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TaxACT Review 2011 – Free Online Tax Software

Kira Botkin

TaxACT, which provides affordable tax products to the masses, is owned and operated by 2nd Story Software, a privately-owned company since 1998.

According to Hitwise reports, TaxACT is the #2 destination for e-filers on the Web.

Key Features and Benefits

  • Provides a risk-free federal refund guarantee: if you get a higher refund or less tax owed with another tax preparation method, using the same data used with TaxACT, you will get your money back.
  • You can access unlimited Web and email support as well as video tutorials.
  • If you’ve got simple taxes, you can use the free version, which includes most forms but much less guidance.
  • Helps you with figuring in life changes such as marriage, a new baby or a new house purchase.
  • Imports last year’s return information to your current filing and checks for large differences between this year and last.
  • The Deluxe version is sufficient for most users, but if you’ve got a C corp, S corp, or partnership, they also have a more advanced Business version.
  • Tools Center offers calculators for loans, donations, taxes, savings and even a stock assistant.

Advantages

  • Prices are lower than competitors – the Free version is much more comprehensive than its competitors, and you don’t even have to upgrade to get Schedule C.
  • You don’t pay anything until you are ready to e-file.
  • You can complete your taxes on TaxAct’s site, download a copy of the software, or receive a copy on CD.
  • Guarantees 100% accuracy on all editions. If assessed a penalty due to a calculation error by TaxACT, they will pay the penalty plus interest.
  • Price guarantee—you get the price quoted when you started e-filing regardless of when you finally file.
  • The program allows you to go back to view previously completed forms without losing data you’ve already entered.
  • Shows your total refund or owed amount as you go through the filing process.
  • Asks questions about life events such as surviving a disaster, where you may be eligible for a tax break.
  • Free e-filing is included with all editions, and the state return is the cheapest among its competitors as well.

Disadvantages

  • I found the help videos rather annoying, and eventually just turned off the sound.
  • You can only receive help online – there is no phone support included, but you can pay them for it.
  • The wording often isn’t very clear, so unless you know what you need to do, you might need more assistance.
  • It provides the least guidance of the major tax programs and took me the longest to complete in the head-to-head comparison.
  • While TaxAct states you will be able to import prior year’s taxes, it can’t always read the PDFs generated by other programs.
  • If you use the Free package, your state return will cost $14.95. However, buying the Deluxe plus State edition costs $17.95, so if you’re going to use them to e-file your state returns, you might as well just get the Deluxe anyway.

Available Packages

Free Federal Edition – Free
Suitable for those who need to file the 1040 and not much else. It does include all the schedules, but doesn’t offer much guidance or extra deduction calculations. Everything about this product is free from e-filing to email and audit support. State taxes will run you $14.95 if you use the Free edition.

Deluxe Federal Edition – $9.95
Includes everything you get in the Free Edition plus the following: the ability to import data from last year’s forms; get the most exemptions for your charitable donations; extra calculators & reports; free phone support and guidance from tax specialists; ability to factor in life changes.

Ultimate Bundle Edition – $17.95
This is the Deluxe edition plus State taxes. Best value for those needing to file both federal and state. It includes the Deluxe edition and your choice of one state.

Business Edition – $39.95 to $54.95
There are several different business editions, which are used if you have a partnership, S corp, or C corp. You can also buy discounted packages that include filing for your business as well as your personal taxes, and the $54.95 edition also includes your state taxes. These editions must be downloaded or purchased on a CD.

Is It Right for You?

TaxACT is less user-friendly but more complete than the other major tax preparation software choices. You are certainly getting what you pay for in ease of use and access to support. Their Deluxe edition is much less costly than TurboTax or H&R Block’s comparable editions, but you may need some tax knowledge going into it in order to get everything completed correctly. If you use them each year, you’ll save time on importing items since it will use information from prior year returns.

Overall, this is a good tradeoff between price and convenience. If you have some tax knowledge, they also give you the option to view the forms as you go along so you can double-check the program’s work. All the personal editions can be started for free and no payment is required until you are ready to hit the File button.

Looking to file your taxes online using a different service? Check out our comparison table of TaxACT vs TurboTax vs H&R Block At Home.

Categories: Money Management, Reviews, Taxes

Kira Botkin
Kira is a longtime blogger and serial entrepreneur who enjoys gardening, garage sales, and finding stray animals. She lives in Columbus, Ohio, where football is a distinct season, and by day runs a research study for people with multiple sclerosis. She hopes that the MoneyCrashers team can help you achieve your goals and live a great life.

Learn more - including co-founders Andrew Schrage and Gyutae Park.

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Comments

  • Chris

    I used this last year and it’s great. Very straight forward, easy to use. They often offer deals every year around January where the Ultimate Bundle ends up costing between 11 – 14 dollars. Definitely the cheapest tax software between the three.

  • Keith

    This is my second year using TaxAct and I’m very pleased with it’s performance. My needs aren’t complex, but it did successfully walk me through my capital gains, all of my 1099-INT and 1099-DIV forms, first time home buyer credit, charitable donations, child credits, etc. You might want to consult a professional if you have your own business and income property.

    It also allows you to view the filled in form (non-printable) ahead of time, so in theory you could copy the information by hand to your forms and pay nothing. But it’s so easy to use you’ll find that TaxAct deserves the $18 it costs to do both Fed & State. Plus, this year I was able to import form last year’s forms which saved me a bunch of data entry (including my kid’s SSNs).

