TaxAct is one of the most affordable tax software options out there, and if there’s one thing we’re all looking to do around tax season, it’s to save money. While TurboTax and H&R Block may have taken silver and gold in my review of the best tax software, TaxAct came in a close third, offering an affordable solution to filing taxes – particularly if you’re self-employed.
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While it isn’t my top pick for filing your taxes, it’s still a strong option worth exploring. Let’s look into the strengths and shortcomings of TaxAct.
What distinguishes TaxAct from the competition is its variety of filing options at an affordable price. In particular, TaxAct is designed for people like me: freelancers and self-employed contractors who need a variety of filing options, but can’t afford the top-tiered software from companies like TurboTax and H&R Block.
In this regard, TaxAct shines. However, there are a few places it falls short. Namely, TaxAct lacks any sort of refund bonus or access to prior-year tax returns. Those two minor details go a long way in making tax software better.
However, as I mentioned, TaxAct is designed to be an affordable option for anyone who would prefer saving money over a sleek interface, and it accomplishes its goal. If you’re looking for an affordable way to file more complex tax returns, you’d be hard pressed to find a better option than TaxAct.
Let’s dive into the different plans that TaxAct has to offer.
Other than TurboTax Absolute Zero, which only applies to 1040A and 1040EZ forms, TaxAct Free is one of the most affordable ways to file your taxes. The one drawback is that features like importing other documents are severely limited.
Here’s what TaxAct Free has to offer:
- Helpful software to quickly find answers.
- TaxPayer, TaxAct’s email hotline. Unfortunately, this is much slower than a live chat and usually takes one business day to hear back.
- Phone support available for a one-time fee of $7.99.
TaxAct Free Price:
- Federal: Free
- State: Free
Although TaxAct Free covers most of the bases, it does have limited support and functionality, and while this isn’t a necessity, it goes a long way in making your tax season go smoothly.
TaxAct Basic offers everything from Free, plus:
- Import options for previous year’s tax returns
- Support via TaxAct Answer Center and TaxAct Support
- TaxAct Life Events helps to maximize deductions
- Improved scanning for errors or problem areas
- Federal: $9.99
- State: $9.99
TaxAct Plus doesn’t cover any more tax situations than the free version, but it does offer some helpful tools and conveniences for getting those taxes filed, specifically in maximizing deductibles and tax credit. This is TaxAct’s most popular tier of tax software.
TaxAct Plus offers everything from the previous plans, plus:
- Access to over 300 more tax deductions and credits.
- Donations Assistant to track all of your donations for tax credit
- Federal: $14.99
- State: $14.99
This bundle opens up all of the available schedules, making it perfect for any contractors or freelancers like myself. At its price, it is by far the most affordable way to pay self employment taxes amongst its competition.
TaxAct Premium offers everything from the previous plans, plus:
- Schedule C and Schedule F support, necessary for self employment and more complicated tax situation
- Streamlined depreciation tool
- Capital gains income and losses reporting
- Federal: $19.99
- State: $14.99
What does TaxAct do right?
- Extremely affordable compared to the competition.
- Surprisingly comprehensive free tier.
- DocVault app for keeping track of paperwork.
- Price Guarantee to ensure customers get the lowest available prices.
- Useful editing functions on importing.
- Handy stock assistance tool.
- Adequate alert system for problems.
What does TaxAct do wrong?
- Lacking in deduction detection.
- Poor support system on free tier.
- No direct access to prior-year returns.
- No refund bonus offered.
- Only supports imports from TurboTax and H&R Block (sorry, TaxSlayer users).
TaxAct is software designed with a purpose — as an affordable option for filing even the most complicated tax returns. While the software itself isn’t as slick as TurboTax and the customer service isn’t as helpful as H&R Block’s, TaxAct succeeds in its mission.
If you’re looking for an affordable way to file your taxes this April, especially if you have a more complicated tax situation, TaxAct should be at the top of your list.
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