A free lunch is a free lunch, but this one has gone stale. Second Story Software hasn't kept its product up with the times and technology. TaxAct lacks the features that we've come to expect from tax-prep programs; you can't import from personal finance programs or bring in investment and payroll data while online. Plus, even though TaxAct won't break the bank--the Standard version is free, the Deluxe is $9.95--the costs add up quickly if you intend to prep and file both federal and state returns. If your return is simple Simon easy and you need to save money, TaxAct is OK. Prepping a complex return with TaxAct, however could give you a repetitive-strain injury. Forget it.
Installing TaxAct is a breeze, but no more so than other tax-prep packages. We installed Deluxe from a CD, but we also installed the downloadable Standard version; both are equally easy. As with other tax programs, such as TurboTax and TaxCut, TaxAct doesn't trouble you with lots of configuration options, so you can jump right into the Q&A if you want.
Our early copy of TaxAct didn't automatically prompt us to update the program by visiting TaxAct's Web site--a major oversight. Such updating is crucial in tax-prep software, which can change at the last minute; you want the most recent version before tackling taxes. The final version, scheduled for release in January, will have such an updater, says TaxAct's maker, Second Story.
TaxAct 2002's home page looks identical to last year's.
TaxAct's austere interface hasn't changed in years. The Q&A interview asks questions, you enter answers, and those answers then appear in the form view in the bottom half of the window. Browser-style buttons navigate you through the Q&A screen by screen, and a slick drop-down menu called Step lets you jump with just one click from one major section, say Wages, to another, such as Retirement Income. Step even checks off those parts of the return that you've completed so that you know where you stand.
But our complaints from last year remain. TaxAct's Back button is buried in the toolbar rather than featured prominently in the Q&A display. And Step doesn't let you navigate precisely. You can't jump directly to your spouse's W-2, for instance; instead, Step takes you to the start of the Wages section, and you have to click through screens manually to get to the spot you want. Furthermore, TaxAct is still available only for Windows.
Don't look for any fancy extras in TaxAct, nor will you find the advanced technology that we now expect in tax software. The simplicity doesn't stop at the Standard version, either. Neither the Standard nor the Deluxe version let you import data from personal finance programs such as Quicken or Money, which is inexcusable, and you can import last year's return only if it was done with TaxAct, equally unforgivable. TaxAct offers absolutely no way to e-import data from brokers and payroll firms; that ability can cut out big chunks of prep time when you use TaxCut or TurboTax. TaxAct is stuck in the twentieth century; unless it wises up, it will be as useless as the telegraph.
On the plus side, TaxAct Deluxe does contain an additional 20 less frequently used forms than the 27 forms and 14 schedules found in Standard (TurboTax Deluxe doesn't reveal how many forms it provides), and it now includes an inconsistently integrated JK Lasser's Your Income Tax Guide. (We say that it is inconsistent because only some of the Q&A interview screens sport a button that opens up to advice taken from the book.) Other components found only in Deluxe include a What-if tax-scenario tool and a Joint vs. Separate (for married couples) comparison tool. Unless your return is ultrasimple, we recommend Deluxe over Standard.
Remember those data-import options that TaxAct sorely lacks? Well, their absence made preparing our return unacceptably tedious. In our test return preparation, because we couldn't import data from our personal finance program, we had to manually tally up expenses and run investment reports in Quicken or Money, then key them into TaxAct. Ugh! The too-general Step navigator also took its toll, making us march through screen after screen to get to the spot we wanted. Give yourself plenty of time to do a moderately-complex return with TaxAct; we spent nearly five hours wrapping up a return in our preview tests. We may as well have used a pen and calculator. With a supersimple return, however, you won't have to worry about endless data entry, forms, and schedules, so you may brave TaxAct if you want.
Still, if you play your cards right, TaxAct can be cheaper than any other full-fledged tax program. That is, it's cheaper if you download TaxAct Standard (called Basic last year), do a return, print it to paper, and mail it via snail mail. Unfortunately, Standard lacks important features, such as the ability to import from last year's return (found only in Deluxe) and crucial guaranteed accuracy, which can protect you from the IRS in case the program makes an error. TurboTax actually promises to pay any penalty that may ensue.
Dig deeper into TaxAct's pricing, though, and you'll wince. Sure, the program costs just $9.95 and includes one electronic filing of a federal return, with no need to send for a rebate. But add $12.95 for one state return and $7.95 to file it, and suddenly TaxAct's total--one federal return, one state, and both filed electronically--comes to nearly $31. That's almost as much as TaxCut.
No surprise, but support for the upstart TaxAct is no match for that of big boys Intuit and H&R Block. TaxAct's built-in help still stinks: it's so brief that it's almost invisible, with the exception of the places where JK Lasser helps out, and doesn't include video clips or detailed explanations of tax ramifications. Worse, TaxAct doesn't even display its onscreen help by default--you have to click a button, then it appears in a separate, distracting window. Online support consists of a searchable knowledge database and a way to e-mail for help. You can also phone for free help, which is a good deal, but it's a toll number, so you pay for the call. During tax season--January 10 through April 15--the help desk is available Monday through Friday, from 8 a.m. to 9 p.m., Saturdays 8 a.m. to 5 p.m., and Sundays 12 p.m. to 5 p.m. CT.
TaxAct's built-in help opens in a separate window, not within the program display itself.
We rang the help desk--admittedly, not during prime tax time--with a test support question and got through to a rep in just three minutes. He answered our question and gave us a workaround--not a very elegant one, but it functioned all the same.