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TaxAct 2022 (Tax Year 2021) – Review 2022

TaxAct Deluxe has roots that go back to the 1990s. It’s a reliable and thorough tax preparation service with a large potential audience of taxpayers, primarily W-2 earners who want to itemize. Since we last reviewed it, the company has improved the user experience and enhanced existing features like ProTips, Deduction Double Check, Deduction Maximizer, and data-importing tools. Other new features will be announced soon, so be sure to check back for an update to this review.

Note that we haven’t assigned a rating to TaxAct yet, as we are still in the process of evaluating the competition. Not to worry, we’ll return to this preview before tax time.

How Much Does TaxAct Cost?

TaxAct broke the price barrier when it introduced completely free online personal tax preparation and e-filing for both federal and state several years ago, but it no longer offers that. There still is a free version, but it doesn’t support schedules A–F. The major topics it includes are W-2 income, college expenses, Earned Income Credit, Child Tax Credit, retirement income, and unemployment. State returns are no longer free if you choose the free federal filing. It now costs $39.95 per state filed.

The next step up is Deluxe, which is the version I tested for this review. It’s $44.95 (that’s the list price; you may see a different offer online) for federal filing, though all of TaxAct’s prices are discounted if you file early. If you have to report investments or rental property, you’ll need Premier ($69.95 for federal). At one more step up is the Self-Employed option ($79.95 for federal), which is the top-of-the-line service and the only one to offer Schedules C and F.  State returns cost $44.95 per state filed for all the paid editions. 

You can also save money by buying a bundle of TaxAct products called All-Inclusive, although you won’t see this offer until you’ve started a return with TaxAct. In other words, it isn’t a public-facing offer. All-Inclusive includes federal prep and filing and one state return (all TaxAct versions), refund transfer (subtract TaxAct fees from your refund), E-File Concierge (personalized help with return status), and Audit Defense (a pro will deal with the IRS for you). As of this writing, the price is $114.95, which may or may not go up to $229.95.

TaxAct no longer offers what it used to call the Price Lock Guarantee. In the past, no matter when you filed, TaxAct would charge you the price the product was when you started your return. Tax preparation services tend to get more expensive the closer you get to the filing deadline, and competitors generally charge you whatever the rate is at the time you file. This is a disappointing development, as it was one of the things that set TaxAct apart.

How Do TaxAct’s Prices Compare?

The price for TaxAct Deluxe is now just a few dollars less than the Deluxe version from H&R Block.

Cash App Taxes, formerly Credit Karma Tax, is now the only service that has supported all the major forms and schedules for both federal and state for free. FreeTaxUSA supports all major forms and schedules for free, with only a $14.99 charge for state returns. Of course, you get what you pay for, and what you don’t get for these low prices is a deep and thorough help system.

TaxAct Deluxe gives you the option to enter data on reproductions of official IRS forms sometimes, but you may find it easier to follow along with the step-by-step interview wizard.

TaxAct’s Wizard Wizardry

TaxAct, like its competitors, is an online version of all those paper documents you would otherwise need 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 form.

TaxAct makes this grueling process more organized and manageable. Just as a human being in a tax preparer’s 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 need to do is answer the questions on each page before you advance to the next. 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 right lines on the appropriate 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 typical with these services.

Early Tax Info

Your first steps in getting started are to create a username and password and enter codes sent by both text and email. Once you’re in, the site asks which version you want to use. It also asks if you want to import your tax data from last year, and you have the opportunity to edit anything that’s changed. TaxAct Deluxe can also import information from a PDF file of your 2020 return that was prepared by another service, which can save you a lot of time and improve the accuracy of your return, assuming your data was correct last year. The process is even simpler and better automated if you used TaxAct Deluxe last year.

If you’re starting from scratch, TaxAct Deluxe has to get some basic information about you up front, such as filing status, names and addresses, birth dates, and Social Security numbers. Then, it’s on to questions about dependents. This part is all fairly straightforward and done in a serious way. Other services, such as TurboTax and to a lesser extent H&R Block, try to be a little friendlier and even folksier, which doesn’t affect the actual tax preparation, but some people may find the chummier style can make a tedious experience a bit more pleasant. Others may prefer a more matter-of-fact approach.

TaxAct relationship status screen

Some screens in TaxAct have simple multiple choice questions. Others require data entry or selecting options from drop-down lists.

