With mere days to file your taxes — the federal tax deadline is April 18 — it may be tempting to turn to tried-and-true industry …
With mere days to file your taxes — the federal tax deadline is April 18 — it may be tempting to turn to tried-and-true industry leaders TurboTax and H&R Block, and indeed, those products top our list of the best tax software. If you’re confident about doing your taxes yourself and don’t need live support, however, TaxAct provides comparable service at a discounted price. While not as polished as leading tax software, TaxAct combines an exhaustive question-and-answer process for completing your tax return combined with an impressive Answer Center providing useful information for all sorts of tax situations. TaxAct provides four levels of online tax preparation — Free, Deluxe, Premier and Self-Employed. Each of the plans is defined by the number of included IRS forms. Simple returns can use the Free plan, while those with mortgage interest or child-care deductions will need to upgrade to Deluxe. Investment income requires the Premier plan, and freelancers with multiple 1099 forms will need to shell out for the highest level, Self-Employed. TaxAct covers almost all tax situations and is cheaper than the leading products, but the trade-off is less integrated support and no live chat. If you don’t need live help during your tax return, TaxAct could be a good value. TaxAct provides tax preparation software online at four different price levels: Free ($0), Deluxe ($47), Premier ($70) and Self Employed ($95). Each requires additional fees for state returns — $40 per state return in the Free tier, and $55 per state return in Deluxe, Premier and Self Employed. TaxAct Free’s restrictions are fairly generous compared with its competitors. You can claim the earned income tax credit, child tax credit and recovery rebate. It also supports dependents, unemployment and retirement benefits and married filing separately. You can only take the standard deduction, but you can receive education credits and take the elderly and disabled credits available in Schedule R. TaxAct Free only lets you file a free federal tax return. Your state return will cost $40. The Deluxe tier of TaxAct adds a long list of IRS forms, including itemized deductions (Schedule A), child and dependent care expenses, casualty and theft loss, health savings accounts, home business expenses and other credits like mortgage interest, home energy and electric vehicles. TaxAct Deluxe costs $47 for the federal return and $55 for each state return. TaxAct Premier mostly adds a range of common income types. If you have capital gains from the sale of stock or any other investment income, or you earned money from rental property, you’ll need to upgrade to TaxAct Premier. Filers who earned money from the sale or bitcoin or other cryptocurrencies will also need TaxAct’s Premier tier, as will those with investments in foreign banks. TaxAct Premier will currently run you $70, and another $55 for each state return. The top tier of TaxAct is reserved for those who received self-employed income (gig workers, freelancers and small business owners) or farmers. If neither applies to you, you should move down to Premier or lower. You can purchase TaxAct Self-Employed for $95, with another $55 for each state return.
