Online tax filers searching for the lowest price often land on TaxAct.com. The service consistently offers some of the lowest price points in the market.
The actual price you’ll pay to file online can be more confusing, though.
Depending on your specific situation, you could ultimately pay more on a platform that publishes lower fees. TaxAct should absolutely be on your short list, but you might also benefit from TaxAct’s competitors.
In this comparison, we’ll take a look at how TaxAct stacks up to top tax software TurboTax, TaxSlayer, and H&R Block to help you make the call.
Overview of TaxAct
Before looking at other leading tax software choices, we’ll go over the basics of TaxAct so you’ll know how they compare to other services.
Here’s a breakdown of TaxAct’s current fee structure. Keep in mind TaxAct could change its prices as the tax season progresses. The same goes for any prices quoted in this post:
- TaxAct Free Plan: TaxAct allows free filing for the simplest federal tax situations, and some forms of retirement income can be reported without paying to upgrade. Despite the name, filing a state return will still cost $19.95.
- Basic+ Plan for $14.95: Taxpayers with dependents or education expenses will need to upgrade to the Basic+ plan. Filing a state return will cost an additional $19.95.
- Deluxe+ Plan for $47.95: If you’re writing off interest, taking advantage of tax credits, or itemizing deductions, you’ll need this plan, and you’ll pay an extra $39.95 for a state return.
- Premier+ for $57.95: TaxAct’s most expensive plan allows self-employed, investors, rental property owners, and people with money in offshore accounts to file. A state return will cost an additional $39.95.
TaxAct has improved its customer service this year, especially for customers who pay the most. For example, if you pay $57.95 (plus $39.95 for state filing) for TaxAct’s Premier+ plan, you can get help from a customer service rep who can see your computer screen.
Across the board, though, TaxAct’s customer service still lags behind the higher-priced services, especially services like TurboTax, which offer access to Certified Public Accountants through video conferencing. Unfortunately, TaxAct’s less intuitive interface makes it more likely taxpayers, especially new filers, will need some extra help.
Taxpayers searching for alternatives to TaxAct will notice other services usually publish higher fees. Your tax situation could prevent you from paying more, though, so don’t let the sticker shock scare you away immediately.
TaxAct vs TaxSlayer
We’ll start with TaxSlayer, another budget-friendly option. Although TaxSlayer’s fees aren’t much higher than TaxAct’s, TaxSlayer spreads its services across its fee structure differently:
- Free: Like TaxAct, you can file a new federal 1040 for free but not if you itemize or use Schedules 1-6. Unlike TaxAct, you can file your state return for free, too, assuming it’s just as simple as your federal return.
- Classic Plan for $17 federal + $29 state: If you’re itemizing this year you’ll need to upgrade at least to a Classic Plan with TaxSlayer. Investors, freelancers, and even landlords can often file at this lowest paid tier which is unusual in the industry.
- Premium Plan for $37 federal + $29 state: The extra $20 you’d pay to upgrade from Classic to Premium simply gets you better customer service, including online chatting with tax pros.
- Self-Employed Plan for $47 federal + $29 state: This additional $10 price hike gives you special guidance if you’re self-employed and have multiple sources of income, which can create some of the more complex income tax situations.
- Ultimate Plan for $57 federal + $29 state: TaxSlayer’s most expensive service offers one-on-one help from a tax pro and bonus features such as audit defense for up to three years and extra protection against identity theft.
TaxSlayer’s Classic plan ($17 plus $29 for state) can handle a wide variety of needs, which means you may be able to pay less with TaxSlayer than you’d pay with TaxAct.
For example, a taxpayer who needs to itemize would need TaxAct’s more expensive Deluxe+ plan but could likely file with TaxSlayer’s cheaper Classic plan. With TaxSlayer and TaxAct, higher priced tiers include better customer service. Filing for free prevents you from getting the most help.
While this pricing philosophy makes a certain amount of sense — simpler tax situations should require less help — customer experience doesn’t always line up so neatly. The services we’ll look at next offer more flexibility.
Choose TaxSlayer if: You have simple to moderate needs and you’d still like to save money.
Choose TaxAct if: You know what you’re doing and you just need an easy way to connect with the IRS and you’d like to save money on user fees.
TaxAct vs. H&R Block
H&R Block pre-dates the internet with its nationwide network of 10,000 brick-and-mortar tax offices. The company has done well with it’s online and desktop tax software programs, too.
H&R Block’s fees are higher than TaxAct’s across the board, but H&R Blocks’ free edition is also open to more taxpayers than TaxAct’s. Here’s a current price breakdown. Again, remember H&R Block can adjust these prices during the tax season:
- Free Edition: Schedules 1-6 aren’t a problem for free filers with H&R Block. The free plan includes your state return, too. You can opt into help from an H&R Block tax pro for $50.
