TaxAct Review 2024: Free Online Tax Software

TaxAct can be a great fit for taxpayers who are skeptical of other tax filing software and don’t mind paying for their state returns.

Ultimately, it’s more affordably priced than many of its competitors, especially for Self-Employed filers. 

TaxAct’s DIY options require some sacrifices and assume a basic level of tax-filing familiarity if you don’t opt for Xpert Assist, but at least it won’t leave you much lighter in the wallet after you pay your tax bill.

TaxAct Plans & Pricing

TaxAct is significantly cheaper than its two big-name competitors. However, its free version really only works for the most straightforward tax situations. Its support infrastructure also inspires less confidence than nervous filers might like. 

However substantial improvements to usability make it a serious alternative to gold-plated DIY products and full-service CPAs.

TaxAct Offers Four Main Plans for Individual and Joint Filers:

• Free
• Deluxe
• Premier
• Self Employed

Each plan’s pricing is subject to change and may increase as the filing deadline approaches, so it’s in your best interest to file as soon as you have all the necessary documentation.

Once you’ve collected all your documents, the only thing left to do is decide which plan is right for you.

1. Free Plan

TaxAct’s most basic plan is free for federal returns only. State tax returns start at $39.95 each, but may cost as much as $54.95. 

This plan caters to individual filers with straightforward tax situations. But its functionality and features, such as prior-year return importing and phone support, are somewhat limited.

Key Features of the Free Plan:

• Simple Filing. The free version supports simple tax situations. If you earn all or the vast majority of your income from regular employment and don’t need to itemize your deductions, this version is probably all you’ll need. Importantly, it covers the earned income tax credit and child tax credits but not dependent care credits. If you have a more complicated situation that includes investment income, itemized deductions, or self-employment tax, you need to upgrade.
• W-2 Importing. You can import W-2s from your employers, saving you the time necessary for manual entry.
• At-a-Glance Help During the Filing Process. TaxAct’s filing system boasts a useful support panel on the right sidebar next to the fields you use to complete your return. The panel’s search feature can help you find answers to quick questions. But it’s worth noting that clicking on individual results to get more detail takes you to TaxAct’s dedicated support system (and temporarily away from your return), making it less user-friendly than other tax software’s help features.
• Unlimited Tax and Technical Support. TaxAct’s email and phone support system includes unlimited help with tax-related questions and technical platform issues. TaxAct’s support staffers aren’t necessarily licensed accountants and may not be able to answer complicated tax questions, but they’re nevertheless authorized to handle general tax issues and provide basic advice and guidance for uncertain filers.
• Personalized Financial Analysis. Known as BluPrint, this complimentary, automatically generated report uses your tax return (including deductions, investment earnings, and business activities) to recommend opportunities to save on taxes and make changes that may improve your financial situation in the future.

2. Deluxe Plan

This plan costs $24.99 to file your federal return early in the tax season, then around $40 to $45 as the filing deadline approaches, depending on timing. It costs $44.99 per state return.

It’s a much more robust program that can handle moderately complicated tax situations, including itemized deductions and investments. But it’s often insufficient for small-business owners and others with very complex taxes. The Deluxe Plan includes everything in the Free Plan plus a few more key features.

Key Features of the Deluxe Plan:

• Itemized Deductions. If you choose to itemize your deductions, which is a common practice for those with more complicated tax situations, such as homeowners and parents, you need to file a tax form known as Schedule A.
• Form 1040 Schedules 1 Through 6. This plan supports IRS Schedules 1 through 6, covering various types of income, credits, and tax.
• Donation Assistant. This useful mobile app lets you track charitable contributions throughout the tax year. It also helps track the fair market value of noncash donations, such as clothing, vehicles, and furniture. If you’ve kept paper records of these donations instead, you can also access Donation Assistant through your desktop TaxAct account. You can add to your Donation Assistant list throughout the year following your filing date.

