TaxAct Review

Saturday, January 8th, 2011 at 2:40 pm

	TurboTax Home & Business Federal + e-File + State 2010 - [Old Version] List Price: ~~$99.95~~ Sale Price: $8.15 You save: $91.80 (92%)

	TurboTax Home & Business Federal + State + Federal efile 2009 List Price: ~~$99.95~~ Sale Price: $42.89 You save: $57.06 (57%)

taxact
TaxAct is the cheapest of the Big Three consumer tax preparation products, but is there a hidden cost to what you don't pay? We work it out in this review.

TaxAct online has multiple tiers of services, including a free federal form (basically, the equivalent of a 1040EZ with no complex deductions), a federal form with itemized and assisted deduction, and a form for combined federal and state filing. This is easily cheaper than H&R Block At Home or TurboTax. You don't pay until you file and you don't have to create an online account to prepare your return, though you can't save your progress, file, or print a return until you create an account. Unless you just enjoy filling out tax forms without actually filing them, this feature is largely irrelevant. (The online account does have the advantage of starting a return on one PC and finishing it on another, should you have to change locations to track down some data.)

Worthy of note, TaxAct online requires that you create a strong password for your account -- to the point that the password can't contain the word tax -- which was actually somewhat reassuring. The site also prominently features a number of embedded video assistants that walk you through the process at regular intervals. These were more calming than directly helpful; after listening to the first couple I simply ignored their "these are the forms you're about to fill out" commentary.

After you've created your account, you'll be asked if you wish to import last year's tax return. Ideally, this would be the return you prepared with TaxAct last year. If not, you can theoretically import a PDF copy of last year's return (which most competing tax prep programs generate). I uploaded my existing TurboTax-generated PDF of last years return, with middling results. TaxAct online was able to glean my and my wife's names, social security numbers, and home address, but it couldn't find phone numbers, our dates of birth, or notice that we have a dependent. Some of this is immediately correctable, some of it isn't, and for the latter category I had to be sure to make the appropriate edits during the data entry process.

TaxAct online uses the standard interview technique to prompt you to enter the appropriate data into the appropriate fields, and it does this reasonably well. A running tally of your expected tax return (or tax debt, if you owe) appears in the upper right hand of the screen.

When it comes to actually inputting data, TaxAct online usually offers two options: Quick Entries, and Step By Step Guides. Quick Entries are replicas of standard IRS forms; the W-2 looks just like a basic W-2, and you simply copy over any data from your paper forms into the virtual forms. As long as you don't miss any fields, you'll be fine.

Step By Step Guides are questionnaires that prompt you to enter specific data into specific fields, usually by referring to a numbered box on your W-2 or 1099. These can occasionally get a little confusing as TaxAct asks for form data out of order but generally works out without any major hiccups.

When I was done, TaxAct online offered to perform a color-coded error check -- green for potential savings, yellow for areas I should review, and red for items I almost certainly screwed up. The scan brought up a few areas I should review for possible savings, and one area (with my home office) that it wanted me to double-check. Unfortunately, TaxAct didn't link me to those portions of my return, nor did it offer advice on how to reassess or recalculate those data points. It just said "hey, you should look at this," and left it at that.

Similarly, TaxAct online offered to compare my current years return to my last year return, which I had previously "imported" in a very loose sense of the term. As almost none of the data from last years return PDF was actually imported, I got to spend about 15 minutes manually inputting the data. And what did I get for my trouble? A note that I made less money in this past year and an itemized list of differences in income and expenses in various areas that I should review. Put simply, the comparison was virtually worthless, because all TaxAct did was tell me that I had two different tax profiles in two different years, which I knew before this whole process began.

After filling out the forms for TurboTax and TaxCut as well, I have a little less confidence in the conclusions of TaxAct than I do other tax prep apps, largely because the system's calculations are so barebones and opaque. I simply don't feel like I was given the opportunity to properly itemize my deductions, and TaxAct's error check system didn't do much to reassure me.

If you have a very straightforward tax profile and expect to use standard deductions, TaxAct simplicity -- and very low cost -- is worth your time. If you have a more complicated return in front of you, it might be worth springing for a more expensive, and robust, tax prep app like TurboTax.

TAXACT FEDERAL 2011

TAXACT FEDERAL 2011...

TurboTax Home & Business Federal + e-File + State 2010 - [Old Version]

$8.15

Designed for sole proprietors, self-employed, consultants, 1099 contractors, and single-owner LLCs. Expanded interview walks you through entering business income and expenses to help you maximize business and personal deductions, home office deductions, depreciation and more. Create W-2 and 1099-MISC forms for your employees and contractors. The Intuit TurboTax Home & Business Tax Year 2010 Softwa...

TurboTax Home & Business Federal + State + Federal efile 2009

$42.89

TURBOTAX HOME & BUSINESS WITH...

TurboTax Basic Federal + E-file 2011

$4.88

TurboTax Basic 2011...

McGraw-Hill's Taxation of Individuals and Business Entities, 2012 edition

$34.99

McGraw-Hill’s Taxation Series continues to provide a unique, innovative, and engaging learning experience for students studying taxation. The breadth of the topical coverage, the storyline approach to presenting the material, the emphasis on the tax and nontax consequences of multiple parties involved in transactions, and the integration of financial and tax accounting topics make this book idea...

Taxation of Individuals & Business Entities 2012e with Connect Plus

$252.22

...

McGraw-Hill's Taxation of Business Entities, 2012e

$92.18

McGraw-Hill?s Taxation Series continues to provide a unique, innovative, and engaging learning experience for students studying taxation. The breadth of the topical coverage, the storyline approach to presenting the material, the emphasis on the tax and nontax consequences of multiple parties involved in transactions, and the integration of financial and tax accounting topics make this book ideal ...