TaxAct Free Edition is more flexible than competing products. It supports investment, rental, and self-employment income, for example. Paid phone support detracts from its appeal, but a wealth of free features and low prices for e-filing and upgrades make this company a category standout.
- Adjusted gross income of $52,000 or less, and
- 18-58 years old
- Supports all common forms
- Free state e-file in AR, AZ, DC, GA, IA, ID, IN, KY, MI, MN, MO, MS, NC, ND, OR, PA, RI, SC, VA, VT, and WV
TaxAct Free Edition
- No income or age requirements
- Supports all common forms
TaxAct is rapidly gaining popularity as an affordable option for do-it-yourself tax filers. In a TaxAct review, a tax specialist writing for Reviews.com notes that the online software provides plenty of guidance, no matter which version you use. PC Mag gives this year's Deluxe edition the Editors' Choice award, largely because the company handles more than the usual array of forms and schedules, and does so at more competitive prices, than its rivals. Although the graphics aren't as spiffy as other products, some reviewers find TaxAct easy to navigate.
In other quarters, support for TaxAct is more restrained. The Motley Fool says it's a solid choice for straightforward returns, but having to pay for telephone support is a downer. Product recommendation site The Wirecutter notes that if you don't buy the $19.99 Deluxe edition, you'll be confronted with plenty of pop-ups prompting you to upgrade. Some user reviews at Consumer Affairs gripe about a circuitous and cumbersome input process and indifferent customer support. Others warn about alleged system errors that created nerve-wracking or costly problems with the IRS.
The Free Edition includes federal e-filing at no cost and charges $14.99* to electronically file a state return. It can handle itemized deductions, investment gains and losses, and dividend income. This free platform also can be used by business owners and landlords. Similar offerings from major competitors cost as much as $80.
TaxAct's streamlined format minimizes data entry by pre-filling information entered in previous sections and transferring data from federal to state returns. Users can import last year's returns prepared with TaxAct, TurboTax, or H&R Block At Home (importation of a W-2 and investment information from select sources is available only with an upgrade; prices start at $12.99). TaxAct is one of the only tax prep software providers that offers a FAFSA (free application for federal student aid) worksheet at no charge. Note that tax help and technical support is available to all users via email, but phone support is offered to paying customers and requires a $7.99 add-on or upgrade to the Deluxe Edition ($12.99).
The Free File edition available through the IRS has restricted eligibility and no added value in terms of features but does offer free e-filing for residents of 20 states and the District of Columbia. Both versions include audit assistance, in the form of tax professionals who can help explain common IRS notices and the audit process. If you want someone to represent you during an audit, you'll need Audit Defense ($39.95).
Refunds can be collected through direct deposit or allocated toward the purchase of U.S. savings bonds in increments of $50. TaxAct also offers a Visa debit card, which isn't such a good deal; it carries a $10 initiation fee and $5.95 monthly maintenance fee.
For taxpayers with multistate returns and more than the simplest tax situations, TaxAct is a top choice. There's value to be had in free access to the common tax forms, even at the cost of a state e-file and phone support if necessary.
*Prices subject to change.