3. Premier

This plan starts at $34.99 to file your federal return early in the tax season, then around $74.95 as the filing deadline approaches, depending on timing. It costs $44.99 per state return.

Premier is designed for those with complex tax situations not adequately addressed by lower-priced plans, such as investors and rental property owners. The Premier Plan includes everything from the Deluxe Plan plus a few other key features.

Key Features of the Premier Plan:

• Interest and Dividend Income. If you earned more than $1,500 from interest or ordinary dividends during the tax year, you need to file a tax form known as Schedule B.
• Capital Gains. If you earned capital gains income from the sale of an asset, such as a publicly traded security, you need to file Schedule D.
• Rental Property Income. If you earned rental or royalty income from owned real estate, you need to file Schedule E.
• Foreign Bank and Financial Accounts. This plan accommodates income from foreign deposit and investment accounts.
• Priority Support. This plan comes with priority support from TaxAct’s in-house tax experts. Features include a dedicated phone line with screen-share capabilities and in-app chat functionality.

4. Self-Employed Plan

This plan costs $64.99 for the federal return early in the tax season, then around $85 to $95 as the filing deadline approaches, depending on timing. It costs $44.99 per state return.

It’s more comprehensive than Premier, making it ideal for those with complex or unusual tax situations, such as solopreneurs and small-business owners. Virtually all IRS tax forms and schedules are available. The Self-Employed plan includes everything from the Premier Plan plus a few other key features.

Key Features of the Self-Employed Plan:

• Small-Business and Self-Employment Income. If you earn the bulk of your income from contract or consulting work or are the proprietor of a small business, you need to file Schedule C and pay self-employment tax.
• Farm Income. If you earn income from farming activities, you need to file Schedule F. (If you earn rental income from farmland you own but don’t materially participate in farming activities, you can file Form 4835 with Schedule E.)
• Year-Round Tax Planning Guidance. TaxAct’s team is available year-round for help with tax planning, a valuable perk for self-employed people who need to pay quarterly estimated taxes or make contributions to retirement plans like solo 401(k)s or individual retirement accounts.
• Deduction Maximizer. This step-by-step guide helps self-employed filers claim every tax deduction they’re entitled to. It’s built into the prep interface, so you might not even notice it’s running.

Less Common Plans Offered

Less common products for business owners and others with very complex tax situations include:

• Estates & Trusts, a pricier option for taxpayers with income from trusts or estates
• Distinct small-business tax products for various legal business structures, including sole proprietorships, partnerships, S-corporations, C-corporations, and tax-exempt organizations
• Online tax prep and e-filing solutions for independent CPAs

Estates & Trusts

This plan costs $124.99 for your federal return and $54.99 per state return. It’s designed to provide additional support for customers who need to file IRS Form 1041 and related forms, so it may not be necessary if your tax situation doesn’t involve income from a trust or estate.

There’s a separate set of interview questions devoted to trusts and estates, so you don’t have to worry about completely winging it.

File Your Taxes with TaxAct

Small-Business & Tax-Exempt Organization Packages

TaxAct has four additional packages designed for small-business filers with complex tax situations and one for tax-exempt organizations.

The Sole Proprietor plan costs $64.99 for federal returns early in tax season, then $85 to $95 as the filing deadline approaches, depending on timing. State returns cost $44.99 per state. 

The three other small-business plans and tax-exempt organization plans, which correspond to different legal business structures, cost $109.95 for the federal return and $44.95 per state. That’s several hundred dollars cheaper than hiring a human CPA.

