TaxAct offers a lower-cost tax software program suitable for simpler returns but can suit a variety of tax needs.  TaxAct’s affordability means it has fewer features than competitors, which is not necessarily a knock on the product.  Rather, it acts more as an acknowledgement that if this is your first time filing or if your tax situation differs greatly from year to year, you may need to do some online reading to make sure you understand how certain deductions and credits work and whether you qualify.

  • Less expensive tax software product than some more-prominent competitors
  • Offers a price-lock guarantee (you pay listed price at time you create your return, regardless of when you file)
  • Affordable tax software without many bells and whistles

TaxAct Review

TaxAct remains a good tax software for those who have simple returns and do not need added features to prepare their returns adequately.  The tax software does not represent the highest-powered product, but it manages to take care of the tax return preparation if you have a notion of what it takes to prepare and file a tax return of your own.  For those who have more complicated tax situations, TaxAct acts as a recommended option if you wish to employ a DIY approach when it comes to online research.

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    TaxAct Overview

    This TaxAct tax software review will go over the most important things you need to know if you’re considering this product.

    Founded in 1988, TaxAct operates with the goal of providing quality tax preparation products at affordable prices.  The company cites over 45 million federal tax returns prepared by individual tax filers, business owners, and tax professionals during its corporate history.

    The company offers multiple DIY products which require some legwork on your part to understand the in’s and out’s of your tax return.  Further, it provides step-by-step guidance, helpful online tools, and a maximum refund guarantee. If you want to learn a lot about the tax return preparation process through a self-guided effort, TaxAct should enter into your consideration. 

    TaxAct Pros –

    • Maximum refund protection. TaxAct guarantees your return will have 100% accuracy and will calculate your maximum refund under applicable law.  If an error in the software results in you receiving a smaller refund or having a larger tax liability than you receive using the same data on another tax preparation product, TaxAct will pay you the difference and refund the applicable software fees you paid.
    • Product variety. 5 different TaxAct products exist and cater to differing tax return complexity. The tax software can handle the most basic 1040 tax return to the most complicated, self-employed tax needs. TaxAct offers functionality across multiple package options, all intended to meet your needs.
    • Free basic federal and state return. If you file a Form 1040 with Form W-2 wage and salary income and claim the standard deduction, you file for free.  This includes federal and state tax returns. 
    • Can import data from TurboTax and H&R Block. If you have filed with TurboTax or H&R Block in the past but seek a more affordable option, TaxAct makes the switching process easier.  It does this by allowing you to import data from PDF files of returns prepared by the two biggest brands in the market.

    TaxAct Cons –

    • Not geared toward more complicated returns. Despite having a wide variety of software options, none of the products appear to come with useful educational content when preparing your return.  Succinctly, TaxAct does not provide robust assistance nor useful content for preparing your return.
    • Not an interactive user experience. TaxAct has a user-friendly interface easy for inputting tax information, though it can appear plain.  Like other tax software packages, it uses an interview Q&A approach but does not come with an interactive style seen elsewhere.

    TaxAct Review 2020, Packages and List Prices

    PackagePrices & Description

    Free edition

  • Federal: $0
  • State: $0

  • TaxAct's free federal version allows you to file a 1040 and a state return for free.

    This option works for people who don’t have complex filing situations and do not plan to claim any deductions or credits other than the standard deduction, the earned income tax credit or the child tax credit.

    Deluxe+

  • Federal: $29.95
  • State: $39.95 (per state)

  • The Deluxe+ package allows for W-2 income, itemized deductions, homeowner deductions, student loan interest, HSAs, adoption credits and dependents. If you are a small business owner, have rental income, or investment gains/losses, you will need to purchase the top of the line Premier+ version. Also comes with tax specialist phone support.

    Premier+

  • Federal: $39.95
  • State: $39.95 (per state)

  • Everything in Deluxe+ plus investment gains and losses (and income), rental properties, and prioritized support (including screen sharing).

    Self-Employed+

  • Federal: $74.95
  • State: $49.95 (per state)

  • Provides all functionality of the Premier+ version plus added deduction help for business owners, self-employed individuals, and freelancers. Can calculate depreciation and also comes with year-round planning resources.
    Prices listed represent retail prices advertised at time of review. Prices are subject to change at any time and without notice. To see the latest pricing available, please click through to one of the links and visit the TaxAct page to learn more.

    $100k/100% Accuracy Guarantee

    A nice feature offered by the company is the $100k/100% Accuracy Guarantee.  This offering guarantees tax return accuracy and claims to result in the maximum refund possible.  If you discover their tax software does not live up to this standard, the company offers to pay any difference in your lower refund or higher tax liability, refund you the purchase price, and cover any legal or audit costs up to $100,000.

