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Competition is fierce among the biggest tax-prep software providers. TurboTax may be more widely recognized, but TaxAct is a fierce competitor with its affordable tax help.
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FREE TIERS | |
$0 + $39.95 per state filed. For dependents, simple filers who need help with college expenses, unemployment or retirement income. | $0 + $0 per state filed. 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 2 or 3 of the 1040. Limited use of schedule 1 is available. Not all taxpayers qualify. |
PAID PACKAGES | |
Deluxe $50.95 +$54.95 per state filed (Xpert Assist: $90.90; $54.95). This option is ideal for homeowners and those who need to consider childcare expenses, student loan payments, deductions, credits and adjustments. Premier $74.95 + $54.95 per state filed (Xpert Assist: $114.90; $54.95). Premier is good for investors who need to report capital gains and losses and those who have sold a home or own a rental property. Self-Employed $99.95 + $54.95 per state filed (Xpert Assist: $139.90; $54.95). This tier is good for freelancers, contractors and small-business owners. Includes access to Schedule C and Schedule F. Promotion: NerdWallet users get 25% off federal and state filing costs. | Live Assisted Basic $99 + $54 per state. Free version, plus access to a tax pro, advice and a final review. Deluxe $69 + $59 per state (Live Assisted: $139, $64). Itemize and claim several tax deductions and credits. Works well for business income but no expenses. Premier $99 + $59 per state (Live Assisted: $189, $64). Deluxe version plus investment reporting and rental income (Schedules D and E, and K-1s). Self-Employed $129 + $59 per state (Live Assisted: $219, $64). Premier version plus business income, expenses on a Schedule C, home office deductions and features for freelancers. Promotion: NerdWallet users can save up to $15 on TurboTax. |
One note on prices: Providers frequently change them. You can verify the latest price by clicking through to each provider's site.
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 and offer tools to help you calculate the deduction value of donated items (though neither TurboTax nor TaxAct offer this at the free tier). Both providers have a mobile app.
Support
TurboTax and TaxAct offer inline help and searchable knowledge bases, and tech support is available as well. Both providers also offer paid upgrades to packages that offer tax support from knowledgable pros.
TurboTax
TurboTax Live 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).
TurboTax Full Service does away with tax software altogether. Instead, you upload your tax documents and a human puts together your tax return. Prices range from $209 to $399 for federal returns depending on complexity, plus $49-$59 per state return.
TaxAct
TaxAct offers affordable help through its Xpert Assist packages. XpertAssist 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. TaxAct also offers free reviews before you file.
Note that prior to March 21, 2023, all filers had access to the Xpert Assist service free of charge. Returns started after March 21, 2023, now require a paid upgrade to take advantage of tax pro support.
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 may 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, too).
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 2022, 2021 or 2020 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 $49 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?
TurboTax may reign supreme when it comes to tools and integrations, but that doesn’t mean the provider’s overall offerings are the perfect fit for every user.
TaxAct’s paid packages cost less, and they come with affordable upgrades for human tax help support if you need it. This makes TaxAct a great one-stop shop for both seasoned and beginner filers who might feel at ease knowing that help is available should they need it.
TurboTax, on the other hand, has a long-standing reputation for its ease of use, including a well-reviewed mobile app and plenty of its own human support options at a cost. This may make the provider a better choice for those who are willing to pay a little bit extra for the bells and whistles of white-glove tax prep.
How do TurboTax and TaxAct compare with other providers?
Promotion: NerdWallet users get 25% off federal and state filing costs. | |
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Promotion: NerdWallet users can save up to $15 on TurboTax. | |
Promotion: NerdWallet users get 30% off federal filing costs. Use code NERD30. |
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