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TaxAct vs. TurboTax 2020

July 27, 2020
Income Taxes, Personal Taxes, Taxes
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own.

Competition is fierce between two of the biggest tax-prep software providers. Here’s NerdWallet’s point-by-point comparison to help you sort out which cloud-based software is better for you: TurboTax or TaxAct.


 

FREE

 

DELUXE

 

PREMIER

 

SELF-EMPLOYED

 

Quick facts

  • User-friendly, interview-style Q&A.
  • Live, on-screen support option raises the bar in human help.
  • Some of the most expensive software on the market.
Start your return on TurboTax's website
 
 

FREE

 

DELUXE

 

PREMIER

 

SELF-EMPLOYED

 

Quick facts

  • User-friendly, interview-style Q&A
  • Live, on-screen support option raises the bar in human help.
  • Some of the most expensive software on the market.
Start your return on TurboTax's website
 
 

 

FREE

 

DELUXE+

 

PREMIER+

 

SELF-EMPLOYED+

 

Quick facts

  • Generally less expensive than similar TurboTax and H&R Block options.
  • Human support available, though not always as robust as some competitors.
  • Audit coverage costs extra.
Start your return on TaxAct's website
 
 

FREE

 

DELUXE+

 

PREMIER+

 

SELF-EMPLOYED+

 

Quick facts

  • Generally less expensive than similar TurboTax and H&R Block options.
  • Human support available, though not always as robust as some competitors.
  • Audit coverage costs extra.
Start your return on TaxAct's website
 
 

TurboTax vs. TaxAct: Price

Tax Act is generally the less expensive of the two. TurboTax’s top-tier, throw-it-all-at-us version costs well over $100 at list price when you add in a state return (and over $200 if you go with its software-slash-human hybrid package called TurboTax Live). Tax Act’s corresponding top-tier product is much cheaper.

TurboTax’s packages and list prices

FREE

• Federal: $0
• State: $0

This allows you to file a 1040 and a state return for free, but you can’t itemize or file schedules 1-3. 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: $50

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. You can file a Schedule C for business income (but not expenses). 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 plus capability for reporting investments and rental income (it supports 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 support for the home office deduction, extra deduction help and special expense-tracking features for freelancers, independent contractors and side-hustlers. Comes with a one-year subscription to QuickBooks Self-Employed.

TaxAct’s packages and list prices

FREE

• Federal: $0
• State: $0

This option allows you to file a 1040 and a state return for free, but you can’t itemize or file schedules 1-3. 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: $54.95 • State: $54.95 This version lets you itemize and claim several other tax deductions and tax credits. It also comes with unlimited email or phone support from tax specialists. 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: $79.95 • State: $54.95 If you need to report investments or rental properties, this is the package for you (it supports Schedules D and E). You’ll also get priority support with a dedicated phone line, screen-share capabilities and some in-app chat support.
SELF-EMPLOYED+

• Federal: $109.95 • State: $54.95 TaxAct’s highest-end version for online filers is for freelancers and the self-employed. It comes with unlimited tax and tech support via phone, screen-share and chat, plus a tool for maximizing business deductions.

Both providers offer several versions of paid products that accommodate increasingly complex tax situations. Itemizers will probably find the Deluxe/Deluxe+ versions a good pick; the Premier/Premier+ versions generally are tailored more toward investors and people with rental property. (And remember, you’ll pay extra to get your state return done.) If you’re self-employed, the Self-Employed versions can handle the heavy lifting.

Winner: TaxAct
TaxAct will cost you less than the comparable TurboTax package. Both providers offer a free version, though only for people who have fairly simple tax returns.

TurboTax vs. TaxAct: 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 products are some of the most user-focused on the market. The interface is like a chat with a tax preparer, and it makes an effort to explain certain concepts right on the page as you work. You can skip around if you need to, and a banner running along the side keeps track of where you stand in the process and flags areas you still need to complete.

TaxAct

TaxAct may not be as flashy as some competitors’ products, but that’s OK — for some people, function outweighs form. You can skip around fairly easily, and as with most software packages, a banner running down the side keeps track of where you are in the process.

Both providers offer photo and other import options for W-2s to speed things up. TurboTax’s Deluxe, Premier and Self-Employed packages also integrate ItsDeductible, which is helpful for quickly finding the deduction value of donated clothes, household items or other objects. The Self-Employed version offers a neat expense-tracking feature through QuickBooks.

