TurboTax and H&R Block aren't your only options when it comes to preparing your tax returns. Among the alternatives is TaxAct, which historically has offered a more value-priced if less-refined product than its better-known competitors.
But, judging by this year's edition, TaxAct has stepped up its game with a comprehensive spread of web-based services to cover a variety of tax-filing situations, including some not directly addressed by either TurboTax or H&R Block.
TaxAct requires more up-front familiarity with what forms you need to do your taxes, but it also offers support for a wider breadth of tax situations. And it does so at reasonable prices, and with a flowing, easy-to-use interface.
Tax Act has six core products in its online Federal portfolio, with another six in its State portfolio. Prices scale from free to $77.95. You have to pay for state returns separately.
The primary step-ups from TaxAct's free version closely mirror what TurboTax and H&R Block, but at lower prices, without promotional discounts: TaxAct Basic+ ($14.95), Deluxe+ ($47.95), Premier+ ($57.95), TaxAct Self-Employed+ ($77.95). At first blush, those prices look to parallel TurboTax's standard product, but the stratifications of what's included at the different levels is a little more muddied at the low end with the addition of the Basic+ tier.
Furthermore, TaxAct distinguishes itself by having TaxAct Estates & Trusts (Form 1041) ($69.95) for handling filing a return for an estate or trust. And it has TaxAct Online 2018 Tax-Exempt Organizations ($69.95) for those who run an organization subject to sections 501(a), 527 and 4947(1)(1).
In addition to these products, TaxAct specifies another three business-specific $69.95 options, built around whether you have a Partnership/Form 1065, a C Corporation (Form 1120) or an S Corporation (Form 1120S). Each of these options has a downloadable option, as well as a bundle option that, while confusing, can potentially can save you money if you need multiple tax forms. For example, the 1065 Bundle ($200) includes TaxAct Business Federal and State, TaxAct Self-Employed (1040) Federal and State, plus one free e-file for Federal and State 1065, and five free 1040 Federal e-files.
Furthermore, TaxAct Download has four tiers of downloadable software product, for those who prefer to keep their data locally: Basic ($24.95), Deluxe ($87.90), Premier ($97.90) and Self-Employed ($117.90). The download products are Windows-only, and include one state e-file.
State tax filing costs $19.99 per state with the free and Basic+ TaxAct services. State filing costs $39.99 for all other products, unless you're buying one of the home and business bundles or you've downloaded TaxAct. One state e-file is included free in those scenarios.
As with other tax packages, the amount you spend for TaxAct will determine the full swath of features. For example, the free product includes access to multiple tax forms, more than you get from rival services. But TaxAct's free version lacks basic interest income, which comes with TurboTax's free product.
TaxAct's step-up Basic+ version includes an additional Child Tax Credit. The Deluxe+ adds access to a litany of additional forms, plus support for Schedule A itemized real-estate taxes and mortgage deductions, and Schedule SE self-employment taxes. The Premier+ tier adds the widest general support, including interest income and ordinary dividends, capital gains and losses, and supplemental income and losses.
The Self-Employed+ Edition provides tools for those who are freelancers, contractors or own small business; these tools include the TaxAct Deduction Maximizer for helping you find potential deductions, and year-round tax support for filing quarterly taxes.
TaxAct provides online support in the form of searchable resources on tax terms and guidance for filing your return. There is also "taxpayer support" via non-toll-free phone and email for 12 hours a day on weekdays, 8 hours on Saturdays and 7 hours on Sundays in the lead-up to the April 15 tax-filing deadline. Phone support is available 13 hours on weekdays thereafter. (A disclaimer on TaxAct's website stresses that it will offer technical help, but won't give specific tax advice.) This support is to answer questions about the product, but it is not designed to provide any tax guidance, as is available via H&R Block and TurboTax.
While TaxAct lacks interactive chat or screenshare-style support found in products from H&R Block and TurboTax, the service is well-stocked with online resources to help you through the tax-filing process.
Throughout the experience, you'll have options for guided data entry; for accessing links to resources and explanations on TaxAct's website; and options for accessing the TaxTutor Guidance that's part of TaxAct’s pop-up Answer Center. Ever present in the help pane were links to other TaxAct resources like the Donation Assistant, Stock Assistant, Forms Assistant, Topics Assistant and calculators.
Ease of Use
Getting started with TaxAct is easy: Pick a product and sign up by entering your email address, waiting for an account verification code to be sent to you, and choosing your username and password; you also supply a cellphone number for an additional layer of verification. Finally, after setting up security answers, you get the option of adding a security PIN.
Once we began the 2018 Tax Return, we were prompted through a series of steps to enter data. We liked TaxAct's clean interface, with a left-hand navigation pane, a right-hand help pane with search bar, and a central main screen that uses distinctive fonts and graphics to make the pages compelling and easy to read. We could follow the prescribed order of topics for completing the Federal return, or choose to jump around by picking something different from the left navigation pane.
TaxAct will prompt to import a PDF of your 2017 return, including support for returns prepared by TurboTax and H&R Block (a step we skipped). You can then enter personal information, including whether there's a dependent to claim, marital status and "life events," including home ownership, qualified health care and core types of income. If you're unsure what something refers to or what to select, simply click on the information icon to the right of each entry. You'll get a pop-up overlay describing what something means.
After the basics were entered, we moved on to the main event: the Federal return. TaxAct has a convenient checklist of documents on its website to make sure you have everything on hand to do your return. The service provides step-by-step guidance to walk you through picking the types of income. Once you know what you need to enter, you have three methods to do so — an electronic import, manual entry (in a perfect digital replica of the 1099-INT form) or using guided fields to input specific data.
If, during that process, you try to enter something that the TaxAct version you started with doesn't support, you'll get a friendly notice to upgrade, as we experienced when we tried to add freelance business income. When we upgraded, the product name in TaxAct's left navigation pane changed to reflect the upgrade.
We continued to move through the process of completing our taxes, navigating each section of the Federal form in sequence: Deductions, Credits, Taxes, Miscellaneous. Each section was clearly presented and business-like in its approach, with friendly language that lacks the cloying tone of some other services.
If you're someone who knows and understands your taxes, you'll appreciate the ability to just enter data directly on replicated forms, and to navigate options that use the familiar tax terms and forms. If you're not as well-versed in the tax lingo, TaxAct's design is neither foreboding nor off-putting: You'll still do fine navigating the service, particularly through the guided sections, and you may even learn a thing or two.
With online products that cover a variety of tax situations and a simple, elegant presentation, TaxAct impresses across the board. Interactive support isn't as strong as what TurboTax and H&R Block provide; you also don't get the option to have a tax professional review your return, another service TaxAct's rivals offer.
Still, if you want to dive into preparing your taxes and don't require much in the way of help or handholding, TaxAct is a good, lower-cost option. Its many versions will be particularly inviting to people with more complex tax needs.