Plans Available for Small Businesses and Tax-Exempt Organizations:

• Sole Proprietor. This plan includes support for IRS Form 1040 and Schedule C and is ideal for those who are self-employed as well as freelancers and contractors. This package is similar to Self Employed, and the two can be used interchangeably by sole proprietors without employees.
• Partnership. This plan includes support for IRS Form 1065 (U.S. Return of Partnership Income) and a host of associated forms commonly used by partnerships.
• C Corporation. This plan includes support for IRS Form 1120 (U.S. Corporation Income Tax Return) and associated forms.
• S Corporation. This plan includes support for IRS Form 1120-S (Income Tax Return for S Corporations) and associated forms.
• Tax-Exempt Organization. This plan includes all the support necessary to file an informational return under federal income tax exemptions outlined in Sections 501(a), 527, and 4947(a)(1) of the tax code.

Xpert Assist & Xpert Full Service

All TaxAct plans come with a complimentary service called Xpert Assist, or you can upgrade for more assistance called Xpert Full Service.

1. Xpert Assist

All TaxAct plans come with a complimentary service called Xpert Assist.

Xpert Assist entitles you to on-demand access to TaxAct’s in-house tax experts. Just click on the Xpert Assist icon in the tax prep interface and enter your question. As soon as they’re able, a TaxAct tax expert will answer it. 

Xpert Assist includes prefiling review as well. If you wish, you can tap an expert to look over your return and ensure you haven’t made any mistakes or omissions.

2. Xpert Full Service

If you need more assistance, consider upgrading to Xpert Full Service, a totally hands-off prep option that finds licensed CPAs, enrolled agents (EAs), and tax specialists doing your taxes for you. 

The process is simple. You just upload your documents securely, answer any questions from your expert, and review your return once it’s prepped.

Like TaxAct’s DIY service, Xpert Full Service comes in four distinct plans: Basic, Deluxe, Premier, and Self-Employed. Pricing starts around $100 for Basic Full Service and rises to about $270 for Self-Employed Full Service — still much less than traditional CPAs.

Additional Features of TaxAct

In addition to its free and paid tax filing packages, TaxAct’s most notable features include free ways to access your information and special protections against tax problems.

1. Accuracy & Maximum Refund Guarantee

TaxAct guarantees the accuracy of all returns prepared with its software.

TaxAct also has a maximum refund guarantee, which is different from its accuracy guarantee. If you receive less than the maximum refund you’re otherwise entitled to or get audited due to an error in TaxAct’s software, TaxAct will pay the refund difference or cover any audit-related liability, up to $100,000.

The maximum refund guarantee also applies if you owe money to state or federal revenue collectors. If you pay more than you should due to an error on TaxAct’s part, TaxAct pays the difference.

2. Tax Return Status App

TaxAct offers a slick iOS and Android app that provides status updates on your federal and state taxes (including whether the IRS and your state treasury have accepted them) and helps you estimate how long it should take to get your refund.

It’s free for anyone to download and use (even if you don’t use TaxAct to file). The federal government also provides online updates to your return’s status and estimated refund arrival dates. But TaxAct’s app is far more mobile-friendly than the IRS’s website.

3. Prior Year Returns

If you want access to your TaxAct returns from the past three years, you can do so for free through your account dashboard. That’s useful for filers who need to amend a previously filed return due to an issue such as an IRS audit and folks who simply need to access accurate completed returns.

4. Guaranteed Pricing With Auto-Enroll

TaxAct’s Auto-Enroll service lets you lock in your return’s price once you create your account and begin your return — even if you don’t complete your return in a single sitting. That’s useful if TaxAct decides to raise its prices before or partway through the current tax season.

5. Audit Defense (Protection Plus)

TaxAct offers this benefit in partnership with Protection Plus, a third-party provider. You must purchase Protection Plus when you file, but you can cancel for a full refund within 30 days of purchase as long as you haven’t already received an audit notice. Pricing is subject to change, but the line-item cost for Protection Plus has never exceeded the cost of a Self-employed plan.

Protection Plus covers you for as long as the IRS can audit your state and federal returns. It connects you with tax professionals who handle all correspondence and discovery, helping to interpret IRS notices and requests and direct negotiation of penalties and potential settlements with the IRS or state treasuries.

