Tax season is upon us and if you are thinking about TaxACT Online for filing taxes, this review is for you.
The online version works a little different than other electronic options in that instead of installing software, you can do everything through your browser.
This has a few advantages over a software version because:
- You can buy a new computer while still having your tax information saved (no porting over data).
- You can run a mac at home, Windows at work and still update your tax forms without hassle.
- You can be a mac convert like me and still have access to last year’s returns
- You don’t have to pay for the actual software before you even file taxes
Having said that, the main disadvantage is that only people who pretty much have readily available internet connections will be able to access and file taxes (ie, no updating this on the plane).
TaxACT Online is broken down into three main products: TaxACT Online Standard, Online State, Online Deluxe.
TaxACT Online Standard
The main reason why I started filing with TaxACT at the time was because it provided a free federal tax option. It allowed me to prepare, print and e-file the federal return part of my taxes free at the time and anytime something is free, it’s always a great choice.
You might be skeptical of why they can do this, but they are obviously hoping that you will file the state tax return with them as well, which cost $13.95. The good part is that the price I mentioned includes e-filing as well. If you really want to save money, you can always e-file with TaxACT and then paper file the state return yourself (although I believe the money is well spent because it only takes literally 5 minutes to file the state return once you are done with the federal.
The second benefit for them though is that once you file with them, it’s much easier to stay with TaxACT again than to go somewhere else, so they get repeat business.
TaxACT Online Deluxe
There’s an option to pay for the federal return for $9.95, which include these options amongst others:
- Walks You Through Life Changes
One of the differences with the Deluxe version is that it will have an additional tab that will pose a series of questions to you to help get the most tax deductions based on life events such as birth of a child, changing jobs, going to college or buying a house. For example, clicking the Birth category taught me that expenses for medically necessary care of the mother and child are deductible as medical expenses (such as baby checkups and prenatal checkups). It also lets me put in the medical expenses on the spot so I won’t forget to put it when I get to the itemized deductions screen. - Import Last Year’s Data
This is probably the most attractive feature for the deluxe version because it is so much easier if you can just import last year’s return. No more trying to find that paper return, no more unnecessary data input. A few clicks and you no longer have to type your employer’s name (if you didn’t change jobs). Plus, all the data that you normally need from your tax report the year before. - Expert Tax Help from J.K. Lasser
The deluxe version also gives you access to an online version of J.K. Lasser’s Your Income Tax Guide, which is America’s top selling tax guide (valued at $16.95).
TaxACT Online State
The state is an extension to either the standard or the deluxe version. It will cost $13.95 if you took advantage of the free federal returns while the same thing costs you $7.00 if you filed your state return with the deluxe version.
Also, they have a ultimate bundle package, which is basically TaxACT Online Deluxe + Online State.
Flow of Filing with TaxACT
Once you sign up and log in, you will see the following navigation bar at the top of the screen.
Starting with basic info, you will be guided step by step through a series of questions until you reach File, which gives you the option to print the returns out or file it electronically. (Note: Even if you decide to e-file, you should print and/or save a copy to your computer for your own records, as TaxACT will charge you to access previous year’s returns).
If you decide that you need a break from all the questions, you can always save your return and come back to it at anytime and pick up exactly where you left off!
Final Thoughts about TaxACT
It was only a few years ago when I started filing taxes online with TaxACT. Like most of you, I knew that e-filing is faster, easier and quicker so I went on my search for the best one out there. After some digging, I noticed some companies even provided free federal tax filing so this is definitely a plus!
At the end, I ended up with TaxACT because they were one of the few at the time to offer free federal taxes as well as support 1040EZ form, which I needed.
Once I decided, I really like it because I feel like I’m being guided by the questions and answers type of filing my tax return instead of me trying to find out all the forms that I need to get based on my circumstances.
I highly recommend TaxACT Online as I’m a happy user of it myself so give it serious consideration if you are looking for a way to file your taxes electronically this year.
{ 3 comments… read them below or add one }
I pressed the button to try deluxe free and did not use any of it so want to undo the upgrade. I can’t find how to undo it. Can you please aadvise me of the procedure to undo the deluxe upgrade? Thank You.
Gerald Himmelberg
Gerald: I would advise emailing or contacting TaxACT support. I went to their site and I can get to the form via:
Home > Tax Help & Support > Contact Us
In 2007 Tax Act made out my taxes, and I recently received a notice from the IRS that line 64 ( federal income taxes withheld from forms w-2 and 1099R) are different from the total amounts on my 1099R’s. They said you reported income tax withheld on line 64 in the amount of $15,493.00
when they checked the 1099 R’s the income was $13,244.00. I would appreciate it if you could check and see if a error could have been made by you or the IRS.
Thank you
James & Ruth Tranberg
973-377-1345
Sept 7,2009