Getting Around TaxAct

The navigation tools you find in most personal tax preparation services are similar. In TaxAct Deluxe, the left vertical navigation tool is divided into the site’s main sections: Basic Info, Federal, and Review. When you click on one of those headings, the toolbar changes to reflect the subsections found there. So, for example, under Federal you see tabs for Income, Deductions, Credits, Taxes, Miscellaneous, and Summary. Below that are links to state, review, and filing tools, as well as a few housekeeping screens.

The easiest and recommended way to progress through TaxAct Deluxe is sequentially. Just keep completing screens and using the navigation buttons. When I tried to work out of sequence, I got tangled up more than once, and TaxAct’s navigation tools aren’t good at showing you exactly where you are on the site at any given time. H&R Block Deluxe is better at this.

You respond to the site’s queries by filling in blanks, clicking checkboxes, selecting from lists, choosing Yes or No, and so on. If your employer or financial institution is supported—and many are, with additional employers added for the 2021 tax year—you can import data from forms like the W-2 and 1099s, minimizing the need for data entry and ensuring accuracy.

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. TaxAct Deluxe does fine in this area. There’s nothing exceptional about its user interface, but it’s clean and attractive without going overboard on unnecessary graphics or other distractions. TurboTax has a more state-of-the-art look, whereas TaxAct looks quite polished and professional. The only issue worth noting is that the screens were slow to load.

Entering expenses into TaxAct

Before you start working with TaxAct’s lengthy Q&A, it asks what tax topics applied to you in 2021

Reporting Income and Expenses

Once you’ve completed the personal information section, TaxAct asks you in a series of screens about tax issues like income types, interest/dividend income and IRAs, special family and education expenses, and your housing. You don’t have to provide specifics here. TaxAct just wants to know what topics it needs to cover so it can report all your income and maximize your deductions. You always have the option to add to the list later. 

Next, TaxAct begins another set of questions, stepping you through all the tax topics you selected. You can either select the topics you need to cover or let the site walk you step-by-step through its very lengthy interview. 

If you decide to choose your own topics, TaxAct displays a navigation menu that lists all the site’s sections and tax items. Some have multiple subsections that drop down if you click on the arrow next to the main entry. If you click on one, the site walks you through the issues there and then returns you to the main section page to either choose another one or move on. 

Along the way, TaxAct occasionally gives you two options for entering your tax data. For example, when you need to record interest income, it asks if you want to enter the details on a reproduction of the 1099-INT form or continue in Q&A style. If you choose to work directly on the form, you still have access to guidance. 

Once you finish the income screens, the site takes you directly to deductions, then credits. The site’s navigation and questioning work the same way as they did in the income section. TaxAct also occasionally provides a bookkeeping tool when you need one, like for medical expenses. It lumps Doctor, Dentist, and Hospital Fees on one line, where sites like H&R Block separate those elements out. Click a link on an entry like that, though, and a window opens that allows you to enter individual line items for your own recordkeeping. Too bad it only gives you four lines.

TaxAct final review of your tax filing prior to submission

When you’ve answered all the questions in TaxAct’s interview wizard, the site checks your return for errors and inconsistencies.

After you complete all the federal screens and get a recap of the totals in each section, you see your refund or obligation, and 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 the pertinent topics, the site runs its exceptional review tool, which looks for incomplete or inconsistent information and other problems that might lead to an inaccurate return. It also flags potential tax savings in an area called the Deduction Maximizer, which has been enhanced for the 2021 tax year.

When TaxAct finds an error, it shows you the problem and provides fields for corrections and additions without forcing you to find your way back to the original page. TaxAct has also enhanced its tax-planning tool that provides targeted advice for the upcoming tax year.

Several Support Avenues

Excellent built-in help and support are critical components of effective tax preparation services. 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.

For advanced topics, you should have the option to click on hyperlinked words, phrases, or buttons that take you to even clearer guidance. At the very least, these services should have a searchable database that puts the best-matched links at the top of the results list. The best tax preparation services clarify complex IRS language, too.

TaxAct Deluxe has points in its favor here. For example, the site has reinstated its context-sensitive Q&As in the right-hand vertical pane, along with more general FAQs. I’ve always liked that feature. It saves the users clicks by providing relevant help content without them having to ask. Another set of links take you to TaxTutor Guidance (the Answer Center), the Tax Glossary, IRS form instructions, and IRS publications. 

Entering medical costs into TaxAct with context-sensitive help content avaialble

As you move through TaxAct’s interview wizard, you can access context-sensitive help content in the right vertical pane.

