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Taxes | Versus

FreeTaxUSA vs TaxAct in 2023

Published August 14, 2023

Published Aug 14, 2023

Tim Yoder, Ph.D., CPA

REVIEWED BY:
Tim Yoder, Ph.D., CPA

Danielle Bauter

WRITTEN BY:
Danielle Bauter

Table of Contents

When we compared FreeTaxUSA vs TaxAct, we found that TaxAct has the overall edge given its mobile app and the ability to file business returns. However, before choosing between the two, it is important to assess your tax situation and the features that are most important to you.

If you are self-employed or need to file an individual tax return no matter your tax situation, FreeTaxUSA may be a good fit for you because of its free federal and low-cost state filing. Meanwhile, limited liability companies (LLCs) and S corporations (S-corps) seeking to file their business taxes online are suited better for TaxAct.

FreeTaxUSA vs TaxAct At-a-Glance Comparison

FreeTaxUSA logo.
TaxAxt logo.
Best For
Self-employed business owners wanting free federal filing and low-cost state filing
LLCs and S-corps wanting to file their business taxes online
Pricing
  • $0 for federal returns
  • $14.99 per state return
  • $0 to $139.90 for federal returns
  • $39.95 to $54.95 per state return
Schedule C Business Income & Loss
✓
✓
Data Import
✓
✓
Audit Guidance and/or Defense
✕
✓
Deduction Finder
✓
✓
Tax Pro Assistance with Business Returns
✕
✕
S-corp & Partnership Returns
✕
✓
Average User Review Score on Third-party Sites
3.73 out of 5
 4.03
For More Information

When To Use

  • Self-employed individuals seeking free federal filing: We selected FreeTaxUSA as one of our top business tax software, specifically for freelancers because of its low cost. You’ll be able to access all major tax forms and more than 350 deductions and credits. This is in contrast to TaxAct, which only offers free return filing for basic Form 1040 filers, not self-employed individuals needing to file a Schedule C.
  • Rental property owners or investors who want to file a free federal tax return: FreeTaxUSA allows you to file a federal tax return for free, even if you own rental property or have investments. It is ideal for do-it-yourself (DIY) users who are looking for free software that can handle complex returns.
  • Taxpayers filing returns in multiple states: If you need to file multiple state returns, FreeTaxUSA is a good solution. At only $14.99 per state, the savings add up when you compare it to TaxAct’s $54.95 fee per state tax return.

Visit FreeTaxUSA

  • Businesses that need to file forms 1120, 1120S, or 1065: If you have an S-corp, C-corp, or partnership, TaxAct will let you prepare and file forms 1120, 1120S, and 1065 online. This feature is unavailable with FreeTaxUSA.
  • Schedule C businesses seeking unlimited one-on-one tax assistance: TaxAct offers Xpert Assist, which is available with all price levels and gives you unlimited access to certified public accountants (CPAs), enrolled agents (EAs), and other tax experts who can answer your questions and provide guidance as to how to navigate your tax situation. FreeTaxUSA offers tax assistance for Schedule C filers at a fee of $49.99.
  • Taxpayers who want tax software with a mobile app: If you work remotely often, tax software that also has a mobile app can be especially useful. FreeTaxUSA lacks a mobile app, but TaxAct’s app is very capable, with the ability to perform many of the same features as the online software.

Visit TaxAct

  • Expats looking for tax services: While neither FreeTaxUSA nor TaxAct support tax filing for expats, H&R Block does offer this feature. You have the option of DIY or assisted tax services for US citizens and green card holders needing to file US expat taxes each year, and H&R Block’s online software will identify expat-specific tax benefits. Our H&R Block review provides more information about the provider’s features.
  • Schedule C businesses that require free tax advice: While both FreeTaxUSA and TaxAct offer assisted filing, they are both expensive compared to TaxSlayer. It is ideal for Schedule C businesses seeking free advice because it lets you handle complex self-employed tax situations at a low cost, which includes pro advice. Free email and phone support are also included. Read our review of TaxSlayer to determine if the provider fits the bill.
  • Taxpayers seeking full-service filing: Neither FreeTaxUSA nor TaxAct provide full-service filing, so we recommend TurboTax. You’ll meet with a tax specialist on a video call before they begin work, and then again to review your return before filing. Our TurboTax review offers more information on the provider.

