TaxAct vs. TurboTax 2021

Here's how TurboTax and TaxAct compare.

Tina OremJan 24, 2021
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Competition is fierce among the biggest tax-prep software providers. TurboTax is king, but it may not be the clear choice for everyone.

FREE

PREMIER

DELUXE

SELF-EMPLOYED

Quick facts

  • User-friendly, interview-style Q&A.

  • Live, on-screen support option offers human help at extra cost.

  • Some of the most expensive software on the market.

FREE

PREMIER

DELUXE

SELF-EMPLOYED

Quick facts

  • Generally less expensive than similar TurboTax and H&R Block options. (And NerdWallet users can save 25% on federal and state filing costs.)

  • New human-support options available at an extra cost.

  • Free version has a fee for state returns.


Price

TurboTax's packages and list prices

FREE

• Federal: $0 • State: $0

For simple tax returns only; it allows you to file a 1040 and a state return for free, but you can’t itemize or file schedules 1-3 of the 1040. Generally, it works only for people who don’t plan to claim any deductions or credits other than the standard deduction, the earned income tax credit or the child tax credit.

LIVE BASIC

• Federal: $80 • State: $45

This is essentially the free version but with on-demand video access to a tax pro for help, advice and a final review.

DELUXE

• Federal: $60 (with Live: $120) • State: $50 (with Live: $55)

This version lets you itemize and claim several other tax deductions and tax credits. And if you have business income but no expenses, this might work for you, too.

You can’t report capital gains or rental income (Schedules D and E).

PREMIER

• Federal: $90 (with Live: $170) • State: $50 (with Live: $55)

This is the Deluxe version with added capability for reporting investments and rental income (Schedules D and E, and K-1s).

SELF-EMPLOYED

• Federal: $120 (with Live: $200) • State: $50 (with Live: $55)

Gets you everything in the Premier version, plus it can handle both business income and expenses on a Schedule C. It also works for the home office deduction, and offers extra deduction help and special Square, Uber and Lyft features for freelancers, independent contractors and side-hustlers.

TaxAct's packages and list prices

FREE

• Federal: $0 • State: $34.95 This option allows you to file a 1040, but you can’t itemize or file schedules 1-3, and there’s a charge for the state return. Generally, it works only for people who don’t plan to claim any deductions or credits other than the standard deduction, the earned income tax credit or the child tax credit.

DELUXE

• Federal: $44.95 ($74.95 with Xpert Help) • State: $54.95 This version lets you itemize and claim several other tax deductions and tax credits. If you’re an investor, a landlord or filing a Schedule C (for freelancers or small-business owners), you’ll need to upgrade.

PREMIER

• Federal: $69.95 ($94.95 with Xpert Help) • State: $54.95 If you need to report investments or own rental property, this is the package for you (it supports Schedules D and E).

SELF-EMPLOYED

• Federal: $79.95 ($139.95 with Xpert Help) • State: $54.95 TaxAct’s highest-end version for online filers is for freelancers and the self-employed. It comes with a tool for finding and maximizing business deductions.

Promotion: NerdWallet users get 25% off federal and state filing costs.

Features and ease of use

Only one entity determines how the math works on a tax return, and that’s the IRS. So unless there’s a programming error, you should get the same numerical “answer” no matter which tax software you use. But you still have to feed the software all of your information, and there are a million ways to do that. Which is why we look at features and ease of use — we want to know which offerings are least likely to make you want to pull your hair out.

TurboTax

TurboTax’s interface is like a chat with a tax preparer, and you can skip around if you need to. A banner running along the side keeps track of where you stand in the process and flags areas you still need to complete.

Embedded links throughout the process offer tips, explainers and other resources. And help buttons can connect you to the searchable knowledge base, on-screen help and more.

TaxAct

TaxAct has a similar look and feel, with an interview process guiding you along. You can skip around easily, and a banner running down the side keeps track of how far along you are.

Embedded links throughout offer tips, explainers and other resources, and the help center links to a searchable knowledge base.

Both TurboTax and TaxAct allow you to switch from a different software provider, although TurboTax accepts more imported documents. Both of these two have tools to help you calculate the deduction value of donated items, and both have a mobile app.

Support

Both TurboTax and TaxAct offer inline help and searchable knowledge bases, and tech support is available as well.

TurboTax

One of TurboTax’s most outstanding support options is TurboTax Live. It offers a one-on-one review with a tax pro before you file, as well as unlimited live tax advice throughout the year. You can make an appointment or talk on the fly to a tax pro via one-way video (you see them, but they see your screen only).

New this year is TurboTax Full Service, which does away with tax software altogether. Instead, you upload your tax documents and a human puts together your tax return. You meet the tax preparer on a video call before they begin working, then you’ll meet again when your return is ready for review and filing. Prices range from $130 to $290 for federal returns, depending on complexity, plus $45 to $55 per state return.

TaxAct

TaxAct's most notable support offering this year is the introduction of Xpert Help, which gets you unlimited, screen-sharing access to a tax expert. You can ask for help on demand or, in some states, schedule a call. TaxAct says its tax pros are CPAs, enrolled agents or other tax specialists.

Although some consumers may not need or want the on-screen support experience that’s becoming more prevalent in the tax software business, others might find TaxAct’s lower price point a good avenue to test the service out.

Refunds, audits and other considerations

Both TurboTax and TaxAct let you receive a federal refund via direct deposit to a bank account — that’s the fastest option. Other options both offer include getting an old-fashioned paper check, applying the refund to next year’s taxes or directing the IRS to buy U.S. Savings Bonds with your refund.

Both providers offer an option to have your refund loaded onto a prepaid card. (These cards come with fees, so be sure to factor that into your decision.) And both let you use your refund to pay for your tax-prep fees (but there is a separate fee for that).

If you are audited, it’s important to know what kind of support you’re getting from your tax software. First, be sure you know the difference between “support” and “defense.” With most providers, audit support (or “assistance”) typically means guidance about what to expect and how to prepare — that’s it. Audit defense, on the other hand, gets you full representation before the IRS from a tax professional.

TurboTax gives everyone free audit support from a tax pro to help you understand what’s going on if you get that dreaded letter about your 2020, 2019 or 2018 tax return; if TurboTax can’t connect you with a pro, you’ll get a refund. If you want someone to represent you in front of the IRS, you’ll need TurboTax’s audit defense product, called MAX. It runs an extra $60 and includes features such as identity theft monitoring, loss insurance and restoration help.

TaxAct’s audit assistance consists of a FAQ page on its website. But customers can buy audit defense from a partner company called Protection Plus for $49.95. Coverage includes three years of audit services for this year’s return, and TaxAct says the product will guide you through the audit process, handle IRS and state correspondence on your behalf, help with tax debt and provide tax fraud assistance.

TurboTax vs. TaxAct: Which one is right for you?

TaxAct costs less and still does plenty, but TurboTax has more bells and whistles.

FREE

PREMIER

DELUXE

SELF-EMPLOYED

Quick facts

  • User-friendly, interview-style Q&A.

  • Live, on-screen support option offers human help at extra cost.

  • Some of the most expensive software on the market.

FREE

PREMIER

DELUXE

SELF-EMPLOYED

Quick facts

  • Generally less expensive than similar TurboTax and H&R Block options. (And NerdWallet users can save 25% on federal and state filing costs.)

  • New human-support options available at an extra cost.

  • Free version has a fee for state returns.

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