TaxAct Online Review: Features & Pricing in 2022
Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor, and CPA with 25 years of experience. He brings his expertise to Fit Small Business’s accounting content.
TaxAct offers a free plan that allows you to file Form 1040 for free, plus a state return for $39.95. If you have investments, rental properties, or foreign bank accounts, you can file a federal return for $34.95, and self-employed individuals can file a federal return for $64.95. You can receive help preparing your return for an extra fee starting at $35.
What We Recommend TaxAct For
TaxAct is a popular name in the tax software industry. It’s used by small business owners, freelancers, and consultants to automate their tax return preparation and electronic filing. We selected it as the overall best small business tax software because it’s ideal for business owners that need to file both a 1040 and a separate business return. It offers multiple paid plans for taxpayers in a variety of situations and useful tools like a tax estimator and tax planner.
TaxAct also offers “Xpert Help,” which involves professional tax advice from an enrolled agent (EA), certified public accountant (CPA), or tax attorney. You can ask for help on-demand or schedule appointments during normal business hours.
TaxAct Is Especially Good For
- Businesses that need to file Forms 1120, 1120S, or 1065: In addition to Form 1040, TaxAct offers various tax filing options for partnerships, C corporations (C-corps), and S corporations (S-corps), including forms 1065, 1120, and 1120S.
- Taxpayers who want to file their federal returns for free: Qualifying taxpayers can file their federal tax returns free of charge. You’re eligible if you’re paid through W-2s or collected unemployment income and want to claim basic child tax credits and the earned income tax credit (EITC).
- Businesses that want one-on-one tax assistance: TaxAct Xpert Help connects you with CPAs or other tax experts who can help you navigate your tax situation and answer your questions. There’s no limit to the number of times that you can speak with tax experts during your filing experience.
TaxAct Is Not a Good Fit For
- Professional return preparers: If you’re a CPA or a tax professional preparing returns for multiple clients, you’ll need to use the TaxAct Professional version instead. For other choices, check our best tax software for tax preparers.
- Taxpayers who need robust tax audit support: Although it offers a self-guided Audit Assistant tool, TaxAct doesn’t offer personalized and robust audit support like H&R Block and TurboTax.
Are you looking for something different? Read our article on the best small business tax software. In this guide, we looked at a variety of solutions and narrowed down our recommendations based on the price of preparing the typical bundle of returns required by most business owners.
TaxAct Overview
| PROS | CONS |
|---|---|
| Online filing of business returns including Form 1040 (Schedule C), 1120, 1120S, and 1065 | Price includes only one return |
| Offers Xpert Help | State return fees are a bit expensive |
| Less expensive than most other tax filing programs | Limited audit support |
| Includes accuracy and maximum refund guarantees | No special cryptocurrency support |
TaxAct Pricing
TaxAct offers a free version that allows you to file a Form 1040 for free, plus a state return for $39.95. Prices for its paid online packages start at $24.95 for do-it-yourself (DIY) federal tax filing and $74.95―if it includes Xpert help―plus $44.95 per state for state filing.
Pricing & Features | Free | Deluxe | Premier | Self Employed |
|---|---|---|---|---|
Federal Return (DIY) | $0 | $24.95 | $34.95 | $64.95 |
Federal Return (With Xpert Help) | $35 | $74.95 | $94.95 | $139.95 |
State Return | $39.95 | $44.95 | $44.95 | $44.95 |
W-2 Income | ✔ | ✔ | ✔ | ✔ |
Itemized Deductions | N/A | ✔ | ✔ | ✔ |
Royalty and Schedule K-1 Income | N/A | N/A | ✔ | ✔ |
Schedule C | N/A | N/A | N/A | ✔ |
Deduction Maximizer | N/A | N/A | N/A | ✔ |
Free
The Free plan lets you file federal returns for free, but you can’t file schedules 1 to 3. It’s suitable for taxpayers with wages, dependents, college expenses, and retirement income. The package handles W-2 income, child tax credits, dependents, current students, and earned income credits, and it includes prior-year import, free account, and technical support.
Deluxe
Considered TaxAct’s most popular plan, Deluxe is best for homeowners with deductions, credits, and adjustments. It includes everything in Free, plus itemized deductions, child and dependent care, mortgage interest, real estate taxes, student loan interest, health savings accounts (HSA), and adoption credits.
Premier
If you need to report rental properties or investments, this plan is for you. It contains all of the features in Deluxe, plus advanced features like stock sales, sales of homes or other investments, rental property income, royalty and Schedule K-1 income, investment expenses, and foreign bank and financial accounts. Users also have access to prioritized support with screen sharing.
Self Employed
The Self Employed package caters to freelancers and self-employed taxpayers looking to maximize their deductions. It comes with all of the features in Premier as well as freelance income, business and farm income, personalized business deductions, depreciation calculations, and year-round planning resources.
