TaxAct’s free software is designed for simple filers (including those with dependents), college students, retirees, and individuals with unemployment income. However, its free tier does not include state tax returns; you’ll need to pay $39.95.
TaxAct is on par with some of the bigger names when it comes to importing data from other tax software. You can import previous years’ information from platforms like TurboTax and H&R Block to get a head start. However, TaxAct lacks the ability to connect directly with financial institutions for things such as retirement distributions. Again, this isn't a deal breaker, especially if you prefer to manually enter your information or simply don’t like the idea of a third party connecting to your financial accounts.
TaxAct has three upgrades: Deluxe (which adds more tax credit and deduction opportunities), Premier (which includes home sales, investments, and rental property income), and Self Employed (which allows for business income and deductions).
Cost: TaxAct’s lower prices may catch your attention, but they’re worth a second glance. While the unpaid version is marketed as “free,” that only applies to federal returns. You’ll need to pay a $39.95 fee to file state taxes. The other three plans cost $24.95, $34.95, and $64.95, respectively. From there, you’ll pay $44.95 per state return.
Customer support and guarantees: TaxAct stands out in that all versions now include XpertAssist, although this may not be a permanent promotion. The service gives you live access to a tax expert (“a certified public accountant, an IRS credentialed enrolled agent, an attorney, or another tax specialist”) who will answer your questions. Standard times are 8:00 a.m. to 5:00 p.m. from Monday to Friday. But at the end of January, TaxAct announced that XpertAssist will be available seven days a week during tax season, although it said availability may be limited.
Additionally, TaxAct has one of the larger accuracy guarantees, which covers up to $100,000 of IRS penalties and interest (H&R Block, for instance, offers up to $10,000 reimbursement). Of course, terms and conditions apply.
How did TaxAct adapt to our personas? Ricky Retiree is the only one of our fictional filers who could complete his federal tax return with the free edition of TaxAct. (Again, he’d still have to shell out to file his state return.) Devon Developer had to upgrade to Deluxe to enter his student loan interest, as did the Dotington family to enter their mortgage interest and child care expenses. Franny Freelance needed the Self Employed version to enter her business details.