TaxAct Review for 2020
TaxAct is a tax preparation services company that provides both online and software-based tax filing services for individuals and businesses. You can file your federal taxes for free using the service, and you’ll have to pay $19.95 to file state taxes.
TaxAct offers a variety of different tax filing plans to choose from. So, regardless of your tax situation, you should be able to find something that meets your needs.
Read on to learn everything you need to know about TaxAct, including how much it costs, the services it provides, answers to frequently asked questions, and more.
TaxAct was founded in 1998 and is located in Cedar Rapids, Iowa. To date, the company has processed over 65 million tax returns. Quite a feat!
TaxAct is also a member of the IRS Free-File Alliance, which is an agreement between the IRS and private corporations to facilitate free tax-filing programs to U.S. taxpayers.
All of TaxAct’s filing services come with the following benefits:
Online Access to Returns
Customers are able to access their tax returns for up to seven years after their taxes are filed.
No Charge for Customer Support
A cool feature of TaxAct is that customers across all tax plans have access to free customer support. That said, the type of customer support you have access to depends on the plan you choose (more on that later).
Maximum Refund and 100K Accuracy Guarantee
TaxAct is so confident that its platform will provide an accurate return that they offer an aggressive Maximum Refund and $100K Accuracy Guarantee. In the unlikely event that your taxes are filed incorrectly, TaxAct will refund any charges you might have incurred—no questions asked.
What’s more, TaxAct will also cover the difference (up to $100,000) if the IRS determines you owe money as a result of an error (caused by TaxAct’s platform). Since you’re probably not going to end up owing $100,000 to Uncle Sam, this means that TaxAct will likely pay for any mistakes.
Importing Prior Year Returns
If you’ve previously filed your taxes with a TaxAct competitor, the company makes it easy for you to import your tax data from 1040, 1040A, or 1040FZ forms you’ve submitted in the past.
Now, let’s take a look at the different tax filing plans that TaxAct offers.
TaxAct Online Plans
Online Free Edition
The TaxAct Online Free Addition —also referred to as “I ❤️ Free”— enables customers to file their federal taxes for $0. State filing costs an additional $19.95. This plan is ideal for those who have a relatively simple tax situation and don’t need to itemize deductions.
With that in mind, if you want to deduct mortgage interest or childcare expenses, for example, you would have to go with a different option.
The TaxAct Online Basic+ Edition offers the same services like the free edition but in a way that’s tailored to those who might be filing with dependents or would like to deduct college expenses. Basic+ customers have access to unlimited customer support over email.
The Basic+ plan costs $14.95 for federal returns and $19.95 for state returns. Not too bad for some extra assistance if you need it.
TaxAct’s Online Deluxe+ Edition is designed for those who have slightly more complex tax situations. In addition to the same basic offerings as the free and Basic+ addition, Deluxe+ allows you to itemize your deductions, such as homeowner expenses, health savings account (HSA) contributions, and moving expenses, among other things.
Deluxe+ customers also have access to unlimited one-on-one phone support. The Deluxe+ plan costs $47.95 for federal taxes and $39.95 for state taxes.
Tax Act’s Online Premier+ Edition is designed for even more complex tax situations. If you own stocks or rental properties, for example, you will likely want to upgrade to this plan.
Premier+ customers can also use TaxAct’s nifty Stock Assistant tool, which makes it easier to pay taxes on capital gains.
Further, should any technical issues or questions arise, Premier+ subscribers can access better customer support through real-time chat, both in-app and on their website. The Premier+ plan costs $57.95 for federal taxes and $39.95 for state taxes.
If you’re an independent contractor or if you’re self-employed, you’ll need to file Form 1099-MISC—and maybe even several of them, depending on how many companies you work with. If you want to do that with TaxAct, you’ll have to upgrade to TaxAct’s Online Self-Employed+ Edition.
With tools like Deduction Maximizer, the Self-Employed+ plan helps self-employed individuals and entrepreneurs minimize their tax liability and maximize their returns. This plan is a bit more pricey, carrying a $77.95 price tag for federal taxes and a $39.95 price tag for state taxes.
TaxAct Download Plans
If you prefer to file your individual tax returns using tax software—instead of using an online web portal—you may be interested in looking into TaxAct’s download plans. Each one of these plans allows for five federal e-files and includes the same main features as their corresponding online plans.