FreeTaxUSA vs TaxAct: Pricing

Tax Return
FreeTaxUSA
TaxAct
Form 1040 Only
Free Edition
$0 Federal
$14.99 per State
Free
$0 Federal
$39.95 per State
Form 1040 With Schedules 1 - 3
Free Edition
$0 Federal
$14.99 per State
Deluxe
$50.95 Federal
$54.95 per State
Form 1040 With Rental Property, Investments, or Cryptocurrency
Free Edition
$0 Federal
$14.99 per State
Premier
$74.95 Federal
$54.95 per State
Form 1040 With Self-Employed Income
Free Edition
$0 Federal
$14.99 per State
Self-Employed
$99.95 Federal
$54.95 per State
Business Returns: Form 1120, 1120S, or 1065
N/A
$124.95 Federal
$54.95 per State
Business Return: Form 990: Tax-Exempt Organizations
N/A
$124.95 Federal
$54.95 per State
For More Information
Tax Return
FreeTaxUSA
TaxAct
Form 1040 Only
N/A
Basic
$44.95 Federal
$60 per State
(includes 5 Federal e-files)
Form 1040 With Schedules 1 - 3
N/A
Basic
$44.95 Federal
$60 per State
(includes 5 Federal e-files)
Form 1040 With Rental Property, Investments, or Cryptocurrency
N/A
Premier
$149.95 Federal
$60 per State
(includes 5 Federal e-files plus 1 State return)
Form 1040 With Self-Employed Income
N/A
Self-Employed
$159.95 Federal
$60 per State
(includes 5 Federal e-files plus 1 State return)
Business Returns: Form 1120, 1120S, or 1065
N/A
$124.95 Federal
$54.95 per State
Business Return: Form 990: Tax-Exempt Organizations
N/A
$124.95 Federal
$54.95 per State
For More Information
Tax Return
FreeTaxUSA
TaxAct
Form 1040 Only
$49.99 for access to a CPA or EA
$39.95 Federal
$39.95 per State

Form 1040 With Schedules 1 - 3
$49.99 for access to a CPA or EA
$90.90 Federal
$54.95 per State

Form 1040 With Rental Property, Investments, or Cryptocurrency
$49.99 for access to a CPA or EA
$114.90 Federal
$54.95 per State

Form 1040 With Self-Employed Income
$49.99 for access to a CPA or EA
$139.90 Federal
$54.95 per State

Business Returns: Form 1120, 1120S, or 1065
N/A
Tax pro assistance unavailable with business returns
Business Return: Form 990: Tax-Exempt Organizations
N/A
Tax pro assistance unavailable with tax-exempt returns
For More Information

There are a couple of major differences between FreeTaxUSA vs TaxAct, including the fact that FreeTaxUSA doesn’t support business returns for C corporations (C-corps), S-corps, and partnerships. TaxAct also offers free federal filing for taxpayers who file Form 1040.

However, while TaxAct supports DIY filing of business returns, it doesn’t provide assisted or full-service filing for business returns. FreeTaxUSA also offers free federal filing for taxpayers that need to file Form 1040, including rental property owners and investors.

TaxAct offers a choice of online or desktop software, while FreeTaxUSA is only available online. If you elect to use TaxAct’s desktop software, you’ll have access to five federal e-files, which is useful if you have to file multiple returns. Neither provides full-service tax preparation nor filing services.

FreeTaxUSA vs TaxAct: Live Assistance

FreeTaxUSA
TaxAct
Communication Method
Email or live chat; Pro Support subscribers can schedule a virtual meeting
Phone, email, and live chat
Qualifications of Professionals
 CPAs, EAs, or tax specialists
CPAs, EAs, or tax specialists
Tax Pro Assistance for Individual Returns
✓
✓
Tax Pro Assistance for Business Returns
✕
✕

While FreeTaxUSA doesn’t provide tax pro assistance with business returns or full-service preparation and filing, users that elect for Pro Support can schedule a virtual meeting. This is a feature that TaxAct lacks, although you can communicate through email, live chat, or phone.

FreeTaxUSA vs TaxAct: Helpful Tools

FreeTaxUSA
TaxAct
Deduction Maximizer
✓
✓
Amended Returns
✓
✓
Prior Year Return Filing
✓
✓
Audit Support
Available with Deluxe upgrade
✓
Tax Calculator
✕
✓
Import W-2s & 1099s
✕
✓
Audit Defense
✕
Additional fee
Cryptocurrency Support
✕
✕

TaxAct offers more helpful tools than FreeTaxUSA, including a tax calculator, the ability to import W-2s and 1099s, and audit defense for an additional fee. Both provide a deduction maximizer, the ability to file amended returns, and prior year return filing. One feature they both lack is support for cryptocurrency transactions.

FreeTaxUSA vs TaxAct: Mobile App

FreeTaxUSA App
TaxAct Express App
Availability
N/A
iOS and Android
Products Supported
N/A
Free, Deluxe, Premier, and Self-Employed
Talk Live with Tax Specialist
N/A
✓
E-File Return
N/A
✓
Scan and Upload W-2
N/A
✓
IRS Refund Tracking
N/A
✓
View/Print/Save Return as PDF
N/A
✓

In the battle between TaxAct vs FreeTaxUSA in terms of mobile app, TaxAct clearly wins. The TaxAct Express app lets you e-file your federal and state tax returns on any mobile device. Its features include free federal extension filing, IRS refund tracking, and W-2 capture.

