$29.95
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Pros
Good navigation tools, user interface, and IRS schedule support. Phone and chat help. Thorough review process. Price Lock guarantee. Good mobile experience.
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Cons
Some help links lead directly to IRS documents. Expensive per-state filing.
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Bottom Line
TaxAct Online Plus features an excellent user interface, navigation, and help tools. Furthermore, its low federal e-filing cost makes it one of the best values among tax preparation services this year.
TaxAct Online Plus has probably undergone fewer changes than any other tax software we reviewed since last year. The only major differences are changes in its version lineup. It looks and works much like it has in the last few years, which is to say it's an excellent option for taxpayers. It supports a generous number of IRS schedules (A, B, D, and E), so you can use this version for pretty much any situation except self-employment/small business. Its user experience and help tools are better than those of any other service except TurboTax Deluxe, though its federal version is notably cheaper (state filing costs about the same). TaxAct won an Editors' Choice last year along with TurboTax, but this year the service's lack of substantial changes means the sole award goes to TurboTax Deluxe, which continues to innovate.
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Pricing and Versions
TaxAct broke the price barrier when it introduced completely free online personal tax preparation and e-filing (both federal and state) several years ago. It no longer does so; its free product only covers the 1040EZ and 1040A, and there's a $15 charge to import last year's return. These days, Credit Karma Tax is the only service that supports all the major forms and schedules (both federal and state) for free. Of course, you get what you pay for, and what you're not paying for (and don't get) with Credit Karma Tax is a deep and thorough help system.
TaxAct's product lineup has changed once again, as mentioned. We're reviewing TaxAct Online Plus this year ($29.95 for federal filing, and $37 per state), which is designed for itemizers and individuals with capital gains/losses and/or rental property. If you're self-employed or have a small business on the side (or a farm), you need to use what's now called the Freelancer edition ($39 federal, $37 per state). This version contains Schedules C and
View All TaxAct also offers what it calls the
Wizard Wizardry
TaxAct, like its competitors, is an online version of all those paper documents you would otherwise have to assemble to do your tax preparation. If you have a complicated financial life and have ever tried to complete your return on paper, you know how frustrating and time-consuming it is to keep flipping back and forth between forms and schedules, doing all your calculations, and transferring the correct numbers to your 1040.
TaxAct makes this grueling process more organized and manageable. Like a human being in a tax service office would do, it interviews you to get all the information needed to complete your return, taking you through a lengthy step-by-step wizard. All you have to do is answer the questions on each page before you advance to the next one. Sometimes you have to fill in a number or a few words, whereas other pages ask you to select responses from lists of options.
As you enter information, TaxAct does the necessary calculations and puts your answers onto the appropriate lines on the right forms or schedules. At almost every step of the way, it offers support of one kind or another. After you visit every topic applicable to your situation, TaxAct goes through your return and alerts you to potential problems before allowing you to e-file or print out paper returns to mail. You aren't asked to pay until this point, as is usual with these services.
Early Info
TaxAct has streamlined its account creation and sign-in process; two-factor authentication is unfortunately no longer available, nor do you have to do a picture-matching exercise to sign in. Your first steps, instead, are to create a username and password, enter a code sent by text or email, and choose security questions and answers. The service also asks if you want to import your tax data from last year. TaxAct can bring in that information if you have a PDF file of your 2016 return that was prepared by H&R Block, TaxAct, or TurboTax. This can save you a lot of time and improve the accuracy of your return, too—assuming your data was correct last year.
Assuming you're starting from scratch, TaxAct next has to get some basic information about you up front, such as names and addresses, birth dates, and Social Security numbers. TaxAct does this in a fairly straightforward, serious way. Other services, such as TurboTax Deluxe and (to a less extent), H&R Block Deluxe, try to be a little friendlier and even folksier here and throughout the interview process. This doesn't affect the actual tax preparation, but you may find a friendlier interview can make what can be a trying experience a bit more pleasant.
Then it's on to questions about your family's health insurance situation. The final step before you
Two Tax Paths
So far in the process, using TaxAct only requires clicking the Continue and Back buttons, entering data, and selecting from lists of options. It's easy even in these early stages to know where you are in TaxAct (this will become increasingly more important the deeper in you go). The next step, however, involves a navigational choice.
First, a little explanation: Most personal tax preparation websites use similar navigation tools, though there have been a lot of changes this year. In TaxAct, the main horizontal toolbar at the top is divided into the site's main sections, including Basic Info, Federal, and Review. When you work in one of those areas, the toolbar changes to reflect the subsections found there. So, for example, you'll see tabs for Income, Deductions, Credits, Taxes, Miscellaneous, and Summary under Federal.
Tax programs also generally offer two options (here's the choice mentioned earlier) for moving through the interview process. If your return is simple or you have experience with tax preparation, you can simply select the topics in each area that apply to you from the lists provided via the Quick Q&A Topics section. The main topics here that are relevant to the Deluxe version include Wages and Salaries, Education, and Child and Dependent Care, most of which have associated subtopics. Click any of those, and TaxAct takes you directly to the appropriate Q&A page for that tax situation. When you finish and click Continue, you return to the main page, from which you can choose another Quick Q&A Topic. This works very well, and not every tax website supplies an outline in such detail.
