Taxact.com Review – Act Now for your Taxes

Earlier we have reviewed Turbo Tax Home Edition at FPR. Now presenting the tool that I personally use for our tax return. Taxact.com.

Taxact.com is an application that helps you out in preparing and filing your taxes, both in state and federal. You can run the software from a standalone desktop without Internet connection, or you can use its online version. You can get it for free, though you have to pay for it with advertisements and nag screens all the way, or you can get the editions without the advertisements after paying a fee.

With all the options, you get to prepare and file your taxes, and if your return is not complex, you can even be done within couple of hour.

Now, compare that to other tax software like H&R Block Tax Cut or Turbo Tax.

First of all, you have no fee option with both software. Secondly, at Amazon, their prices fluctuate from around USD 60 to USD 30 – the closer it is to the deadline, the cheaper the software becomes, but even then, Taxact.com is still the cheapest alternative. And third of all, you get the same service from all three – you get to file your taxes with more or less the same hassle, depending on  the simplicity of your tax returns or how much you know about tax law.

A Short History of Taxact

Both Intuit and H&R Block have had a run at Taxact.com. The first incarnation of Taxact.com was by Parsons Technology with Personal Tax Edge as the software. Intuit bought Parsons Technology and then dismantled Personal Tax Edge. Soon afterwards, the same people from Parsons Technology formed their own company, 2^nd Story, where they developed Taxact.com. Then it was H&R Block’s turn at trying to buy out 2^nd Story, but a federal ruling prevented the buy-out. Leaving Taxact.com where it is today.

What Taxact.com Does

Taxact.com offers three services – it allows you to prepare a federal tax return, to print the tax return for filing, or to have it in e-file format to send it electronically. If this is your first time doing your taxes, be prepared with that little fact from Amazon – tax filing software peaks in their prices around December, but the deadline for filing taxes is still on April 15. Preparing your taxes take that much time.

Now, the great thing about preparing taxes using Taxact.com is that most of your tax filings are about your previous tax year – just about 90% of this year’s taxes. Now, when you use Taxact.com yearly, your previous filings are automatically used to fill in your forms for this year, and will save you a lot of time digging up old data.

Tip – At every step the online software offer you lucrative features, which require a payment. Even accessing previous year’s data requires upgrading to the paid version of their software. To avoid this fee, save your tax return (in PDF format) to local computer. Start doing this from 2011 tax return so that in 2012 tax return, which you will do in 2013 you have readily available data.

Taxact.com allows you to use several versions of its tax preparation software. The basic edition is free to use, and some are legacy installations which need to be updated yearly for changes in tax laws. And that’s the catch – if you use other tax preparation software, you are trapped into using it for as long as you are going to pay taxes. You will always have to buy the new and updated version. You will find it hard to move to other tax filing software, because all your previous data is locked up in a different format, and new software forces you to a different way of preparing your taxes.

And if you are going to get trapped into using software for the rest of your tax paying years, you might as well go with Taxact.com – at the very least, you always have the option of getting the service for free. And, if you are knowledgeable enough with your taxes, you can even finish filing your taxes in as little as less than an hour – free and worry-free, that is what Taxact.com dos for you.

And if you get used to doing your taxes online via Taxact.com, it offers another advantage – the website will always be updated with the latest changes in tax laws. You can do your taxes anywhere, though don’t really expect the tech support of Taxact.com to answer any question relating to your taxes – the staff will not do your taxes for

Using Taxact.com

The mere fact that Taxact.com offers the same service in both its website and through CD installations of its program already tells you that what Taxact.com does is not about the software – it is about the service, especially if you count the fact that it offers its service for free. Taxact.com really does make the filing of state tax returns simple – look at how the software works. You can do it by interview form, where questions are asked, and each answer you give is placed in the necessary fields of your tax return. Or you can do it manually, with the form on your screen, and all you do is input the values.

The advertisements are what bothers most people. The advertisements are targeted ads, meaning that some of your information triggered which ad appears on your screen. While on the whole the complaints have been simple annoyances at the work interruption, a complaint that says paying your taxes through your credit card can add extra charges to the expense, so it is one thing to remember when using Taxact.com.

The Verdict for Taxact.com

You have to have some experience in filing your tax returns, or else stick to the interview mode of Taxact. Also, the CD installers for Taxact.com only works on the Windows platform, so forget it if you are a Mac user.

If you can ignore the ads, the free version works just as well as the paid versions, but you have to know what you are doing.

The tech support of Taxact.com will not do your taxes for you – that much is clear. And one more thing about Taxact.com – your previous filings are retrievable, so if you used Taxact.com last year, this year’s tax return will already be 90% filled up, more or less, making all that work in preparing your taxes that much faster.

Overall, based on 6 years of experience in using Taxact.com we give them a “Must Use” rating for its free version. Also on the paid version, they offer the lowest price for filing your taxes.

Disclaimer: Finance Product Reviews is an independent website. Although we may have advertisement relationship with financial institution we review, they do not influence our decision or rating of products. Contents of this site are not provided by any financial institution, banks, brokerages or credit card issuers. Opinions expressed here are author’s alone and are not reviewed, approved or otherwise endorsed by the product owners.