TaxAct Review 2023: A Solid and Frugal Tax Filing Option
Even with the possibility of a refund dangling in front of us, most of us hate to do our taxes.
Online tax prep and filing services significantly ease the burden without paying personal-accountant-level dollars. But of the many available tax preparation companies, which is the best?
In this review, we’ll cover TaxAct, one of the lesser-known income-tax filing programs — but a frugal filing option you’ll want to check out.
Here’s what you need to know about TaxAct.
How Does TaxAct Work?
TaxAct offers DIY online tax software that helps you file your tax returns neatly, completely and accurately. Even if you’re a tax whiz, having a guide streamlines the process and could save you time and money. These services scan hundreds of credits and deductions to ensure you get the biggest refund (or lowest tax bill) possible.
Rather than inundating you with options, tools and features, this program is all about getting down to business and getting your taxes done, as quickly and cheaply as possible.
TaxAct offers four pricing tiers based on your tax situation: free, Deluxe, Premier and Self-Employed. Here’s everything you need to know about each (current as of December 2022 and subject to change).
If you’re a “simple filer,” you can take advantage of free preparation for federal and state returns with TaxAct’s basic product.
Beginning January 3, all tiers include help from a live professional over the phone, in case you need a little more personalized guidance. There is also the option to share your computer screen during the call to answer questions. And for extra peace of mind, TaxAct offers a quick free review of your return just before you file.
Cost: Free to file a federal return, plus $4.95 per state tax return.
TaxAct Deluxe offers everything you get with the free version as well as coverage for itemized deductions, mortgage interest, real estate taxes, student loan interest, Health Savings Accounts (HSAs) and adoption credits.
Cost: Starts at $24.95, plus $44.95 per state return.
TaxAct Premier covers all the basics from the Deluxe version, plus options for investors, people earning royalties or K-1 income, rental property owners and foreign bank account holders.
Cost: $34.95, plus $44.95 per state return.
If you’re a freelancer or small business owner, you already know you’re going to be paying more in taxes — and that may mean you need more support to fill out your return accurately.
TaxAct Self Employed customers get everything at the Premier level, as well as the ability to calculate personalized business deductions, calculate depreciation and access year-round planning resources. You’ll also get prioritized support, screen sharing and phone conversations with live tax specialists.
Cost: $64.95, plus $44.95 per state return.
All TaxAct customers get access to its suite of basic features, guarantees and goodies. Those include:
Tax Pro Assistance
Through Xpert Assist, all filers — even free filers! — get access to help from a live professional over the phone, in case you need a little more personalized guidance about your tax situation. Unlike most competitors, TaxAct charges no additional fee for this feature.
If you want a tax pro to take all the work off your hands, you can opt for Xpert Full Service. You’ll upload your documents online, the expert will fill out the paperwork, and you’ll review it together before they file it for you. Full Service costs are tiered just like the DIY versions:
- Basic: $99.95 including a state return.
- Deluxe: $169.95, plus $44.95 per state.
- Premier: $249.95, plus $44.95 per state.
- Self-Employed: $279.95, plus $44.95 per state.
No matter who did your taxes last year, TaxAct makes it easy to import your information — including data coming directly from H&R Block or TurboTax.
While TaxAct might be simpler than its more expensive cousins in most ways, it’s the only one of the three that offers a FAFSA guidance worksheet.
TaxAct is confident in its ability to meet your tax needs, and it backs up that confidence with its $100k Accuracy and Maximum Refund Guarantee.
If an error means you get a smaller refund or larger tax bill than you should have, the company will reimburse you for additional taxes and penalties owed due to its mistake up to $100,000, as well as refund your TaxAct fees.
This $100,000 guarantee extends to those who are audited after filing with TaxAct. You can submit “reasonable,” documented, audit-related expenses, and the company will reimburse you, again, up to $100,000.
Finally, if you’re not totally satisfied with your TaxAct product for any reason, you can discontinue using it before completing your return and paying the fee. You can request a full refund within 30 days of receipt to get your money back. You can’t get a refund after you’ve printed or e-filed your return.
