While not as polished as leading tax software, TaxAct combines an exhaustive question-and-answer process for completing your tax return, combined with an impressive Answer Center providing useful information for all sorts of tax situations.
TaxAct has four levels of online tax preparation -- Free, Deluxe, Premier and Self-Employed. Each of the plans is defined by the number of included IRS forms. Filers with simple returns can use the Free plan, while those with mortgage interest or other deductions will need to upgrade to Deluxe. Investment income requires the Premier plan, and freelancers with multiple 1099 forms will need to shell out for the highest level, Self-Employed.
TaxAct covers almost all tax situations and is cheaper than the leading products, but the trade-off is less integrated support and no live chat. If you don’t need live help during your tax return, TaxAct could be a good value.
Who should use TaxAct?
Confident tax filers who want to maximize their refunds with deductions they might not have previously considered may enjoy TaxAct. When reviewing your return, TaxAct’s Deduction Maximizer tool offers customized deduction suggestions based on your personal tax situation. That said, you’ll still need a good grasp of tax rules to make necessary changes.
Those looking for a bargain alternative to TurboTax and H&R Block could give TaxAct a try, but TaxSlayer is a bit cheaper and offers a similar experience with more add-on help options.
Who shouldn’t use TaxAct?
Those who want fully free tax software should look elsewhere -- you’ll pay $40 for state returns -- and those looking for live chat support should try TurboTax, H&R Block or Cash App Taxes, which include both free federal and state returns.
Fans of advanced security features should also pass on TaxAct. It supports two-factor authentication with Google Authenticator but none of the standard MFA login features like verifying a security code with your mobile phone. TaxSlayer and Jackson Hewitt both offer much more robust security features.
TaxAct’s products and prices
TaxAct provides tax preparation software online at four different levels: Free, Deluxe, Premier and Self Employed. Each requires additional fees for state returns.
TaxAct Free’s restrictions are fairly generous compared with its competitors. You can claim the earned income tax credit, child tax credit and recovery rebate. It also supports dependents, unemployment and retirement benefits and married filing separately. You can only take the standard deduction, but you can receive education credits and take the elderly and disabled credits available in Schedule R.
TaxAct Free only lets you file a free federal tax return. Your state return will cost $40.
The Deluxe tier of TaxAct adds a long list of IRS forms, including itemized deductions (Schedule A), child and dependent care expenses, casualty and theft loss, health savings accounts, home business expenses and other credits like mortgage interest, home energy and electric vehicles.
TaxAct Premier mostly adds a range of common income types. If you have capital gains from the sale of stock or any other investment income, or you earned money from rental property, you’ll need to upgrade to TaxAct Premier. Filers who earned money from the sale of bitcoin or other cryptocurrencies will also need TaxAct’s Premier tier, as will those with investments in foreign banks.
The top tier of TaxAct is reserved for those who received self-employed income (gig workers, freelancers and small business owners) or farmers. If neither applies to you, you should move down to Premier or lower.
TaxAct products, compared
|Filers with standard deduction||Free||$0||$40|
|Those with itemized deductions like mortgage interest||Deluxe||$25||$45|
|Those with property income, stock sales or cryptocurrency||Premium||$35||$45|
|Freelancers and gig workers||Self-Employed||$65||$45|
TaxAct also offers downloadable versions of its software at different prices. This review covers TaxAct’s online software.
Like most other tax software, TaxAct uses a tried-and-true procedure of having you answer questions to complete your 2022 tax return piece by piece. You’ll enter answers by filling out blank boxes, marking check boxes or yes/no options and selecting from drop-down lists.
You can drop out of what TaxAct calls Step-by-Step Guidance by clicking on the Federal or State links in the left-hand navigation, where you can directly access specific subsections such as Income, Deductions, Credits and Taxes.
While the questionnaire process is exhaustive, it’s also exhausting. TaxAct is good at digging for deductions, but you may end up answering questions that don’t apply to your situation. Also, my step-by-step guidance was often thrown into a loop, where I was clicking Continue through a bunch of pages I had already completed.
TaxAct doesn’t allow file uploads other than your prior year’s tax return from another preparer. It includes a partial W-2 import that worked fine for me, and 1099-INT lookups depending on your financial institution. If you have multiple 1099-MISC or 1099-NEC forms, you’ll be entering them manually.
TaxAct’s help and support
TaxAct mostly succeeds in providing a large database of resource pages for DIY tax filers, even though it’s not integrated into the software itself -- Answer Center entries spawn pop-up windows. It’s not as well organized as TurboTax, nor does it have any community features such as message boards where users can post questions.
When completing your return, you’ll find a circled “i” next to some form boxes. Clicking it offers contextual help in the form of pop-ups, though some explanations are not very thorough and others merely offer, “Don’t worry, we’ll explain it later.” Closing these pop ups also sends you back to the top of your current page -- a minor but possibly frequent annoyance.
There are three additional ways to receive support: through the Help button, via Xpert Assist or by screen-sharing with a support agent.
TaxAct’s Help panel is too crowded -- an Answer Center widget at the top is the most useful. There, you can quickly search for topics or IRS forms, and contextual links provide relevant support as you complete your tax return. For example, as you’re entering dependents it will show links about newborns or Social Security numbers for your kids.
The rest of the busy Help panel includes another big link to Xpert Assist and four generic Answer Center links.
Xpert Assist is TaxAct’s expert-help feature with certified public accountants or IRS-credentialed enrolled agents. It’s currently free for all TaxAct users. Pricing may change as the April 18 tax deadline nears.
On the downside, Xpert Assist only offers phone and email help -- there’s no live chat option. Once you’re connected to an expert by phone, you can share your screen with the expert using a six-digit code provided over the phone.
I was able to eventually answer my own question of, “Where do I enter vehicle license fees?” but only by spending several minutes researching tax-help resources outside of TaxAct. In comparison, TurboTax quickly answered a tougher question -- “What’s the difference between vehicle registration and license fees, and which number do I enter on my taxes?” -- and even showed me how to find my vehicle license fees at the DMV website. A live chat feature would be a very welcome addition to TaxAct.
TaxAct’s other notable features
TaxAct includes a Maximum Refund guarantee that promises to pay the difference if you receive a greater tax refund from another provider. It also boasts a “$100K Accuracy Guarantee,” promising to cover up to $100,000 in IRS penalties, fees or “reasonable, documented audit costs” related to any calculation errors in its software.
A welcome bookmarking feature in TaxAct lets you flag any part of your tax return for review or editing later. Simply click the bookmark symbol at the top of the page to add a section to your list of saved pages accessible under “My Return” in the left-hand nav.
TaxAct users can receive their tax refunds via:
- Direct deposit in up to three bank accounts
- Free transfer to an American Express Service prepaid debit card
- Paper check in the mail
TaxAct’s preparation fees can be paid by transferring from your expected tax refund, but that process will incur an additional fee from Republic Bank, TaxAct’s financial partner. TaxAct did not provide the price of that fee at the time of this review. For reference, Republic Bank currently charges $22 as a standard fee for outgoing domestic wire transfers.
TaxAct’s online tax filing software covers all the necessary bases and provides clear direction as you progress through your tax return. While the clicking can seem endless at times, the thoroughness of the software will help maximize your tax refund. The bountiful help selection includes lots of useful information to help you file your taxes, but the lack of live support means that you’re mostly on your own.
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