TaxAct vs TurboTax: Price, Features, & What’s Best

TaxAct and TurboTax are tax preparation software products that are good options for people to prepare their own tax returns. TurboTax has more features and provides the option for review by a licensed tax professional. TaxAct is less expensive and provides a good set of features for most people who prepare returns.

When to Use TurboTax

TurboTax offers more robust features for importing data and annual reporting for employees and contractors. If you are a sole proprietor and you need to prepare W-2 and 1099 forms, choose TurboTax. TurboTax Home and Business allows you to file your personal and business taxes within the same program as well as complete payroll forms to supply to employees and 1099 contractors you paid during the year.

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When to Use TaxAct

TaxAct offers the best value for preparing personal tax returns due to its starting price of $9.95 for paid plans, which is a lot less than TurboTax paid plans that start at $49.99. If you are a solopreneur, C-corp, S-corp, or LLC with no employees or contractors, choose TaxAct. You can file both your personal and business tax returns within the same program for as little as $49.95 plus state filing fees.

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When to Use an Alternative Tax Preparation Software

If you are an S-corp, C-corp, LLC, or nonprofit organization, you may want to consider using H&R Block. Unlike TurboTax Home and Business edition, which only works for sole proprietors, H&R Block is ideal for all business entities. Plus, you can file both personal and business tax returns with H&R Block for $89.95 versus $119.99 for TurboTax. Additional fees for state tax returns will apply. Check out the best small business tax software guide for more information about H&R Block.

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TaxAct vs TurboTax at a Glance

How We Evaluated TaxAct vs TurboTax

We evaluated TaxAct and TurboTax based on the features important for individuals with a wide variety of financial situations. Can the software prepare the tax forms and schedules commonly needed? Can the software import data? Does the software help people uncover deductions and tax credits they might otherwise overlook? Does the software check for errors?

The key factors used to evaluate TaxAct and TurboTax include:

• Support for Personal Tax Forms: Includes tax forms to file both personal and business income taxes if you need it.
• Data Import: Data from key documents like W-2 forms, financial statements, and your accounting software can be imported into the tax software.
• Deduction Finder: Has the ability to find tax deductions and ensures that you don’t miss any tax deductions that you qualify for.
• Error Check: Includes a built-in feature that will check for errors and missing information before you file your return.
• Ease of Use: It is easy to set up and use the software, no Enrolled Agent (EA) or CPA required.
• Customer Support and Help Resources: Easy access to live customer support or self-help tools, such as a knowledge database when you have a question or need help.

When considering TaxAct versus TurboTax, we recommend TurboTax as we believe it meets the needs of most taxpayers. This is because TurboTax has more tools for importing data as well as robust error-checking features. In addition, TurboTax has an innovative TurboTax Live option, where a licensed tax professional will review your tax return and answer your questions throughout the year.

TaxAct vs TurboTax: Pricing & Features

Both TurboTax and TaxAct offer four products for taxpayers who do not need to file business taxes. TaxAct personal plans run between $0 and $34.95, and TurboTax personal runs between $0 and $79.99. TaxAct Business plans start at $49.95 versus $119.99 for TurboTax Business plans. Overall, the primary difference between TurboTax and TaxAct plans is that TurboTax allows you to file up to five federal tax returns versus one federal tax return with TaxAct.

TurboTax Pricing & Features

TurboTax offers four personal tax plans, one self-employed plan, and two business plans. The personal plans run between $0 and $79.99, and the business tax plans start at $119.99, versus $49.95 for TaxAct business plans. Additional state returns are an additional $44.99 per return for TurboTax versus $39.95 for TaxAct. However, the desktop versions of TurboTax and TaxAct include one state tax return.

What sets TurboTax apart from TaxAct is the TurboTax Live service, which starts at $79.99 and includes a licensed tax professional who will review your tax return and answer your tax questions—not only during tax season but also year-round.

TurboTax Price & Filings by Edition

TurboTax Features for Personal Tax Returns

TurboTax walks you through the tax preparation process by asking you a series of questions. It will find deductions you are eligible for, check your return for accuracy, and allow you to import W-2, investment income, and QuickBooks data. If you need help, TurboTax provides telephone support for desktop customers, and one-on-one chat support for online customers.

