- Straightforward and logically designed program
- Multiple returns for one account
- Exceptional account and data security
- Wide variety of extra features
- Cost-friendly base prices
- Outstanding user/customer support
- Limited W-2 importing
- No SSN validation
- Login and compatibility issues with the app
Getting taxes ready in time for the IRS’s deadline can be quite a challenge even for those who are lucky enough to only need to file a simple tax return, so it’s not surprising that more and more taxpayers decide to turn to tax prep software. Sadly, these solutions either provide exceptional service for outrageous prices or are cheap but only provide the basics. Because of this, users are forced to make compromises, which is the very thing to avoid when it comes to tax returns. TaxAct, however, is the perfect solution for those looking for a tax preparation service that is not only cost-friendly, but also has plenty of features to help make the tax season a little less hassle. In fact, it doesn’t matter whether you join TaxAct as an entity or an individual taxpayer, the company ensures the same smooth experience for everyone thanks in part to the straightforward, mobile-friendly software. This program is improved by top-notch security and is filled with clever extras with which your tax refunds can be maximized.
Despite being a bit slow when it comes to saving and processing data, TaxAct is the epitome of how to make things as hassle-free as possible. Not only does the online account have a simple and straightforward design, but what’s more important is that it’s also capable of handling multiple tax returns including those that apply to businesses or were due one or two years prior. But simplicity is just one of the many benefits that TaxAct users can enjoy since user-friendliness is also of utmost importance for the company. This is proven by the tax prep software itself, which is accompanied by a tax calculator – also available from the company’s homepage – and a report on your financial savings that is automatically generated once the return is filed.
However, the software is full of many of these small but valuable extras. For instance, every section can be bookmarked to be reviewed later, users can optionally add notes containing information like dates, descriptions, and comments to boxes where amounts have to be inserted. There is also the so-called refund snapshot that not only logs every single modification made to the returns but also showcases exactly how refunds have been calculated. Additionally, the help tab is so extensive that it could quite easily put TaxAct’s tax experts out of their jobs, containing articles related to all kinds of tax topics, tutorials, form instructions, and even a glossary in two languages.
While TaxAct has smartly maintained a similar layout as other tax prep solutions for its different sections within the software, there is one valuable exception: the Next Year tab, another prime example of TaxAct’s attentiveness towards its clientele. Aside from providing users with the option to create W-4s to correct the amount that employers withhold from their federal tax income, the software also gives information about the following year’s tax changes, can calculate the expected taxes two years in advance, and even provides users with the option to give feedback to the company to make next year’s product even better.
The good news is that TaxAct is capable of handling all sorts of forms and will keep them in an appropriate category in the most logical way possible. Unfortunately, there is some bad news since there are a few issues, particularly revolving around the importing of documents. For starters, the proudly advertised W-2 importing feature only works if the employer’s EIN is supported for W-2 import, otherwise users have to fetch unchanged data from the previous year’s return – a feature unavailable for Free users – or manually enter everything. A similar limitation is also present in the case of state tax forms, because the program doesn’t fetch anything from federal forms. And when it comes to the tax returns of previous years, only those that were created with TaxAct or with its two competitors TurboTax and H&R Block are supported. Thankfully, however, these are the only issues with the program; everything else works like a charm.
Every time a new form is opened, you are promptly guided through it step-by-step, but in several cases users can upload the content of a form as it appears on the original document via quick entry. With 1099s, however, there is another option, namely to fetch them directly from your financial institution without breaking a sweat – although it’s worth adding that this feature only supports a handful of institutions. Additionally, higher-tier users – TaxAct Deluxe+ and up – are provided with more treats, including the clever Donation Assistant, which lists the values of noncash contributions so you only have to enter the number of items. When it comes to upgrading to a higher-tier, the program immediately warns users should they need access to a higher-tier product to perform certain actions or add forms that are not present in the basic version, though this step can be postponed until the return is ready to be filed.
Filing and Extras
When it comes to reviewing and filing tax returns, TaxAct provides the same care as it does with everything else related to the service. For instance, the software goes through all forms a second time to check whether there are any problems and then explains its findings in an easy to understand manner. It’s also before filing when you’ll be provided with your personalized future savings reports, a summary of capital gains, and a comparison between the current and prior years’ returns – all of which are provided entirely for free.
