TaxAct
TaxAct
Choosing the Right Program
Tax time – we love to hate it, right? Fortunately, there are programs like TaxAct that make it easy to file your own taxes without missing out on important deductions or making mistakes.
TaxAct helps millions of people file their taxes from home. They offer a variety of programs starting with a free option, but if you have more complicated tax situations, you may want to bump up to a more robust TaxAct option.
If you aren’t sure which TaxAct program is right for you, check out our guide below.
Free Edition
The TaxAct Free Edition is for taxpayers with a simple tax situation. It costs nothing to file your federal taxes, but filing your state taxes is extra. To qualify for the free edition, you must take the standard deduction and have standard W-2 income, unemployment income, or retirement income. If you’re eligible for child tax credits, Earned Income Credits, or the stimulus credit, you still qualify.
Even though it’s free, you still get the protection of TaxAct’s audit risk and problem alerts so you can file your taxes with peace of mind.
What it Includes:
The TaxAct Free Edition includes preparation of your federal taxes. You can import your taxes from last year, get pro tips, and a personalized plan if you have a unique tax situation.
The free version also includes free account and technical support. TaxAct also includes a 100% guarantee that the formulas and calculations are accurate.
Who Should Use It:
You can use the TaxAct Free edition if you have a ‘simple’ tax situation. If you’re self-employed, have a side hustle, or own a house, you’ll need an upgraded version which we discuss below.
The Cost
The TaxAct Free Edition is completely free for one federal return, but it’s $39.95 to file your state return.
Pros
- It’s free
- You can import your prior year’s taxes for free
- TaxAct keeps your information secure and uses top-notch security to ensure it
Cons
- You can’t itemize deductions
- It’s extra to file your state taxes
Deluxe Edition
If you don’t qualify for the Free edition, the Deluxe edition is the next step up and helps a majority of taxpayers. The Deluxe edition focuses on homeowners, families, and individuals with student loan expenses.
What it Includes:
TaxAct Deluxe includes everything in the free version, plus it helps you maximize your savings for more complicated situations.
Here’s what you get with TaxAct Deluxe:
- Multiple options to import your tax documents
- Donation Assistant helps you write off your eligible charitable expenses
- Audit risk reviews
- Help filing your FAFSA for college-bound kids
- TaxAct alerts if they suspect an error or issue
- Help finding the most deductions
- One year access to your return
- Maximum refund promise
- Bookmark questions to revisit them
Who Should Use It:
If you own a home, have children (with childcare expenses), are using the adoption credit, have student loan interest, or mortgage interest, you won’t be eligible for TaxAct Free edition but can maximize your deductions and lower your tax liability upgrading to the Deluxe edition.
The Cost
The TaxAct Deluxe Edition costs $47.95 for federal taxes, and $54.95 to file your state taxes. It seems somewhat steep, but if you maximize your deductions using the program, it may pay for itself.
Pros
- Maximize your deductions
- Have multiple ways to import last year’s taxes and your tax documents for this tax year
- Lower audit risk with TaxAct’s help
Cons
- It costs extra to file your state taxes
- All tax questions are answered in their ‘library’, you don’t have access to live agent
Premier Edition
The Premier edition is an upgrade to the Deluxe edition, offering everything from above, plus more support for stock or real estate investors, or taxpayers with a foreign bank account.
What it Includes:
TaxAct Premier includes everything in TaxAct Deluxe, but it focuses on investors who can have large tax liabilities if they aren’t careful. Understanding what you can write off and how to make the most of your profits often makes the cost of the Premier version worth it.
As TaxAct Deluxe offers, TaxAct Premier ensures you get the most deductions given your income situation to lower your tax liability.
Here’s what else you get with TaxAct Premier:
- Import your data from Turbo Tax or H&R Block
- Easy input of your rental income and questions to help you get the most deductions
- Import your capital gains from stock investments automatically
- See your refund in real-time
Who Should Use It:
Investors need TaxAct Premier. It looks for all possible deductions whether you’re a day trader or you invest in real estate. TaxAct Premier doesn’t leave any stone unturned.
The Cost
Turbo Tax Premier costs $71.95 to file your federal taxes and $54.95 to file your state taxes. With the extent the Premier edition ensures you get all your deductions, you’ll more than make your money back investing in this program.
Pros
- Maximize your deductions by looking over all possibilities given your investment circumstances
- Makes it easy to report rental income or capital gains
- Provides a 100% accuracy guarantee
Cons
- It costs extra to file your state taxes
- Filing taxes as an investor gets complicated, and TaxAct doesn’t provide live chat support to get you through it
Self-Employed Edition
If you’re self-employed, you’ll need tax preparation software that offers the support you need. TaxAct’s Self-Employed edition is for contractors, small business owners, and freelancers.
As a self-employed taxpayer, you have a much more complicated situation that needs the handholding the Self-Employed edition provides.
What it Includes:
TaxAct Self-Employed includes everything in the Premier version, but with a distinct focus on your self-employment income. You’ll get personalized deduction recommendations and help planning your taxes year-round.
Here’s what else you get with TaxAct Self-Employed:
- Year-round support for tax planning so you avoid excessive interest and penalties
- Easy options to report all forms of income including freelancer, business owner, or side gig income
Who Should Use It:
If you’re self-employed you need the Self-Employed version. It’s the only option that not only reports your income correctly but ensures you get every deduction possible for your situation. Self-employed individuals cover both sides of their tax liabilities, so finding every write-off is crucial.
The Cost
TaxAct Self-Employed is the most expensive plan at $94.95, but it offers the same level of support you’d get paying for a much more expensive tax advisor. To file your state taxes, it’s an additional $54.95.
Pros
- Makes claiming self-employment income seem simple
- Ensures you get every deduction possible given your tax situation
- Ensures you don’t have any errors, lowering your risk of inquiries or audits
Cons
- It costs extra to file your state taxes
- Filing your taxes as a self-employed person can be overwhelming even with TaxAct’s support
Bottom Line
Determine which tax program suits your needs the most. Always choose the program that covers all situations you may have to get the most protection and to ensure you get access to every deduction you’re entitled to.