Even with such helpful support, I ran into problems. When you enter a word or phrase in the Search box, TaxAct returns a list of related forms. Clicking on one takes you to that page on the site, and that’s great. Below the related forms, however, is a list of links to relevant articles, and those links open a window containing the Answer Center (TaxTutor Guidance). I ran into two problems here. First, the site didn’t prioritize the broadest, most common responses first. For example, when I entered “medical expenses,” the first suggestions were related to HSA distributions, personal injury damages, and retired public safety officers. Entering “mortgage interest” returned top results like ministers and military housing allowances, and more than one borrower. 

Also, when I clicked on a topic that came from a search, it didn’t display context-sensitive content. Instead, it continued to queue up the beginning of the help chapter. I clicked Return to Index, and the site opened an extremely lengthy list of articles on all kinds of deductions. I also couldn’t search the index.

H&R Block has an edge over TaxAct in terms of the simplicity and accessibility of its help content. Its voluminous articles are always context sensitive, with common Q&As getting priority.

Several times, the site told me that I could read a specific IRS publication, which the site provided access to, for more information. By definition, the IRS has accurate documentation, but it can be difficult to decipher. The ability to avoid IRS documents altogether is a big reason for using a tax preparation website in the first place. TaxAct is not the only site to push you off to the IRS, and it’s almost never helpful.

Some screens display ProTips at the bottom. ProTips are brief snippets of information about the current tax topic that users may not know. For example, one talks about saving receipts when you make a noncash contribution to a qualified charitable organization. Another provides a link to a list of allowable medical and dental expenses. TaxAct contains more ProTips this year than last.

Other Support Options

TaxAct has other support options. You can click a small circled ‘i’ links or hyperlinked phrases wherever they appear to open a help window with an explanation of a concept. The site could use more of them. The only problem is the help window obscures your view of the working screen. H&R Block, by contrast, displays its help content in a vertical pane to the right and out of the way.

Phone help for technical site-related questions about the service are free. Email support has been discontinued. 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. 

Context-sensitive help options in TaxAct

When you click on a hyperlinked phrase or a small circled ‘i,’ the TaxAct Answer Center opens containing context-sensitive guidance.

This year, TaxAct is offering tax filers free Xpert Assist, which gives you unlimited access to a certified public accountant, enrolled agent, or other tax specialist who can respond to tax-related issues, not just technical queries. This service is similar to those offered by H&R Block and TurboTax.

How Secure Is TaxAct?

TaxAct works with the IRS and state authorities to comply with generally accepted procedures and practices for both physical and online security. It has implemented multiple safety features to ensure that you’re the verified account owner. Password requirements are complex, and your account is further protected through two-factor authentication, either using unique security codes sent to your phone or email, or via an authenticator app on your smartphone.

Filing Taxes on a Mobile Device

TaxAct Express, the name of TaxAct’s Android app and iOS app, looks and works much like the browser-based site. Click a link in the upper-left corner and the site outline opens. Click on Federal, for example, and a menu displays links to the Form 1040’s core sections. 

Four icons at the bottom of the screen turn out to be not terribly useful. One takes you to the home screen. The second opens a screen with four very basic FAQs. The third is supposed to open calculators, but I couldn’t get them to open in the iOS version. And the fourth takes you to account information. Like the browser-based site, TaxAct Express moved from screen to screen very slowly.

Click a link in the upper-right corner and you get access to the support and tools found in the vertical pane in the full version. The help tools in TaxAct Express replicate what you see on the main site. Search for a word or phrase, for example, and the app displays links to areas of the app related to that topic. 

TaxAct iPhone app screen and Android app screen

Using TaxAct’s mobile apps, you can complete your tax filing or pick up where you left off from the desktop browser version.

Tax preparation websites tout their solutions’ ability to let you move between devices. That is, you can start your return on one device and pick up where you left off on another simply by signing in. Having similar user interfaces on both desktop editions and the mobile tax apps like TaxAct does makes this much easier.

Early Help Hiccups

If you’ve used TaxAct before and liked it, there’s no real reason to switch unless your tax situation has changed, and you anticipate needing extra guidance or you simply want a better user experience. TaxAct Deluxe provides multiple levels of help (though the help options are not as context-sensitive as they could be), and its final review process is stellar. We’re hoping that the few problems we encountered will be fixed by the time the site opens for filing in January or February. Check back then to find out and to learn about the site’s new features.

We’ll update this preview of TaxAct to a rated review after we’ve had a chance to examine its competitors.

While you’re thinking about your money, read our roundup of the best personal finance software. If you run a small business, we have you covered with the best accounting software.

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