As I mentioned yesterday, I prepared my taxes using two online tax software programs this weekend. Yesterday I presented the first of my tax software reviews: H&R Block’s Tax Cut. Today I’ll cover TaxAct Online. If you want to use it, here’s a link to their offer: Do Your Federal Taxes Free
Tax Act Online has been my preferred service for several years. The main reason is because it’s the cheapest one that seemed reputable. I found it through the IRS e-file referral service after inspecting several of the options they recommended. Over the years, I’ve had good experiences with their customer service reps and never had a problem with my returns.
Tax Act Online Cost
You have three options from the start:
- Free Standard Online for $0
- Deluxe Online $9.95
- Ultimate Online for $16.95.
If you also have to file a state return, Deluxe and Ultimate actually cost the same because of the way they tack on the state cost. If you live in an income tax state, you might as well click the Ultimate button just to keep it simple. The Free Standard Online option is only for free Federal returns.
All versions include free online support. The two pay options also include telephone support.
Tax Software Interface
The Tax Act interface has a more formal feel than the H&R Block software. It lacks the soft edges and soothing green colors. The design seems to be focused on efficiency and clean lines rather than comfort.
This is the entrance screen after you register:
The site allows you to save and exit at any time. Once you log back in, this is the screen you see:
Like H&R Block, it also offers the progress indicator in the upper right. This is where they show you what you owe or what you will be receiving back.
Additional help is available below the fill-in boxes. The questions are geared toward the section you’re working on at the time.
If you opt for the paid versions, they also offer a section on Life Events. You click the bubbles for life events that have occurred in the last year, and then the software takes you through a series of questions to ensure that all possible tax implications are covered. For example, if you had a job change and made more than $97,000 total, you may have overpaid your social security tax. TaxAct will check to make sure you haven’t.
Small Business Help
If you have a small business, I recommend using the Deluxe or Ultimate software to ensure you get the detailed help for your Schedule C. TaxAct takes you through a series of detailed questions to properly complete all the forms.
TaxAct is more streamlined and less intuitive than H&R Block. The software is efficient, but you do have to look in a few places for additional help if you need it. I found some of the wording clearer on the H&R Block software, but was able to understand what TaxAct was asking most of the time.
TaxAct uses Alerts to flag any potential problem areas. After you correct an alert, you may not be immediately taken to the next alert, but instead have to click through the whole section. You can avoid this by using the top navigation to return to the alerts, but it is annoying. Once you complete the alerts, you’re then offered an opportunity to check them one more time.
I also wasn’t able to find anything on the site that indicates that they provide audit support should you be audited.
Use or Don’t Use?
As I said, I’ve been using TaxAct Online for years, so obviously, I’m a fan. I’m comfortable with online interfaces and know how to use them. I don’t need much handholding. TaxAct does offer an online tour for first-time users if you’re not comfortable with the process.
Overall, I find the TaxAct software to be much more affordable and I’m impressed with the wealth of information available for the low price. I feel that TaxAct may be more thorough than H&R Block because of the Life Events section.
Final Tip: Whichever program you use, always print the return and review it before filing. This year, I discovered I had incorrectly entered some small business income in two different sections, which increased my income. Correcting that saved me some money!