TaxAct offers also most of your standard options, such as importing last year’s returns and a donation assistant (for the paid packages), as well as some planning tools and calculators. You can import 1099s. Tax Act’s Self-Employed version has a Deduction Maximizer that helps people remember to take deductions common in their fields of work.

Winner: TurboTax
Both providers offer solid options with intuitive interfaces that keep the process moving in a logical manner so you get done quickly. But if you want every bell and whistle on the market, TurboTax is the better choice.

TurboTax vs. TaxAct: Support

TurboTax

If you need (or want) a lot of hand-holding, TurboTax could be a great choice. Its searchable knowledge base, video tutorials and online community are handy for research on the fly.

One of TurboTax’s most outstanding support features is TurboTax Live. It offers a one-on-one review with a CPA or enrolled agent before you file, as well as unlimited live tax advice. They’ll even sign and e-file your tax return if you want. You can make an appointment or talk to a tax pro via one-way video (you see them, but they don’t see you — they just see your screen). To boot, you can get tax advice year-round with TurboTax Live. Of course, it’s not free.

TaxAct

TaxAct offers tech support via the typical channels and tax support via phone and in-app email for paid users. It also offers a screen-share option for its Premier+ and Self-Employed+ users: It’s not a face-to-face video connection; rather, it lets the user and the support agent see each other’s screens, including cursor moves and clicks. The company says the support agent can’t see entry fields containing password or payment information.

The tax pro you get may not be a CPA. TaxAct says its tax specialists are people who have prepared taxes before, have taken and completed tax classes or have taken a company tax certification course; they all also received 80 to 100 hours of in-house training, according to the company. They are supervised by an enrolled agent.

TaxAct’s tax specialists don’t provide tax advice. They do provide “tax support” by helping you understand what forms you may need and where to put information on forms.

Winner: TurboTax
TurboTax software has a huge knowledge base, and its Live products offer a hookup with a qualified tax pro. TaxAct offers access to tax pros too, but they may not be CPAs or enrolled agents, you can’t see the person you’re talking to, and the advice may be limited. TurboTax has an edge (at a cost).

TurboTax vs. TaxAct: Refunds, audits and other considerations

No matter how you file, you can choose to receive your federal refund via direct deposit to a bank account — that’s the fastest option. Other options 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’s a fee for that: TurboTax charges $40; TaxAct charges $49.95.)

» MORE: See how to track the status of your tax refund

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, but if you want someone to represent you in front of the IRS, you’ll need TurboTax’s audit defense product, called Max Defend and Restore. It runs $45 to $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 denied tax credits as well as tax debt, and provide tax fraud assistance.

Winner: TaxAct — but only if you’re worried about an audit
If you just want the cash from your refund, both companies can get it done. If things ever get messy with the IRS, though, TaxAct has an edge because the cost of its audit defense add-on is slightly more predictable than TurboTax’s is.

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

TaxAct costs less and still does plenty, so really take a hard look at this option. But if you like face-to-face support — and can afford it — TurboTax has all the bells and whistles and is a very attractive choice.


 

FREE

 

DELUXE

 

PREMIER

 

SELF-EMPLOYED

 

Quick facts

  • User-friendly, interview-style Q&A.
  • Live, on-screen support option raises the bar in human help.
  • Some of the most expensive software on the market.
Start your return on TurboTax's website
 
 

FREE

 

DELUXE

 

PREMIER

 

SELF-EMPLOYED

 

Quick facts

  • User-friendly, interview-style Q&A
  • Live, on-screen support option raises the bar in human help.
  • Some of the most expensive software on the market.
Start your return on TurboTax's website
 
 

 


 

FREE

 

DELUXE+

 

PREMIER+

 

SELF-EMPLOYED+

 

Quick facts

  • Generally less expensive than similar TurboTax and H&R Block options.
  • Human support available, though not always as robust as some competitors.
  • Audit coverage costs extra.
Start your return on TaxAct's website
 
 

FREE

 

DELUXE+

 

PREMIER+

 

SELF-EMPLOYED+

 

Quick facts

  • Generally less expensive than similar TurboTax and H&R Block options.
  • Human support available, though not always as robust as some competitors.
  • Audit coverage costs extra.
Start your return on TaxAct's website
 
 

» MORE: Check out our roundup of the best tax software

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