Mobile App for Apple and Android
Eligible filers can pay their TaxAct filing fees with a portion of their refunds to avoid an out-of-pocket cost.
This option is available to customers who are selecting to receive a direct deposit and have an expected refund of $100 or more.
You’ll pay an additional fee for this service: $17.99 if you’re receiving your refund payment by direct deposit or $9.99 if you’re receiving it on a PayPower card.
Protection Plus Audit Defense
For TaxAct Professional users (tax pros filing taxes for clients), TaxAct works with Protection Plus to provide audit assistance and tax debt relief services for clients, regardless of where you filed. TaxAct covers your tax return for three full years and provides assistance with both State and Federal audits.
Price Lock Guarantee
Most years, TaxAct offers an option to auto-enroll your return before the tax season starts to lock in the lowest price of the season — because prices fluctuate throughout the season and tend to be highest closest to Tax Day.
You can also nab that low price by paying for the product early in the season, even if you’re not ready to file yet.
TaxAct pricing is somewhat simpler than competitors, which means you’re less likely to be surprised — but you have less choice to customize. To prepare and file your tax returns through TaxAct, you’ll pay a fee for the filing program, plus additional fees for state filing.
Unlike H&R Block and TurboTax, you can’t pay to upgrade to live tax pro help.
- Product fee: Free to $64.95, depending on tier.
- State filing fees: $4.95 or $44.95 per state return, depending on tier.
TaxAct: Pros and Cons
What makes TaxAct stand out — in good and bad ways? Here are some of its benefits and drawbacks:
- Affordable: For filers with more complicated taxes, TaxAct is less expensive than most competitors, including for live help from a tax pro.
- Ease of use: TaxAct’s website is easy to navigate, and a clickable questionnaire makes it easy to figure out which product is right for you based on your tax information.
- FAFSA help: TaxAct offers a useful FAFSA guidance worksheet to make tax time a little less stressful for students.
- No personalized audit support: TaxAct offers less robust, personalized audit support than TurboTax or H&R Block, though you are covered for mistakes by its $100,000 guarantee.
- No refund advance: You'll have to wait to receive your refund on the government’s schedule.
- State filing is pricy: For most filers, TaxAct’s state filing fees are higher than competitors’, and it doesn’t let you file state taxes for free through its free tier, as most competi
Remember, you can always file federal taxes for free, if you’re eligible, through the IRS Free File portal. This service is available to filers who earned $73,000 or less (for tax year 2021), and the page also links to free fillable tax forms for earners at all levels.
Frequently Asked Questions (FAQs) about TaxAct
We’ve rounded up answers to some of the most frequently asked questions about TaxAct.
If you’re after the very best bang for your buck, TaxAct is a hard act to beat. It’s the most affordable of the popular online options, and you even get access to live help for no added cost. If you’re looking for a tax filing platform that’s easy to navigate while still offering all you need to get the job done, TaxAct may just be the pared-down prep program you’re looking for.
Yes! TaxAct is the tax prep product of the Iowa-based software company TaxAct Holdings, Inc., which has been producing the product since 1998. TaxAct is a member of the Free File Alliance, a public-private partnership with the IRS to offer free tax filing to millions of U.S. taxpayers.
You can get free tax filing through TaxAct in two ways: Access its Free File program through the IRS landing page and meet the qualifications, or sign on through TaxAct’s home page and use its Free version to file a simple return. Like its competitors, TaxAct offers several tiers for filers based on various tax situations, but you’re entitled to free federal filing if you use the IRS Free File option and meet the requirements. You’ll still pay a $44.95 fee to file a state return.
Like its competitors, TaxAct offers an accuracy guarantee to ensure your return includes all required information and all possible deductions and credits. If you calculate a bigger refund or lower tax bill with another service, it’ll reimburse you up to $100,000.
TaxAct and TaxSlayer offer comparable services for simple tax filers. TaxSlayer’s fees are significantly lower, but it’s lighter on features than TaxAct.
Contributor Dana Miranda is a Certified Educator in Personal Finance® who has written about work and money for publications including Forbes, The New York Times, CNBC, Insider, NextAdvisor and Inc. Magazine. Contributor Caroline Gaspich contributed to this report.