Features of TurboTax personal tax software include:

• Data Import: TurboTax imports W-2 data from select employers, downloads investment income from select financial institutions, imports Uber income, and imports data from QuickBooks. By contrast, TaxAct imports W-2 data and spreadsheets with stock trades.
• Deduction Finder: TurboTax helps you find over 350 deductions and tax credits that you may be eligible for, and provides tools to value charitable donations and maximize business deductions. TaxAct also provides deduction finder tools.
• Error Checking: TurboTax checks for thousands of possible errors and highlights entries that might trigger an audit. Both TurboTax and TaxAct offer error-checking tools.
• Customer Support: In-app chat feature (for online software) and telephone support (for desktop software). Self-help is available through the online forum. For additional fees, customers can upgrade to TurboTax Live to talk to a licensed tax professional.
• Specialty Tax Forms: TurboTax cannot prepare foreign bank account reports (FinCen Form 114) or controlled foreign corporations (Form 5471). TaxAct, however, can support these specialized forms.
• Online or Desktop Software: TurboTax is available either as online tax software or as downloadable tax software for Windows or Mac desktops.

Overall, TurboTax provides more tools for importing data, and provides in-house tax professionals to review your tax return and answer your questions (for an additional fee). TaxAct, on the other hand, answers tax questions for free, but they do not provide professional-level review of your tax return. Both TurboTax and TaxAct have similar error-checking and deduction-finding features.

TurboTax Features for Business Tax Returns

TurboTax Business prepares business tax returns for entities such as S corporations, C corporations, Limited Liability Companies, and Partnerships. Business owners will also need TurboTax Self-Employed (online) or TurboTax Home and Business (desktop) to prepare their personal tax return. TurboTax Business can import data from QuickBooks and has robust error checking and customer help.

Features of TurboTax Business include:

• Business Entity Tax Forms: TurboTax Business can prepare tax returns for LLCs and Partnerships (Form 1065), S-corps (Form 1120-S), C-corps (Form 1120), and Trusts and Estates (Form 1041). TurboTax does not prepare Form 990; that functionality is available from TaxAct.
• Information Tax Returns: Prepare Form 1099-MISC for independent contractors and Form W-2 for employees.
• QuickBooks Data Import: TurboTax Business can import data from the desktop version of QuickBooks.
• Deduction Finder: TurboTax Business provides on-screen guidance for maximizing depreciation and other business deductions.
• Error Checking: Over 1,000 in-app diagnostics to identify errors and mistakes.
• Desktop Software: TurboTax Business is available by download or via CD for the Windows operating system.

TaxAct Pricing & Features

In addition to the four personal tax plans, TaxAct has a plan for self-employed taxpayers that starts at $49.95, and a business plan for $59.95 that includes tax forms for sole proprietors, partnerships, C-corps, and S-corps, and nonprofit organizations. TaxAct Self-Employed starts at $49.95 versus $119.99 for TurboTax Self-Employed.

The primary difference between the products is TurboTax Self-Employed includes a subscription to QuickBooks Self-Employed, which is an accounting software you can use to track all of your income and expenses. You can also import your data from QuickBooks Self-Employed into TurboTax Self-employed.

TaxAct Price & Filings by Edition

TaxAct Features for Personal Tax Returns

When it comes to features included, there are many similarities between TaxAct and TurboTax. Both products allow you to import data from W-2 forms and financial institutions, and both have built-in deduction-finding and error-checking tools. However, TaxAct sets itself apart from TurboTax by including foreign bank account reports that you won’t find in TurboTax.

Features of TaxAct tax preparation software include:

• Data Import: TaxAct imports W-2 data from select employers, and can import stock trade data from CSV spreadsheets. By comparison, TurboTax can import investment income directly from financial institutions, and can import Uber income.
• Deduction Finder: Similar to TurboTax, TaxAct includes in-app guidance for maximizing personal deductions and tax credits related to dependents, itemized deductions, and expenses related to business or farming.
• Error Checking: Both TurboTax and TaxAct have error-checking tools. TaxAct checks for incomplete or inconsistent information, prompts users to double-check data entry, and highlights opportunities to save taxes.
• Customer Support: Like TurboTax, unlimited phone support from tax specialists for customers using Deluxe, Premier, or Self-Employed versions is available in TaxAct.
• Specialty Tax Forms: TaxAct can prepare foreign bank account reports (FinCen Form 114) and controlled foreign corporations (Form 5471). Unfortunately, these forms are not supported in TurboTax.
• Online or Desktop Software: Both TaxAct and TurboTax personal tax software are available in online and desktop format for Windows or Mac desktops.

Overall, TaxAct does not have as many features as TurboTax, which is why it costs less. However, TaxAct does offer free live telephone support, which you will have to pay for with TurboTax.

TaxAct Features for Business Tax Returns

Similar to TurboTax Business, TaxAct’s business tax software prepares tax returns for entities such as S-corps, C-corps, and LLCs. Plus, TaxAct can import accounting data from spreadsheets, and it has robust error-checking and deduction-finding tool. You can also prepare W-2 and 1099 forms with TaxAct Business edition.

