For the 2019-2020 tax season, TaxAct has elevated its software. Unfortunately, the improvements still leave it lagging behind competitors that offer better experiences, better pricing or both.
In 2020, TaxAct is still an okay choice for people who have used the software in the past, but most people looking to file for the first time will find better value elsewhere. For those people, we recommend looking at TaxAct alternatives.
Here’s why in our TaxAct Review. You can also see how TaxAct compares in our list of the best tax software for 2020.
Quick Summary
- Easy navigation, but not enough import options
- Pricing is okay, but free filers will enjoy other options more
- Repeat customers will find value in saved data from prior years
TaxAct Details | |
|---|---|
Product Name | TaxAct |
Federal Price | Starts at $0 |
State Price | $39.95 per State |
Preparation Type | Self-Prepared |
Promotions | None |
TaxAct Review Video
TaxAct 2020 - Can You Really File For Free?
If you’re a W-2 income earner (or you had retirement income) who may claim the earned income tax credit, or the child tax credit, you can use TaxAct to file both your state and Federal returns for free.
However, if you want to claim a student loan interest deduction, or if you used an HSA, or you want to claim any other deductions, credits, or different forms of income, you will have to upgrade and pay.
TaxAct 2020 Price and Plans
All of TaxAct’s paid tiers include support from a tax specialist (Enrolled Agents), and the Premier+ and Self-Employed+ tiers include a screen sharing option. Here are the prices for the 2019-2020 tax season.
It is worth noting that TaxAct’s Premier+ pricing is lower than H&R Block’s pricing. However H&R Block includes the Schedule C-EZ (less than $5000 in expenses) in it’s Premier tier - which is a big savings.
TaxAct charges separately for State and Federal Taxes, but basic W-2 job holders who don’t need to claim deductions or credits will get the software completely free.
Unfortunately, many filers will need to upgrade to at least to Deluxe+. This is where H&R Block's Free option really shines as it's truly free.
So unless your situation is really simple – you’re young and carefree, with no dependents and a single W2 job – you’re probably better served to look elsewhere.
Plan | Free | Deluxe+ | Premier+ | Self Employed+ |
|---|---|---|---|---|
Best For | W-2 income, Earned Income Tax Credit, Child Tax Credit | Itemized deductions, Student loan interest deduction, HSA, Retirement contributions (Saver’s Credit) | Stock Market Investments, Landlords | Self-Employed People |
Federal Pricing | $0 | $29.95 | $39.95 | $74.95 |
State Pricing | $0 | $39.95 | $39.95 | $39.95 |
Total Cost | $0 | $69.90 | $79.90 | $114.90 |
Note: TaxAct tends to adjust prices throughout the tax season. December and January are the best time to lock in low rates.
Navigation
TaxAct offers both guided and self-guided navigation. Since the software asks questions about your income at the start of the guided navigation, I expected that the early questions would be customized to my situation. However, TaxAct seems to walk users through all forms of income no matter what their early answers entail.
Aside from the excessive “guidance” TaxAct has very good navigation. Whenever a user completes a section, TaxAct provides a quick summary which can make it easy for users to catch mistakes. It’s also quite easy to use the navigation bar on the left hand side of the software to enter information that you may have skipped previously.
In my opinion, TaxAct makes it easy to hop in and out of the software, so you can fill out your tax return as you have time. TaxAct’s navigation is on par with most of the top-tier tax prep software packages, including some of the more expensive options. It’s also, in my opinion, an attractive interface; it’s actually a pleasure to look at the screen!
TaxAct also has a mobile app that you can use to, among other things, snap a picture of your W2 for uploading. You can switch back and forth from the app to your computer seamlessly as they update in real time.
Ease Of Use
TaxAct simplifies the filing process by allowing for quite a few imports. These include forms such as W-2, 1099, and even prior year’s returns. Allowing users to upload relevant forms cuts time and makes the software easier to use.
We found that, as a prior year user, it was very quick to get started because all of the information was saved. Also, they didn't nickel and dime us for importing information (which was a downfall last year).
The one issue that I found with TaxAct’s usability is the amount of text per question. H&R Block, TaxSlayer and TurboTax have much more human centric design when it comes to their screens. That means that users won’t get bogged down. For TaxAct to compete with these better software packages, it would need to cut back on text and include more “Learn More” buttons throughout the software.
Plus, for some more complicated issues, they make you fill out the worksheet versus easy guided questions. We found that more challenging compared to other options.
In general, the software is pretty easy to use. For basic filers who don’t have to itemize their tax returns, I think it’s a great solution. It’s also easy to use for people with basic itemizations as well, but businesses and landlords may prefer an easier to use option.
Also, having used TaxAct in the past, I was impressed by how much information TaxAct saved for me. This made it easy to see how my taxes changed from year to year. Many tax software options offer that service, and for good reason. Having a year to year comparison of taxes can really help you understand what changed, and how that affects your tax refund.
Knowledge Base Articles
Overall, TaxAct has a decent library of articles on “classic” tax topics. However, my search for “Crypto” came up empty. When you want information about a topic, you will have to use TaxAct’s search function, because the software does not have many “Learn More” buttons.
TaxAct Extras
All of TaxAct’s paid tiers include support from a tax specialist (Enrolled Agents), and the Premier+ and Self-Employed+ tiers include a screen sharing option.
For filers who don’t feel confident, these upgrades could be worthwhile. The only company offering a similar level of support is TaxSlayer (also offered at the Premium and Self-Employed levels).
Does TaxAct Support Crytpo Investments?
TaxAct supports the Schedule C or Form 1099-B that are required for filing Crypto investment returns.
However, it does not have special instructions for how to treat these investments. We also didn't find the question "did you purchase, transfer, own, or mine any crypto-currencies in 2019" like most of the other tax software companies are asking this year.
Crypto investors should consider TurboTax or H&R Block rather than TaxAct for filing taxes.
Is TaxAct Secure and Legit?
TaxAct requires users to enable two-factor authentication, but I was surprised that I wasn’t always prompted for secondary verification when my computer connected to a new wifi network.
Typically a tax software will prompt the secondary verification every time that you move to a new IP address. However, it did prompt for text or email verification after I cleared my browser cache.
Who Should Use TaxAct 2019-2020?
Overall, TaxAct performed well in 2020, but the price for the software is simply too high. At the time this review was performed, TaxAct’s prices matched or exceeded H&R Block’s in most cases. However, H&R Block consistently outperformed TaxAct.
In my mind, TaxAct should compete in the middle market with TaxSlayer and TaxHawk who both offer similar functionality with lower costs (or more “extras”). Unless TaxAct significantly drops prices this season, I recommend looking at alternatives.
Find our picks for the best tax software here.
Are you planning on using TaxAct? Share your experience below!
TaxAct 2020 Review
- Navigation - 80
- Ease Of Use - 70
- Features And Options - 85
- Customer Service - 70
- Plans And Pricing - 80
Overall
Summary
TaxAct is great for repeat customers, but doesn’t compete with other companies for new filers.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.