The catch? The download plans come at a slightly higher cost. There’s also no free download edition. Here’s a quick summary of TaxAct’s download plan costs:
- The Basic Download Plan: costs $24.95 for federal taxes while state taxes cost an additional $39.95.
- The Deluxe Download Plan: costs $87.90 for federal returns and includes one state return.
- The Premier Download Plan: costs $97.90 for federal returns and includes one state return.
- The Self-Employed Download Plan: costs $117.90 for federal returns and includes one state return.
TaxAct Business Tax Plans
TaxAct also offers tax preparation services for almost any type of business. Similar to their individual plans, TaxAct’s business plans are available both online and within their proprietary tax software.
At the time of this writing, the cost for TaxAct’s online and software plans are about the same when accounting for both federal and state returns. Here’s a rundown of TaxAct’s business plans:
- TaxAct Sole Proprietor. This plan is designed for sole proprietors and self-employed business owners. TaxAct Sole Proprietor costs $69.95 for federal taxes and $39.95 for state taxes.
- TaxAct Online Business 1065. This plan is designed for customers that are members of a partnership or LLC. TaxAct Online Business 1065 plan costs $69.95 for federal taxes and $39.95 for state taxes.
- TaxAct Online Business 1120. This plan helps customers file C corporation tax returns. It costs $69.95 for federal taxes and $39.95 for state taxes.
- TaxAct Online Business 1120S. This plan helps customers file S corporation tax returns. It costs $69.95 for federal returns and $39.95 for state returns.
Is the TaxAct Website Good?
Yes. The TaxAct website is good—from what I can tell. However, I’m seeing some relatively low reviews about the company on Consumer Affairs and SiteJabber. As always, it’s important to take online reviews with a grain of salt. But you still might want to look into those reviews before you decide to move forward with TaxAct’s services.
How Much Does TaxAct Charge to e-file?
It depends on your tax situation. Here is a summary of TaxAct’s fees:
|Plan Name||Federal Fee||State Fee|
|Online Free Edition||$0||$19.95|
|Deluxe Download||$87.90||$0 (for one return)|
|Premier Download||$97.90||$0 (for one return)|
|Self-Employed Download||$117.90||$0 (for one return)|
Is TaxAct Free for State Taxes?
No. You’ll always have to pay to file your state taxes with TaxAct. The fees to file state taxes range from $19.95 for Online Free and Online Basic+ plans up to $39.95 for Online Deluxe+ and Online Premier+ plans.
How Many Returns Can I File With TaxAct?
Five returns are the maximum amount of returns you can file with TaxAct. This is because the IRS law states that individuals can only file up to five returns.
Pros & Cons of TaxAct
Most Tax Situations Covered
- TaxAct offers plans that cover almost any type of tax situation. So whether you’re single and want to file your federal taxes for free or if you own a business and want to maximize your business deductions, TaxAct has a plan for you.
- TaxAct’s $100K accuracy and maximum refund guarantee might give some added peace of mind to those who are skeptical about filing their taxes online.
Online and Software Options
- TaxAct offers both online and software editions to their plans while some of their competitors are online-only.
More Expensive than Some Competitors
- There’s no avoiding a state filing fee—but there is with TurboTax. Also, TaxAct’s free edition only accommodates simple tax situations. By comparison, FreeTaxUSA offers many more features with its free edition.
- I haven’t personally filed my taxes with TaxAct. However, it appears that they don’t have the best customer satisfaction rating (as I briefly mentioned above). If you’re looking to file your taxes with a larger, more established company, you might want to look into TurboTax or H&R Block, for example.
Is TaxAct Right for You?
Filing your taxes is one of the most significant financial steps you’ll take each year. Do it the wrong way, and you could potentially owe thousands to the IRS. Or worse, you could get slapped with an audit. With that in mind, it’s important to choose carefully when it comes to trusting a company to handle your tax returns.
If you’re looking for a simple and relatively inexpensive online platform, TaxAct might be worth your consideration. Most tax situations will be covered and they offer a bold $100k accuracy guarantee. In addition—depending on the plan you choose—there are different levels of customer support that you’ll have access to.
On the other hand, if you’re looking to save as much money as possible with your tax returns, you might want to consider a more affordable alternative, such as FreeTaxUSA. Also, if you’d like the option to have a certified CPA review your returns, you probably want to look into a service like H&R Block.
I hope this post helps you make the right decision. Best of luck!