- Deluxe Plan for $49.99 federal + $36.99 state: Unless you need to report capital gains or losses or income from rental property, H&R Block’s Deluxe plan should work for you. This plan also allows Schedule C-EZ, which is enough to help many part-time freelancers write off expenses. For pro help, add another $80.
- Premium Plan for $69.99 federal + $36.99 state: H&R Block’s Premium plan allows the flexibility most freelancers, investors, and independent contractors will need, as long as your write-offs don’t exceed $5,000. For pro help, add $90.
- Self-Employed Plan for $104.99 federal + $36.99 state: Small businesses or larger-scale independent contractors and full-time freelancers will need this level of service. Add on pro help for an additional $80.
H&R Block has upped its customer service game in recent years by connecting online users with the company’s existing army of tax experts set up in strip malls across the nation. But you can still use H&R Block without paying for this kind of extra help.
In fact, even if you don’t opt for pro help, you can still get technical support and access frequently asked questions, calculators, worksheets, and other resources on the site.
If you’re filing a simple return and can get the job done without paying a fee, you can still tack on the company’s best customer service for $50 if you get stumped along the way.
Choose H&R Block if: You need Schedules 1-6 but would still like to file for free, or if you’re looking for expert guidance and don’t mind paying extra for it.
Choose TaxAct if: You want to save money on fees and you’re comfortable working around tax forms.
TaxAct vs. TurboTax
TurboTax by Intuit tops a lot of people’s list for the best overall platform in the market. The service is easy to use and innovative. In many cases, you’ll pay for this ease of use with some of the highest fees in the market.
- TurboTax Free: TurboTax offers free state and federal returns if you don’t itemize. However, you can claim the earned income tax credit and the child tax credit with the free plan.
- TurboTax Live Basic for $89.99 federal + $29.99 state: With this plan, you’re basically paying for customer service since it doesn’t expand the software beyond what you could do with the free plan. The customer service includes on-demand video access to a tax pro online.
- Deluxe for $59.99 federal + $39.99 state: You’ll need this upgrade to itemize deductions, but you still can’t report rental income or report capital gains or losses. For an additional $70, you can add on video access to a tax professional.
- Premier for $79.99 federal + $39.99 state: This tier allows property owners who earn income from rentals and investors who need to report capital gains and losses to file. Get on-demand live video access to a pro for an extra $100.
- Self-Employed for $119.99 federal + $39.99 state: This highest tier lets independent contractors and career freelancers file. Add on-demand video access to a pro for $90 extra.
TurboTax’s free version doesn’t include Schedules 1-6, which means more filers will need to upgrade to the Deluxe version compared to H&R Block.
If you do qualify for free filing, you can still pay your way into some of the best customer service support in the industry. You’ll also have access to TurboTax’s innovations, such as the ability to snap a photo of your W-2 rather than typing in the numbers.
People who know very little about taxes should give TurboTax a close look because the user interface works seamlessly. You can file with almost no knowledge of tax forms.
Choose TurboTax if: You’re a beginner who needs help and you don’t mind paying for quality.
Choose TaxAct if: You’re comfortable working around tax forms and you’d like a basic interface.
What to Look For in a Tax Service
With so many IRS-approved tax software programs now available, you might want to venture beyond these four industry leaders.
If so, be sure you’re getting:
- A Guarantee of Accuracy: You don’t want to be responsible for underpayments, and you don’t want to miss out on a bigger refund. And you want some kind of recourse if the software does make a mistake. TaxAct excels with its $100,000 guarantee, for example.
- Direct Deposit Options: Assuming you’re getting a refund, you’ll get it faster when you give the IRS your bank account number so it can deposit your refund directly into your account. The best software services give you other options for receiving your refund, such as prepaid debit cards, old-fashioned checks, and even savings bonds.
- Simple Data Entry: TurboTax may still be an outlier with its ability to enter W-2 data by taking a smartphone photo, but any service should let you enter your data quickly and easily.
- Good Customer Service: Even if you don’t opt in, you should be sure you’ll have access to customer service if you need it, whether you have a tax question or a question about how to use the software.
- Easy Transfer of Data: A lot of filers don’t want to switch platforms because their current platform already has all their data. The best tax services offer to help you make this transition easier.
Bottom Line: It’s Not All About the Price
Just about everybody likes to save money, so we talk a lot about finding the best and least expensive options for online tax prep.
Ultimately, though, your comfort level with your tax software matters as much as price. All tax filers have different needs.
If you’re accustomed to filling out paper forms the way our parents and grandparents did, any tax software can make tax season easier for you. You’ll have no problem using TaxAct and possibly saving some money along the way.
If you’re new to taxes, a company like H&R Block or TurboTax can make getting your taxes done a much simpler process.
Of course, the ideal would be to have both: a great platform at the best price. So take a look at your tax situation. If you’re a TaxAct user, you may be able to save money while also enjoying a more seamless customer experience.