for individuals and several versions for businesses that aren’t sole proprietorships or single-member LLC’s. Let’s go over each of them briefly.
Free: This version of the software is a stripped down straightforward version that will help you file your 1040EZ/1040A in no time flat. Just plug in your income, take your standard deduction and file you free federal and state returns. Easy peasy.
Basic: With the basic version, you’ll get the import options for your tax documents. While it isn’t much more robust than the free, it’s incredibly affordable and comes with unlimited phone support to help you through your return.
Plus: This level is really where you can see a benefit. The “Plus” version includes over 300 potential reduction checks to ensure you’re keeping the right amount of your money. You can also take care of investment and rental property income with this version.
Premium: If you’re self-employed or own a business that is a sole proprietorship or single member LLC, this is the version for you. It will help you find additional deductions for your business expenses in addition to the others in Plus.
Business: For corporations and multi-owner businesses there are the business options. There are a few tiers, but unless you have multiple people doing your taxes the first one will be enough for you.
Importing your W2’s, 1099’s and previous tax returns is easy to do if they are available by your employer digitally. If you have the basic or free versions, the process is going to be a few clicks and entering in your health care information before you’re ready to send (either digitally or through the mail).
In other versions, the software will begin to prompt you with questions and entry forms to help you find the deductions that could save you money and get a bigger refund. While it’s not as enjoyable as TurboTax and doesn’t have as many potential deductions as H&R Block, the average return is the same and TaxAct gets the job done very well. If you have some unorthodox deductions it may be a pass, but for the most part the 300+ prompts will take care of the average tax payer’s situation.
The process is step by step, guaranteed to be 100% accurate, and promises to get you the maximum return quickly (if you e-file). In addition to importing income and tax returns, there are several integrations that allow users to automatically ship over details for capital gains, stock data, or other income right into the software saving a ton of time.
Speaking of filing. Once all of your information is in there, it will be time to choose how to send it in to the IRS. There will be options to save your return, print it out, and e-file. One of the issues with TaxAct is that none of their versions come with a state tax filing included in the price and will take an additional fee to e-file. However, if you factor in the amount that you save in the beginning, most will still be coming out ahead of the game. The amount to file your state returns is also considerably less than other services (seriously, like less than half) so it may not be a loss at all.
Sidenote: Printing out your returns is always a good idea. Make sure you save a version on your computer that can be opened with another program, like a PDF, so you won’t need the software anymore after filing.
Email and phone support are included in all the paid versions (email only on free). The support and overall customer satisfaction delivered by this company makes it a winner to many of its users. TaxAct proudly boasts a 9 out of 10 recommendation rate from anyone who chooses to file with their digital products. That number isn’t bad and can even be considered better than the competition.
For complete rankings of all online tax preparation software, go here.
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