If you have any questions, you’ll receive enhanced support from a tax specialist with live chat. All online products are supported, which includes Free, Deluxe, Premier, and Self-Employed. What’s more, TaxAct allows you to switch from the app to the desktop and pick up right where you left off.

FreeTaxUSA vs TaxAct: Customer Service & Ease of Use

FreeTaxUSA
TaxAct
User Interface (UI)
Easy-to-use
Intuitive
Support Channels
Email or live chat; Pro Support subscribers can schedule a virtual meeting
Phone, email, and live chat
Expert Help Offered
✓
✓
Additional Services
Free prior year returns, and tax extensions
Deduction maximizer, audit support, and tax calculator

FreeTaxUSA’s interface is clean and easy to use, and once you log in, you’ll be directed to a page that allows you to set up your account information. Its navigation tabs are user-friendly, and they allow you to jump to sections of the site such as income, deductions and credits, and miscellaneous topics. It will prompt you to answer a few questions and help you determine whether you qualify for certain credits or deductions. It will also calculate your estimated tax refund or amount due automatically.

While the platform lacks phone support, you can get in touch via email or search for topics on its Customer Support page. If you upgrade to the Deluxe edition for $49.95, you’ll receive access to its live chat feature.

Image of FreeTaxUSA's Taxpayer Information page

FreeTaxUSA Dashboard

Meanwhile, TaxAct also has a clean UI that is easy to navigate, and it is designed in an interview format which is helpful for novice users. You have the choice of guided or unguided navigation, making it easy to enter your information. You can access all the sections with the left navigation bar and a quick summary of each section lets you catch data entry errors. You can also easily import your tax forms, a feature that FreeTaxUSA lacks.

TaxAct provides account and technical support via phone, email, and live chat for all of its products and an online knowledge base that provides answers to support issues. If you sign up for Xpert Assist, which is available for an additional fee, you get access to unlimited screen sharing with a tax expert. This service is available on-demand, and in some states, you can schedule a call with one of TaxAct’s tax professionals.

Image of TaxAct's dashboard, with options to transfer, fill in, or file your tax return

TaxAct dashboard

TaxAct vs FreeTaxUSA: User Reviews

Both FreeTaxUSA and TaxAct scored high with users. Those who left FreeTaxUSA reviews said that they like that the software is free for individual filers with complex tax situations and Schedule C businesses. They also appreciate its ease of use and low price for filing state income tax returns. The software’s noteworthy limitation is that it doesn’t support business tax returns, including Forms 1120, 1120S, and 1065.

FreeTaxUSA earned the following average scores on popular review sites:

  • Trustpilot1: 3.4 out of 5 based on about 50 reviews
  • SuperMoney2: 3.6 out of 5 based on around 20 reviews
  • Best Company3: 4.2 out of 5 based on about 90 reviews

Meanwhile, TaxAct users appreciate that you can file business returns either online or through its desktop software. Some also commended the solution’s useful tools, such as data import, a tax calculator, and a mobile app. One of its drawbacks is that it lacks full-service filing for personal and business tax returns.

TaxAct earned the following average scores on popular review sites:

  • G24: 3.7 out of 5 based on about 10 reviews
  • GetApp5: 4.7 out of 5 based on around 40 reviews
  • Consumer Affairs6: 3.2 out of 5 based on about 850 reviews

Frequently Asked Questions (FAQs)

You can prepare and file an individual return for free. This includes various tax situations, like rental income and investments and self-employed individuals who need to file a Schedule C. If your adjusted gross income is less than $46,000, then state filing is free. Otherwise, it costs $14.99 to file your state tax return, which is significantly less than what most tax software providers charge.

Yes, TaxAct will refund your software costs and the difference of a higher tax liability or lower refund in the event of an error caused by its team.

Yes, FreeTaxUSA offers free federal filing for prior-year returns and $17.99 for state filing. Online filing is unavailable—you must mail your tax return.

Yes, TaxAct allows for DIY online filing of Forms 1120, 1120S, and 1065.

Bottom Line

TaxAct is an excellent choice for small business owners seeking an online platform with a competitive price point, while FreeTaxUSA is a great option for self-employed individuals and freelancers seeking an inexpensive solution to filing their personal income tax returns. Both have many features in common, but FreeTaxUSA lacks a mobile app and the ability to file business returns.

User review references:

1 Trustpilot | FreeTaxUSA
2 SuperMoney | FreeTaxUSA
3 Best Company | FreeTaxUSA
4G2 | TaxAct
5GetApp | TaxAct
6Consumer Affairs | TaxAct

About the Author

Danielle Bauter

Find Danielle OnLinkedIn

Danielle Bauter

Danielle Bauter is a writer for the Accounting division of Fit Small Business. She has owned Check Yourself, a bookkeeping and payroll service that specializes in small business, for over twenty years. She holds a Bachelor's degree from UCLA and has served on the Board of the National Association of Women Business Owners. She also regularly writes about travel, food, and books for various lifestyle publications.