TaxAct User Experience

All of TaxAct’s packages and services are rated well internally and externally.  Its app currently holds a 4.4 out of 5-star rating on the iOS app store and a 3-star rating on the Google Play store. 

As you navigate the tax filing process, the software will prompt pop-up messages and other opportunities to better understand the context for certain questions. If you’re totally new to filing your taxes or have a complex filing situation, these messages can leave a lot to be desired. 

TaxAct makes it easier to file your taxes by walking you through it one step at a time. While you can file your taxes by hand or by mail, you may not easily decipher between required and optional lines on all the necessary forms. 

TaxAct Customer Support

TaxAct offers general customer support by phone during business hours. The business operates on Central Standard Time (CST) between 8 AM and 5 PM. It’s closed on weekends and some federal holidays.

Customers seeking tax advice will be better suited for the Tax Xpert Assist upgrades. With this option, customers can request a phone call back with one-on-one support so they can get personalized guidance for their unique financial circumstances. 

For customers who would rather skip the add-ons, TaxAct has a wealth of online resources, including free calculators, browser extensions, checklists, and a blog explaining complex tax topics.

Advantages of TaxAct

TaxAct has several core advantages for taxpayers looking to save time and money. These sharpen its value relative to other well-known DIY tax prep platforms.

• Affordable at All Service Levels. TaxAct is more affordable than many of its competitors. Its most expensive federal package for individual filers, Self-employed, costs less than $100 for the federal return and less than $45 for each state return. Contrast that with TurboTax. Its highest-priced plan approaches $400 for your federal return.
• Not as Promotional as Competing Platforms. TaxAct’s website has a laid-back layout and tone. If you try to do something your current plan doesn’t support, the system politely prompts you to upgrade. TaxAct doesn’t constantly remind you of value-added services via jarring pop-ups or ad screens. If you’re interested in them, you can simply find them on each plan page.
• Guaranteed Pricing With Auto-Enroll. TaxAct’s price guarantee may be useful if you’re self-employed or otherwise have multiple sources of income. You may not be ready to file your taxes until mid-March or later after all the necessary forms and statements trickle in. Weeks may pass between the first time you sign in to your tax preparation account and the day you complete your state and federal returns — during which TaxAct might decide to raise its prices. If you’re already price-locked, you don’t have to worry about an unpleasant increase in filing fees.
• Helpful Editing Functions During the Import Process. TaxAct’s import feature lets you edit information on the previous year’s return before overlaying it onto the current year’s. That’s very helpful if you’ve recently experienced a life event that changes your basic information, such as moving, getting married, or buying a new house.
• Human Support Is Better Than Some Competitors. The quality of TaxAct’s human support team has improved markedly over the years. Today, all paying customers have access to complimentary in-app chat or live phone support, and everyone has access to in-house tax experts through Xpert Assist. 
• Direct Access to Prior-Year Returns Comes Standard. TaxAct includes access to prior-year returns in your filing fee. If you need to refer back to an old return in preparation for an audit or for any other reason, you don’t have to pay extra.

File Your Taxes with TaxAct

Disadvantages of TaxAct

TaxAct has several disadvantages, including not always being the most user-friendly tax software. For some filers, they can make other options more attractive.

• No Free State Returns. TaxAct doesn’t have a free state filing option. No matter your chosen plan, you have to pay something to file your state return. Pricing starts around $40 per state return in the Free plan and rises to about $45 per state return in higher-priced plans.
• Text Support System Can Be Confusing. TaxAct’s customer support apparatus provides a lot of detail, almost to the point of being overwhelming. The help section is a hodgepodge of semi-related topics, and the search feature doesn’t always return relevant results. That’s not optimal for busy filers squeezing in tax prep between everything else they’ve got going on.

How TaxAct Stacks Up

TaxAct isn’t the only online tax prep product around. See how it compares to TurboTax, perhaps the best-known operator in the space.