PROS / This is the only tax software we reviewed that doesn't charge an additional fee when you use a portion of your return to pay the filing fee.
CONS / It's not the easiest program to use if you have a complex tax situation. Further, if you need to go back to review a certain screen, you will need to click through several screens to find the necessary information.
VERDICT / While TaxAct is more difficult to use to file complex returns than other programs and doesn't let you directly import your W-2, it gives you a thorough summary of your taxes and can analyze whether it's better for married filers to file jointly or separately.
TaxAct is a tax software that our reviewers found harder to use for complex returns, but for simple returns it is relatively easy. This software offers several disbursement options for your tax refund and doesn't charge additional fees when you pay the filing fee with your return. It offers free phone support, keeps your records on file for three years and offers assistance if you're audited. For these reasons, TaxAct receives our Top Ten Reviews Bronze Award for best tax software.
Ease of Use & Support
Our reviewers tested each of the tax software programs on our list using three common scenarios: a married couple filing jointly with dependents; a single parent filing as head of household with a dependent who is a college student; and a single, self-employed individual claiming multiple deductions. We found that while TaxAct is well suited and easy to use for simple, basic returns, it becomes harder to use as returns become more complex.
This was particularly true for our single, self-employed scenario. We had to navigate through many different screens to find the right information when we wanted to review the information we entered. In some cases, it would not show information we entered. When this occurred, our reviewers re-entered that information only to find they had a double entry. This added complexity makes this program harder to use for people with more complex deductions.
For more simple returns, TaxAct is a straightforward option for online tax filing. It isn't as flashy as other programs, but it provides a very thorough summary of your tax return as you complete it. It also has a variety of resources and articles that you can consult. As you're working on your review, you can bookmark questions and return to them at a later date.
Unlike other tax preparation software we evaluated, TaxAct doesn't require you to use a paid version of the software to get phone support. You can also receive support at no cost in the event the IRS audits you. This support can include briefing you on any letters you receive from the IRS and reviewing tax forms. If you need to meet with the IRS for auditing purposes, TaxAct charges a fee, the highest in our review, to have a representative accompany you.
This tax software keeps your records on file for three years. It doesn't offer a Spanish option.
Tax Preparation Options
TaxAct allows you to prepare and file your taxes through its online program, or by downloading the software to your computer. It has two apps available for phones and tablets: TaxAct Express, which can be used for filing only the most basic returns, and Tax Return Status by TaxAct. Its one drawback, however, is a lack of tax preparers who can assist you with completing your returns.
This tax software allows you to receive your refunds through direct deposit, check or prepaid cards. Some services may restrict disbursement options, limit some choices to state returns only or charge fees, depending on how you choose to receive your returns.
One area where TaxAct stands out is that it doesn't charge additional fees if you pay your filing fee with a portion of your refund.
Time & Money Savers
TaxAct has many of the features the best online tax services have to save you time and money, such as a refund calculator and the ability to import previous returns. It supports forms from all states and assesses hundreds of available deductions and tax credits to help you save as much money as possible.
One drawback of TaxAct is that you cannot import your W-2 into the program. Other programs we tested allowed us to upload a PDF or even take a picture of the W-2 and have that information entered automatically.
TaxAct offers a Quick Entry or a Guided Entry option for entering information from your W-2 form. Our reviewers found the Quick Entry option to not be particularly helpful. It's essentially a replica of a W-2 we had to fill in ourselves. Guided Entry is easier to follow.
TaxAct is a relatively easy program to use for simple returns. It can be difficult for more complicated returns. You cannot directly import a W-2 with this program, but it offers free telephone support as well as assistance if you're contacted for an audit. This tax software doesn't require an additional fee if you want to pay your filing fee with your refund. Despite some flaws, TaxAct is among the best tax software options available.
Contributing Reviewer: Eli McCormick