    This peace of mind should make selecting their product easier.

    Audit Defense

    In addition to the Accuracy Guarantee described above, TaxAct partners with Protection Plus, a separate company equipped to provide audit services should your return be flagged by the IRS for an audit.  

    The partnership offers a product called Protection Plus Audit Defense, which is described as a comprehensive response to any possible IRS audits you encounter. In the event your tax return elicits further scrutiny, Protection Plus covers your tax return for three years and provides assistance with both Federal and State audits to the tune of around $50 or more.

    If you receive an audit notice or inquiry from the IRS or State, Protection Plus will guide you through the process and handle all correspondence on your behalf, taking the stress out of your hands.  Protection Plus also offers assistance with denied credit, tax fraud incidents and tax debt.  This service does not automatically come with any TaxAct filing product. You will have to pay extra.

    Pay with Your Refund

    Increasingly a common feature among tax software programs, TaxAct also offers the ability to minimize upfront, out-of-pocket expenses, by granting the user the flexibility to pay for the software with your tax refund.  

    Of particular benefit, this then avoids expenses hitting your debit or credit card.  You can also deduct the cost directly from your tax refund if you opt to receive your refund via direct deposit to your bank account and if your expected refund is at least $100.

    Offers Referral Rewards  

    To incentivize you to attract more people to use their program, TaxAct offers a membership referral program.  For each person you refer who did not file with TaxAct last year, they receive a 20% discount on their TaxAct 2019 paid filing software and you will receive a $20 Amazon gift card.

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      How TaxAct Compares

      TurboTaxH&R BlockTaxActTaxSlayereFile
      Free version offered?Simple Tax Returns OnlySimple Tax Returns OnlySimple Tax Returns OnlySimple Tax Returns OnlySimple Tax Returns Only
      Other Pricing Options (1)TurboTax:
      Deluxe:
      $59.99
      Premier: $79.99
      Self-Employed: $119.99

      (+$44.99/state)

      TurboTax Live:
      Basic: $79.99
      Deluxe: $119.99
      Premier: $169.99
      Self-Employed: $199.99
      Deluxe: $49.99
      Premium: $69.99
      Self-Employed: $104.99

      (+$39.99/state)
      Deluxe+: $29.95
      Premier+: $39.95
      Self-Employed+: $74.95

      (+$39.95/state for Deluxe+;
      $49.95 for Self-Employed+)
      Classic: $17
      Premium: $37
      Self-Employed: $47

      (+$29/state)
      Deluxe: $39.95 (2)
      Premium: $49.95 (2)

      (+$28.95 for unlimited state returns)
      Import Return into Tax Software?Yes; may import PDF of return from previous softwareAllow for a W-2 photo import; can import previous year’s return information from H&R Block on all non-free versionsYes, may import last year’s tax information or third-party software information. May import PDF files of IRS forms from TurboTax and H&R BlockMay upload PDF of previous year’s return;
      pulls in data automatically if used TaxSlayer previous year
      No
      Service & Support24/7 live supportPhone and live chat; in-person assistance at branch networkEmail or phoneEmail or phone, FAQs, video tutorials, definitions of key termsEmail
      Audit AssistanceProvides basic audit support for all returns and personalized audit assessment with PremierPeace of Mind®, In-person audit supportAudit Defense servicesAudit protection included in Premium and Ultimate plansNone displayed
      (1) Prices subject to change; prices listed represent full-retail cost.
      (2) Discounted prices shown at time of review were $29.95, and $39.95, respectively.

      The Bottom Line

      TaxAct offers a variety of plans, each targeting slightly different financial situations from the simple to complex.  It might not have as many features as its competitors, but the software still manages to get the job done at an affordable price.  

      The tax software should be viewed as a budget pick which comes with less support than the pricier software packages available on the market. But if you’re up to the challenge (or have a simple return), TaxAct is a cost-effective choice to consider.

      About the Site Author and Blog

      In 2018, I was winding down a stint in investor relations and found myself newly equipped with a CPA, added insight on how investors behave in markets, and a load of free time.  My job routinely required extended work hours, complex assignments, and tight deadlines.  Seeking to maintain my momentum, I wanted to chase something ambitious.

      I chose to start this financial independence blog as my next step, recognizing both the challenge and opportunity.  I launched the site with encouragement from my wife as a means to lay out our financial independence journey and connect with and help others who share the same goal.

      Disclaimer

      I have not been compensated by any of the companies listed in this post at the time of this writing.  Any recommendations made by me are my own.  Should you choose to act on them, please see my the disclaimer on my About Young and the Invested page.

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