Business Tax Returns
TaxAct also allows you to file business tax returns for sole proprietors, partnerships, C-corps, and S-corps. All products are for preparing, printing, and e-filing a single return. For sole proprietors, you can file form 1040 and Schedule C for $64.95 plus $44.95 per state return. For partnerships, C-corps, and S-corps, you can file forms 1065, 1120, and 1120S for $109.95 per return, plus $49.95 per state return.
TaxAct Features
TaxAct is a tax preparation software that offers a long list of handy tools and impressive tax guarantees to help you prepare your return and maximize your deductions easily. Below is a list of some of its top features.
Deduction Maximizer
TaxAct uses a question-and-answer format that provides you with a step-by-step guide to help you complete your returns in a way that maximizes your deductions. This tool helps self-employed individuals uncover common deductions specific to their work. Sales representatives, for instance, can uncover additional tax advantages on business travel and meals, credit card processing fees, supplies, and more.
Accuracy/Maximum Refund Guarantee
TaxAct says that its program is 100% accurate, so taxpayers can get the maximum refund. If you receive a reduced refund or increased tax liability or pay a penalty or interest because of a TaxAct error, your charges will be covered by TaxAct. The company will refund your full software costs and pay any difference in your higher tax liability or lower refund. They’ll also cover any legal or audit-related costs of up to $100,000.
Mobile App
TaxAct Express Mobile App (Source: TaxAct)
The TaxAct Express app allows you to e-file your federal and state tax returns on your tablet or smartphone. Its top features include free federal extension filing, W-2 capture, IRS refund tracking, and enhanced support with live chat. The app supports all online products: Free, Deluxe, Premier, and Self Employed. You can switch seamlessly from the app to the desktop and pick up right where you left off. It also allows you to view, print, or save your federal return as a PDF. Security is also a priority, as you can use touch ID or face ID support and a two-factor authentication security feature.
Tax Calculator
TaxAct Income Tax Calculator (Source: TaxAct)
The Tax Calculator lets you create what-if scenarios for future years in your current return. You can estimate your income and expenses for the next few years and then project changes to the information to estimate your tax liability for the current or following years.
Tools
TaxAct Loan Calculator (Source: TaxAc)
TaxAct offers various tax tools that can help in different tax situations. The Forms Assistant gives you access to all available tax forms while the Topics Assistant provides answers to various tax questions. When recording a donation, you can use its Donation Assistant to quickly find the deduction value of donated clothes, household items, and other objects. The Loan Calculator helps you to determine your monthly payments for home, auto, personal, student, and any other fixed loan type.
Data Import
Regardless of your previous tax program, TaxAct lets you import the previous year’s tax return, including those coming from TurboTax or H&R Block. However, it can only be imported as a PDF, and you can only bring over your 1040—not including all of the supporting forms and schedules. You can also import W-2s or take a photo and upload them via the mobile app, and with paid versions, you can upload 1099-B information from your broker if it’s in a spreadsheet (a CSV file).
Deduct Your Fee From Your Refund
When you e-file through TaxAct, you can elect to receive your tax refund as either a direct deposit or on a PayPower Card, and you can deduct your filing fees from the refund. The transaction is processed through TaxAct’s banking partner, Republic Bank. There’s an additional charge of $19.99 to deduct filing fees from a direct deposit or $9.99 to deduct filing fees from a PayPower Card deposit.
Customer Service and Ease of Use
As with other tax filing programs, TaxAct features user-friendly navigation and an intuitive interview process, which is helpful for new users. It offers guided and unguided navigation that makes it extremely easy for filers to enter their information. The navigation bar also provides easy access to all other sections. TaxAct allows easy import of tax forms, such as 1099s, W-2s, and 1099-NECs. Another nice feature is a quick summary of each section that allows you to catch data-entry errors.
TaxAct offers account and technical support through email, chat, and phone in all its products as well as a huge knowledge base that provides answers to frequently asked questions. Perhaps the most useful addition to TaxAct’s support offering is Xpert Help, which provides unlimited screen-sharing access to a tax expert. Help is available on-demand, and in some states, you can schedule a call with one of TaxAct’s CPAs, enrolled agents, or other tax specialists.
TaxAct Dashboard (Source: TaxAct)
TaxAct Alternatives
Best for: Filers who need inexpensive tax software for corporate and partnership returns | Best for: Freelancers and self-employed taxpayers | Best for: Freelancers looking for free software to file an individual return with Schedule C |
Business Returns From: $89.95 for federal and state | Self-employed Returns From: $170.00 for federal and state | Individual Returns From: $14.99 for state |
Bottom Line
TaxAct is a terrific choice for freelancers, sole proprietors, or small business owners looking for an online filing platform with a competitive price point that offers everything you need to get the job done. It’s less expensive than much of the competition, and it has a variety of features and guarantees that help you simplify and save on your tax filing without the full cost of hiring an accountant.
Try TaxAct for free and see how it works for you.