If you're less experienced or want to be sure you don't miss anything, you should click Step-by-Step Guidance. When you work under the Federal tab, you first see the Income Checklist, which lists all income topics. Click the boxes to select just those that apply to you or click on the All of the Income Topics
There are multiple ways to respond to the site's queries. You fill in blanks, click in checkboxes or select from lists, click on Yes or No, and so on. If your employer or financial institution is supported (and many are), you can import data from forms like the W-2 and 1099s. When you add a copy of the 1099-INT (for interest income), for example, TaxAct asks whether you want to enter your data on a reproduction of the form itself or use its step-by-step guide. Either way, it's not confusing to get to the next step. Click on the icon to the right of fields that contain calculated totals, and you can enter the individual items that made up those totals in the table provided, which is for your own information only and not to be filed.
When you finish the income section, you enter information about any estimated tax payments you made and arrive at a summary of all the data you've submitted so far. You can review and edit any entries you've made or just move on to deductions and credits, which are handled the same way as income.
After you complete all of the federal screens, TaxAct transfers applicable information to any state return you must file and helps you complete it. Once you think you've taken care of all pertinent topics, TaxAct runs its exceptional review tool, looking for possible errors and omissions. When it finds one, it displays it on the screen and provides fields for corrections and additions without forcing you to find your way back to the original page—as Jackson Hewitt Deluxe Edition confusingly does.
There's nothing confusing about TaxAct's navigation, and the user interface is aesthetically pleasing enough. But it's not as clean and visually striking as that of TurboTax Deluxe. For software that automates a process as anxiety-producing as personal tax preparation, a compelling interface is essential. Skillful, creative design can make any user experience just a little less draining. And when it comes to sheer usability, TurboTax—which pioneered this simple, wizard-based format for tax preparation services—is just unbeatable again this year.
Help and Cleanup
Excellent built-in help and support are critical components of effective tax preparation software. These applications can't be expected to help extensively with every obscure and complicated tax topic (though they might surprise you in this regard). They should, however, at least pose questions in plain language and provide additional explanations on the screen that answer the most common questions.
You should also have the option to click on hyperlinked words, phrases, or buttons that take you to even clearer, simple guidance for advanced topics. At the very least, these services should at least have a searchable database that puts the best-matched links at the top of the results list. Tax preparation websites that do well in our rankings clarify complex IRS language.
TaxAct has several points in its favor here. It often displays context-sensitive help topics in the right vertical pane. Hyperlinked words and phrases open the glossary to the correct entry (usually). You can click the More Info button where it appears to open a small help window and consult TaxAct's voluminous, excellent TaxTutor Guidance. When you enter a word or phrase in the Search box, the Answer Center opens and displays both explanations—sometimes quite lengthy—and links to related forms and schedules. Finally, phone and chat help are free. Of course, you're much more likely to get a quick response if you file early, before everyone else. That's just one more reason not to be a last-minute e-filer.
TaxAct's answers and hyperlinked help could occur more frequently. Also, the site's help system told me several times that I could read a specific IRS publication (which they provided access to) for more information. These are, of course, by definition accurate documents, but they can be difficult to decipher. The ability to avoid IRS documents altogether is a big argument for using a tax-preparation service in the first place. TaxAct would benefit from more plainly worded guidance on some of its Q&A screens.
An Effective Mobile Translation
Although TaxAct doesn't offer standalone apps, the company has done a beautiful job of using responsive design to translate the desktop version into a solid mobile experience. If you're looking for a dedicated mobile app, consider the TurboTax Tax Return App, which is our Editors' Choice for doing your taxes on a mobile device.
That said, TaxAct provides an excellent experience on mobile devices—we tested it on both Android and iOS. The biggest difference between the desktop and mobile versions involves navigation. Rather than using a horizontal toolbar running across the top of the screen, the mobile version requires you to click an icon in the upper left corner. This opens TaxAct's very thorough site outline. Click on Federal, for example, and a menu displays the Form 1040's major sections. Select a section, and it expands to show you all of the subtopics you can visit. Other than that, TaxAct manages to reproduce its content, navigation system, and help resources, albeit arranged a bit differently in some areas. It's practically as easy-to-use as the desktop version.
Our only complaint relates to the smartphones' numeric keypads. They tend to pop up automatically on many screens that require numerical data, even if you don't plan to enter anything. Other than that, the mobile version functions much like the desktop version. Which is to say, it's very easy to prepare and file your 1040 and related forms and schedules using it.
For more mobile choices, check out our roundup of the top mobile tax preparation apps for this year.
A Safe, Affordable Choice
If you consider its overall value, TaxAct Online Plus is the most economical tax website we've tested. It does lack some of the tax topic coverage offered by the competition at this level, but it hits the most common scenarios. It's also good at most everything—tax schedule support, user interface and navigation, and help. However, it doesn't excel at any of these things to the extent that TurboTax Deluxe, our Editors' Choice for tax software, does.
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