There are no surprises at all when it comes to the filing process itself, however, although TaxAct’s attentiveness shines through here as well. The software allows users to postpone sending selected returns to the IRS or to choose between paper and electronic filing, and there’s the extra service of Audit Defense available for an extra fee of $49. This fee might seem a bit too much at first but remember that aside from paying with credit or debit card there is also the option to deduct the cost of the services from your earned refunds – albeit for an additional $39 fee. However, regardless of the chosen payment method, users can opt for getting their refunds intact or have a portion or all of it added to gift cards – an act that is rewarded by TaxAct in the form of monetary bonuses.
Mobile & Software
It’s safe to say that TaxAct outperforms itself again when it comes to mobile support, since the company has made the online software itself compatible with any kind of mobile browser, but also has an official iOS and Android app called TaxAct Express too. Although feature-wise the app is a bit better – as it can also capture paper-based W-2s with the device’s camera and sign in users with biometric authentication – using the mobile browser version is a better bet for certain reasons.
One such reason is that the application simply cannot cooperate with older mobile operating systems – a frustrating limitation for those who don’t upgrade their smartphones on an annual basis. But it’s still a nuisance compared to the fact that the app only recognizes users after multiple failed attempts at logging in even when they use a device that perfectly complies with TaxAct’s requirements regarding the right platforms.
Even though the lack of properly checking the validity of the Social Security numbers is a huge mistake, TaxAct’s overall security is exemplary. Not only does the program always ask for a temporary code – which is sent to the default email address or mobile number – but it also blocks access to the account from computers or phones that haven’t yet been verified as trusted devices by the account owner. This verification also has to be performed for new email addresses and mobile phone numbers, ensuring that it is indeed you who has the right permissions to prepare tax forms for the account in question.
In addition to that, the account properly logs all activities within the account, even highlighting the very last modification that was made to the returns. And if that’s not convincing enough, the program is capable of automatically logging users out after a certain period of inactivity to ensure that nobody can tamper with the data if the tax return happens to be left open.
Compared to its competitors the base prices of TaxAct online products are quite cost-friendly, especially since all users are entitled to start preparing their returns with the free version and pay for an upgrade later on. As for the programs themselves, the list of features is pretty decent, especially in the higher-tier versions. For instance, Basic+ – which costs only $14.95 – already contains the easy import of last year’s return as well as unlimited tax and technical support, while Deluxe+ ($47.95) adds itemized deductions into the mix. The top products, Premier+ and Self-Employed+, cost $57.95 and $77.95 respectively, but whereas the former ‘only’ comes with more forms and priority support, the latter provides bespoke features like the deductions maximizer and year-round tax planning.
Although there is no way to save on the cost of TaxAct – aside from the usual tax season discounts – the refer-a-friend promotion will earn you $20 in Amazon gift cards and a 20% discount to the person that has been referred. There’s also a price lock guarantee, which ensures that the chosen program’s price remains consistent no matter when the returns are filed. And as a nice addition, all TaxAct clients are entitled to download their personalized savings reports to identify future savings and financial opportunities without paying additional fees.
Thankfully TaxAct’s customer support is just as versatile as the program itself. For starters, the technical staff and the company’s tax experts are always available – at least on weekdays – and can be reached by phone or email. No matter which communication channel is chosen, you can expect a fast response; when we encountered a problem with the TaxAct Express mobile app, the courteous and thorough email response was received within hours.
But live support is just the beginning as the other means for helping taxpayers are even better. There is an extensive support page containing answers to the most common questions related to the service and taxing, as well as a blog with many articles. In addition to that, the company also provides various calculators, which can estimate the taxes to be paid next year or the taxpayer’s expected tax bracket, for instance. And if that’s not enough, there is a complete audit assistant that explains in the simplest manner what should be done if the IRS find errors in the filed return.
All in all, the fact that there are so few issues with TaxAct is the ultimate proof that a tax prep software doesn’t have to be fancy looking so long as it provides the services that it’s intended for. Granted, the mobile app may crash even on supported platforms and the W-2 importing feature is gravely limited, but put those issues to one side and you’ll have an exceptional solution that does indeed focus on the two most important aspects that people hope to get from these solutions: having their taxes done quickly and as conveniently as possible. Since its flaws aren’t disastrous to the experience of the service, aspects like the straightforward program, the many built-in support options, the outstanding account security, or any of the clever extras are able to stand out – meaning it’s easy to say that TaxAct is one of if not the best tax preparation solution provider on the market.
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