    4-1/2 stars. I’ll be using it next year, too. Oh, I’m also a stickler when it comes to interface design, but TaxAct really does it well. The interface is the reason why I won’t use Turbo Tax.

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  • http://www.nwtaxpreparation.com/ NW

    I normally use turbo-tax for mine and I like it but is their anyone out there who has used both? And if you have which did you like more? One thing i didn’t like about turbo tax is one of the business’s i worked for was based in Canada and when they ask for certain information we couldn’t figure out how to file it correctly for quite a while. Thanks.

  • Sue Burnham

    I’ve been using TaxAct for more than a few years and have been very satisfied. This year there is apparently a software glitch with filing to Maine Revenue Services. We file a joint return and I work in New Hampshire. For 2010 I have a 1099G reporting NH Unemployment benefits. TaxAct is telling me Maine Revenue Services will not accept a NH Federal ID number in the category Unemployment Benefits. Maine Revenue Services cannot help and TaxAct now says :”the developer is working diligently to correct the issue”.

    This is NOT the first year I have had UI benefits from the state of NH, but it IS the first year I’ve had a problem filing.

    • http://www.moneycrashers.com David/moneycrashers

      Sue

      Sorry to hear about your issues…hope it all works out.

      Let me know if there is anything I can do to help, and thanks for commenting

      David

      • Sue Burnham

        Thanks David. TaxAct cleared up the glitch and I was able to submit both Fed and State this morning. Once again, I’ve been very pleased with TaxAct and their speedy response to this issue confirms my loyalty.

        Happy customer !

        Sue

        • David Bakke

          Sue

          As always, glad to be of service. Hope to see more of you here at Money Crashers–I feel we have a lot to offer!!

          David

    • Daniel W Oliver

      Tax Act for 2011 is the worst user unfrendily program yet. I AM A SIX YEAR USER of Tax Act! TOO MANY ERROR REPORTS and flags. NO 1-800 SUPPORT NUMBER. Hung up on Roth IRA completion on a distribution. Flagged and would not help find easy solution. Finished on Turbo Tax in a just a few minuets with the help in the program without any hassel and good explanation of what to do. No comparison hear ! Played with Tax Act For hours but could not complete!!! Don’t waste time and money on Tact Act

  • Bostonian

    Stay way from this software. The technical support is terrible. I called them about a problem and they were rude and also wrong. I later solved the problem myself.

    I paid twice for the software by mistake. I sent them an e-mail and they didn’t reply. I threatened to notify the Better Business Bureau and they refunded my money.

  • Chris S

    Taxact also is not handling asset deprec. correctly. It is not recalculating depreciation of an asset after a loss (not disposed of) , so it is overcalculating depreciation. They say it is not their error though they charge you to bring in old info and warn you they will not honor their guarantee if you make changes to the info brought in from previous years. They have said the developer would possibly change for next year, but of course is not a mistake. Tell that to all those of you this effects. They have since made changes to the program and have wiped-out people’s taxes that had been started. My son had to make one change to his Schedule C. Now he needs to do over, although he already paid for taxes to be brought in and deluxe addition. Nice!

  • Anonymous

    I have been using TaxAct for so many years that I cannot remember exactly how many. Anyway, since I am a loyal user, for last few years, early in the year, I got this offer one week ago:
    TaxACT Online 2011 Ultimate Bundle for $13.95 includes:

    * TaxACT Online 2011 Deluxe
    * 1 free federal e-file
    * TaxACT Online 2011 State
    * 1 free state e-file
    * Additional state returns are $14.95 each
    * Free technical and tax help via email
    You cannot beat this deal. I cannot disagree that sometimes something might be not very clear, but I found always a relatively quick response via email which always explains exactly how to do something. For last years taxes, I was thrilled that TaxAct software keeps track of prior years deductions. I had a huge loss in the 2008 tax year due to the stock crash. I could not deduct much until this year, when the software automatically put the entire huge loss from a few years ago against my big income made last year, thereby greatly reducing the taxes owed for 2010.

    • Daniel W Oliver

      Tax Act for 2011 is the worst user unfrendily program yet. I AM A SIX YEAR USER of Tax Act! TOO MANY ERROR REPORTS and flags. NO 1-800 SUPPORT NUMBER. Hung up on Roth IRA completion on a distribution. Flagged and would not help find easy solution. Finished on Turbo Tax in a just a few minuets with the help in the program without any hassel and good explanation of what to do. No comparison hear ! Played with Tax Act For hours but could not complete!!! Don’t waste time and money on Tact Act

  • Jtygur

    TaxAct doesn’t support the NYS Marriage Equality Act of 2011. Same-sex couples are required to enter code M3 in item G of their IT-201 (NYS income tax return), but TaxAct makes no provision for this.
    Also, we have to fill out a “dummy” joint Federal return in order to file a joint NYS return. It looks like we’ll have to pay TaxAct for both a Federal and a State filing — I’m not certain of this yet, but it’s looking that way.

  • nalabama

    I do not understand why TaxAct needs the TIN/EIN of the institutions that have paid me interest in 2011. The Schedule B instructions do not require this information for 2011. I don’t appreciate being exercised needlessly when I just want to calculate my tax liability for the year.

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