Features of TaxAct business tax software include:

• Business Entity Tax Forms: Prepare tax returns for LLCs and partnerships (Form 1065), S-corps (Form 1120-S), C-corps (Form 1120), trusts (Form 1041), and tax-exempt organizations (Form 990).
• Specialty Tax Forms: TaxAct can prepare foreign bank account reports (FinCen Form 114) and controlled foreign corporations (Form 5471). This is something TurboTax does not provide.
• Data Import: TaxAct can import trial balance data formatted as a CSV spreadsheet that has been exported from accounting software. TurboTax, however, can import data from QuickBooks.
• Deduction Finder: TaxAct provides guidance for maximizing business deductions, similar to TurboTax Business.
• Error Checking: TaxAct provides alerts color-coded in red, yellow, and green. Alerts check for incomplete or inconsistent information, prompt users to double-check data entry, and highlight opportunities to save taxes. TurboTax also checks for errors.
• Online or Desktop Software: TaxAct’s business and personal tax software are available as online software or as downloadable software for Windows or Mac desktops. TurboTax Business is available only for Windows desktop.

TaxAct vs TurboTax: Ease of Use

TurboTax and TaxAct have similar user interfaces, and they are easy to use. Both programs use an interview-style format to guide you through the process of preparing your tax return. If you prefer to skip questions that don’t apply to you, it’s a lot easier to do this in TurboTax than TaxAct.

TurboTax Ease of Use

TurboTax is relatively easy to use. Users can navigate the software in multiple ways, such as using interview-style questions and answers to move through major sections of the software. Alternatively, users can navigate directly to data input screens. Users can also import business income and expenses from QuickBooks, and you can download investment data from financial institutions.

TaxAct Ease of Use

TaxAct is also relatively easy to use. TaxAct gathers information by asking questions to which users type in answers (interview mode). Alternatively, users can switch to a forms mode. The interface isn’t quite as slick as TurboTax, and clicking through all the questions that don’t apply to your business can feel a bit tedious.

TaxAct vs TurboTax: Customer Service

TurboTax and TaxAct both offer customer support by phone and through a searchable knowledge base. TurboTax’s in-app help content is more robust than what TaxAct offers, and customers can have a tax professional check their return for accuracy for an additional fee through the TurboTax Live service. TaxAct, by contrast, will answer tax questions for free by telephone.

TurboTax Customer Service

Customers can call TurboTax for telephone support (available 5 a.m. to 9 p.m. Pacific through the tax season). Customers who use an online version of TurboTax can use the in-app chat feature for support. Tax questions can also be posted to the TurboTax community forum. Customers can upgrade to TurboTax Live to get personalized answers from a licensed tax professional.

TaxAct Customer Service

TaxAct answers software and tax questions for free by telephone and by email. TaxAct also provides help through an online knowledge base. Telephone support is available Monday through Friday from 8 a.m. to 5 p.m. Central. During the January to April tax season, telephone support is available until 8 p.m. Central on weekdays and until 5 p.m. on weekends.

TaxAct vs TurboTax: Customer Reviews

Overall, customers seem relatively satisfied with the user interface and features of both TaxAct and TurboTax. One customer noted that TaxAct’s customer support hotline always seems to be busy. The biggest complaint about TurboTax is its relatively high price.

TurboTax Customer Reviews

Customers have positive things to say about TurboTax’s user interface and its ability to guide users through the process. The biggest complaint from customers is TurboTax’s price, which customers say seems high compared to other tax software. Customers report difficulties entering foreign addresses in TurboTax.

TaxAct Customer Reviews

Customers have mixed reviews of TaxAct tax software. Some people are satisfied with TaxAct’s simple interface and user guides. Others expressed dissatisfaction with TaxAct’s customer support. One customer reported an error with TaxAct’s deduction finder. Another customer said the government never received an e-filed extension.

Bottom Line

Both TaxAct and TurboTax are good choices for preparing personal and business tax returns. Take a close look at which forms you need to file, as that could steer you in one direction or another. TurboTax has more features for importing and downloading data. TaxAct provides free telephone support for technical and tax questions. But TurboTax provides support through its in-app chat feature.

We recommend TurboTax because it is much more robust than TaxAct. TurboTax includes more options for importing data and a number of ways to verify that your tax return does not have errors. The innovative Live service, where a CPA or Enrolled Agent can review your tax return before filing, is an additional service that you can use all year long to get your tax questions answered.

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