A Review of TaxAct’s Services for This Year

We put this tax preparation software to the test. In this TaxACT review, we cover features, ease of use, and cost.

If you’ve been looking for a cheaper way to get your taxes done, TaxAct could be the online software for you. It’s more affordable than many other software options out there, and it could prove especially helpful if you’re preparing your own taxes for the first time.

New Features in 2018

TaxAct has introduced several new features in 2018, for those filing their 2017 taxes. These include:

• More W2 import options: You can import your W2 directly from some employers or import your W2 information via photo. This step just saves a bit of time up front.
• Redesigned mobile app: If you want to file on your phone, you can now do it more easily with TaxAct’s redesigned mobile app. You can even use the photo W2 import option when filing on your phone.
• Access to prior year returns: If you filed on TaxAct last year, you can access your prior-year returns. TaxAct will save your returns for seven years after filing, even if you only use the free product.
• Income interview: The company’s new streamlined interview helps you get through the income portion of your taxes more quickly.
• More support: This year even TaxAct’s free version includes unlimited phone and email support at no extra charge.
• More versions: This year, TaxAct offers several additional versions of its product, including some specifically for individuals. We’ll detail the options below.

TaxAct announced in early 2017 that it released a new product, BluPrint Financial Assessment. This option gives tax filers access to additional financial insights and shows them how to reduce their tax liabilities in the next year. This is once again available for the 2018 season.

Getting Started

To start with TaxAct, you’ll have to create an account. You’ll automatically begin with the software’s free version. If you get to a point where you need an additional form that’s unavailable under the free version (or if your gross income is too high), it will ask you to upgrade. Don’t worry. You won’t pay a dime until you actually file your taxes.

Learn More: Cheapest Tax Software for 2018

If you know off the bat that you’ll require a more full-featured option, you can upgrade from the start. TaxAct offers the following options for Individuals and Businesses.

 

We’ll focus mainly on the Individual options here, but know that the other options are available. If you run a small business or non-profit with very streamlined reporting, you might consider TaxAct as an affordable way to DIY your taxes.

Once you’ve signed in, you can choose to import last year’s tax information, which saves you some steps initially. If you have your old taxes in PDF form, you can upload them to TaxAct.

When you get started, you can choose to fill out different portions of your return at any given time. You can see the way the software will walk you through events, though, along the top option bar. You’ll naturally work your way from left to right if you allow the software to steer.

Throughout the process, if you have questions, you can use the help center on the right sidebar. It’s a quick way to get basic answers to your tax questions. And, remember, all versions of TaxAct come with unlimited support this year.

One interesting new feature is that ability to bookmark questions. If you’re filing your taxes and don’t have the information you need for one piece, you can click a little star on that question. This will let you come back to specific questions later in the tax-filing process, without having to walk through all the previous questions first.

Walking Through the Software

To make sure you won’t miss anything, TaxAct first asks you some basic questions. It actually begins with health insurance coverage for the year, ensuring you don’t have any obligation under the Affordable Healthcare Act.

Then, you get to this menu, which includes a variety of “Life Events” to choose from. At the beginning, the software will just ask you to choose the event that applies to you, and then answer a few basic questions about that event.

This was one section where I wasn’t entirely sure, at first, which version of TaxAct would cover what. The list of covered forms covered by the free version is actually quite extensive. However, TaxAct only lets you choose one “Life Event” plus (potentially) “Financial Hard Times,” if you’re using the free version.

When I tried to select a second event, I needed to upgrade to the Plus edition. So, even if the forms you need to use for certain items are included in TaxAct’s list of free forms, you’re limited in how many of those forms you can access under the free version.

It’s to be expected, however, that the free version will be somewhat limited. And $17.50 for the plus option is still a great price.

When you click into each “Life Event,” you’ll get a series of informational pop-ups. How many you see depends on the specific event.

One good thing about these popups is that they tell you exactly which forms you’ll need to put under that particular section. For instance, if you had college costs, you might use a 1098-T, 1098-E, or 1099-Q.

I’ve got to be honest, these popups got to be a little much after a while. I clicked through five or six screens on the “Life Event” for investing. For first-time tax filers, these popups could be helpful. To me, they were overkill. With the helpful popups available whenever you need them, a more succinct introduction would be more useful and streamlined.

There may be a way to turn off the additional informational screens. But if there was, I wasn’t able to locate the switch.

Entering W-2s

One item of interest was the way TaxAct allows you to enter W-2 information. The first option looks similar to what I’ve seen with other tax filing software. It just walks you through the various sections of your W-2 so that you can fill out each section as you come to it.

If you work for certain employers, the W2 may automatically import, or at least import your employer’s information. But you can also try to upload an image of your W2 to have the software automatically pull in your information.

Related: Tax Deductions for People Who Work from Home

Tackling All the Sections

With most tax software options, including this one, I’d recommend that less experienced tax filers walk through the steps in the order recommended by the software. It’s less likely you’ll miss something this way, and you might even find some deductions and credits you didn’t know you could claim.

With TaxAct, you can easily save your progress and come back to it later if you need to file your taxes in a few sittings.

Resource: The Most Common Tax Deductions

If you already know which information your taxes require, you can click through various sections at your leisure. The software will still save your progress, and you can skip back and forth from one section to the next as needed.

Checking Your Work

TaxAct offers audit risk assurance, best refund guarantees, and an accuracy check. You can check for various levels of accuracy, depending on where you are in the process. Red level checks will look for major missing information that could be an IRS red flag for an audit or rejected tax forms. Green level checks might give you access to credits or deductions you didn’t know you could claim.

Next Year

Besides running a check of this year’s taxes before you file, TaxAct offers some interesting features in the “Next Year” category. You can start tracking your donations in 2018 to get a bigger refund next year. You can also have TaxAct help you adjust your W-4 withholding to prevent over- or under-withholding for this tax year. Other options include a tax calculator, and an option to give TaxAct product suggestions for next year’s version.

Other Benefits

TaxAct offers a variety of additional benefits, including being mobile-friendly. TaxAct offers online chat, email support, and phone support if you get stuck at any point. And you can choose to receive your refund through direct deposit, check, or an American Express Serve Debit Account, which gives you the quickest access to your money.

TaxAct offers an accuracy guarantee. If you get an IRS penalty related to calculation errors, TaxAct will reimburse you for the penalty amount. TaxAct also offers basic audit support. It’s not as robust as that offered by some more expensive software. But the audit center would get you through the basic steps of dealing with an IRS audit on your own.

The bottom line here is that TaxAct is a user-friendly, and very affordable, tax preparation software option. It doesn’t have quite as many fancy features as more expensive software like TurboTax, but it does get the job done. It also offers first-time filers some great information to help them through the process. Overall, it’s a solid option if you’re in the market for an affordable way to file your own taxes.

To give it a try, visit the official TaxAct website.

Topics: Taxes

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