If you’re the sort who wants to do their own taxes while remaining in control of the process and while not spending a lot of money, then you should definitely take a look at TaxAct. Available since 1998, TaxAct offers multiple versions of the software in several formats, has an easy to use interface, and may have the most affordable product on the market. Other products may be more comprehensive, but for the majority of taxpayers, this one will do nicely, and that’s why TaxAct is one of the best selling tax preparation products on the market today. Read on for more of our TaxAct review.
TaxAct Review – Pros and Cons
TaxAct has a lot going for it, starting with the ability to use it on multiple platforms. The software is available in downloadable versions for desktop computers, tablet computers, smartphones as well as an online version which can be completed with a Web browser.
As with most tax preparation software, TaxAct comes in several different versions depending on your personal needs. The company is part of the Free File Alliance, so they do offer a free version for filing your Federal tax return. Keep in mind that this version has minimal features, and isn’t at all suitable for anyone with a business, real estate, stock transactions or the like. If your filing needs are basic, the free version may work for you. Otherwise, you should consider their Deluxe version, their Ultimate Bundle edition, which includes modules for filing your state tax returns, and the Home & Business edition, which is suitable for business owners or those who have rental property. The TaxAct Express app for smartphones makes it possible to file both state and federal returns, albeit simple ones, on your telephone. TaxAct is also available in professional editions for professional preparers.
Easy importation of prior years returns – if you’ve used TaxAct before, it’s quite simple to import your returns from previous years. You can also import data from competing products, such as H&R Block Tax Software or TurboTax with just a few clicks of your mouse.
TaxAct has “mini-alerts” that will assess any section of the software that you have just completed for potential problems. You don’t have to correct them right away, but they’ll remain there until you do, making it easy for you to spot them at a later time.
Information and help are plentiful and easily available, in the form of a glossary, a knowledge base, and video tutorials. These can be a big help, especially for those who are using the software for the first time. There is also extensive help information available at the TaxAct Website.
Pricing is quite competitive, and you’ll have a hard time finding a tax preparation product that offers as much as TaxAct does at the price point they offer. While you do have the free option for your federal return, the Deluxe Federal edition is currently priced at $12.99 and the Ultimate Bundle, which includes both Federal and state returns, is priced at less than $20. That’s a nice feature, as most tax preparation software charges extra, and sometimes quite a bit more, for state returns. H&R Block’s tax software can cost up to $100 to file both Federal and state returns, making TaxAct Ultimate Bundle quite a bargain in comparison.
All in all, TaxAct is a good product, but like any software program, it isn’t perfect. If you like hands-on help or want to talk to someone in person about problems you’re experiencing with either the software or your taxes, you’ll have to look elsewhere. While TaxAct does have comprehensive online help, you’ll have to settle for static help in the form of knowledgebase articles or videos. Unlike other competing products, TaxAct does not have a live chat feature to allow you to discuss your problems in real time with a professional. They also have no retail locations where you can meet with someone in person to discuss any problems you may be having. For most users, this won’t be a big issue, but some people do require a bit of guidance, especially if they’re using the product for the first time.
Perhaps the most noticeable flaw is the lack of comprehensive tools for discovering potential tax deductions. That’s the bread and butter of tax preparation; after all, it’s the deductions that ultimately determine how much you are going to pay in taxes. Every additional deduction to which you are entitled saves you money, and while TaxAct does have some basic discovery for tax deductions, it doesn’t have the more comprehensive deduction discovery tools that are often found in competing products, which can help you find extra deductions for specific businesses, occupations or industries.
The deduction issue is a problem with almost all tax preparation software; it’s smart but it doesn’t know everything. The IRS often allows multiple ways to consider the value of certain deductions, while most prep software only considers one. What if calculating travel expenses in another way could save you more money? TaxAct won’t know that, and neither will any other product. If you knew about those things, you could provide that information and the software could act upon it accordingly.
What you need, in addition to TaxAct, is a way of keeping up with ways to maximize your deductions, legally, so that you can save all of the money on your taxes to which you are legally entitled. No tax software can do that.
TaxAct is a good product, and it’s affordable. Keep in mind, however, that what the software doesn’t know about your potential deductions could end up costing you far more money in the long run than the cost of the product itself.