TaxAct Deluxe 2020 has always been in the mix for best tax software, but perpetually just behind the behemoths in the industry, TurboTax and H&R Block. However, the introduction of new features and services let TaxAct compete more directly with the top competition.
TaxAct is the most comprehensive service we’ve seen, with both web- and download-based options to cover a wide swath of tax-filing situations not directly addressed by either TurboTax or H&R Block. For example, it offers solutions tax-exempt organizations, trusts and estates, and multiple business options (sole proprietor, partnership, C-Corporation and S-Corporation). TaxAct even has bundles for individual and business tax filing, with pricing that encompasses both situations plus the relevant state tax filing. It also remains the best tax software for businesses or self-employed.
TaxAct caters well to those who know what forms they need for their taxes, as it clearly delineates which forms are included with which product. But the company now provides better guidance on which package is appropriate for your tax needs. And it does so at reasonable prices, and with a flowing, easy-to-use interface.
TaxAct Deluxe 2020 review: Cost
TaxAct has four core products in its online Federal portfolio. Prices scale from free to $79.95. You have to pay for state returns separately.
The primary step-ups from TaxAct’s free version closely follow the industry standards used by TurboTax and H&R Block, but at lower prices: TaxAct Free, Deluxe ($44.95), Premier ($69.95), TaxAct Self-Employed ($79.95). All four of these options have TaxAct’s new Xpert Help filing available; adding Xpert Help bumps those prices to $35, $74.95, $94.95, and $139.95, respectively (state pricing stays the same). All four of the aforementioned tiers are also available for download ($19.95, $99.95, $109.95, and $119.95, respectively including one state return).
Furthermore, TaxAct distinguishes itself by having TaxAct Estates & Trusts (Form 1041) ($109.95 online, $159.95 download) for handling filing a return for an estate or trust. And it has TaxAct 2020 Tax-Exempt Organizations ($109.95) for those who run an organization subject to sections 501(a), 527 and 4947(a)(1).
In addition to these products, TaxAct has another four business-specific options: built around whether you have a Sole Proprietor (Form 1040C, Schedule C) ($64.95), Partnership (Form 1065) ($109.95), a C Corporation (Form 1120) or an S Corporation (Form 1120S). Each of these options has a downloadable version at a premium ($119.95 for the Sole Proprietor, $159.95 for the rest). TaxAct also offers business filers the chance to get bundles that include individual and business forms.
TaxAct Deluxe 2020 review: State filing
Unlike most other tax software, TaxAct Deluxe charges extra for state returns. State tax filing costs $4.95 per state with the free TaxAct service. State filing costs $44.95 for most other products, unless you’re buying one of the home and business bundles or you’ve downloaded TaxAct. One state e-file is included free in those scenarios.
State filing for some of the specialty packages for businesses, tax-exempt organizations, and estates and trust is $49.95 for state filing online; $50 for the single-state download, $100 for the all-states download.
TaxAct Deluxe 2020 review: Features
As with other tax software, the amount you spend for TaxAct will determine the full swath of features. For example, the free product includes access to multiple tax forms, more than you get from rival services, and will handle the stimulus credit and unemployment income. But TaxAct’s free version lacks basic interest income, which comes with TurboTax’s free product.
As you step up through the available tiers, you will add additional tax forms; this is where having the expertise to know which forms you need helps (view the comparison chart). The Deluxe version adds a litany of additional forms, including itemized deductions, adoption credits, student loans, and Health Savings Account, plus support for Schedule A itemized real-estate taxes and mortgage deductions, and Schedule SE self-employment taxes.
The Premier Edition is more targeted towards investors, with support for additional income streams like stocks, rental property income, K-1 income, and foreign financial accounts. The Self-Employed Edition accounts for personalized business deductions, freelance, business, and farm income; and provides the TaxAct Deduction Maximizer for helping you find potential deductions, and year-round tax support for filing quarterly taxes.
TaxAct Deluxe 2020 review: Available help
New for 2021 is TaxAct Xpert Help, an on-demand feature for accessing live one-on-one support from CPAs, enrolled agents (EAs), and other tax professionals. The concept is similar to TurboTax Live, in that you can connect by voice or video, on demand or by appointment. You can also share the computer screen to make it easier for someone to walk you through the process. However, TaxAct does not offer the option for a professional to review and/or file a return on your behalf, something that’s offered with H&R Block and TurboTax.
TaxAct provides online support in the form of searchable resources on tax terms and guidance for filing your return. There is also “taxpayer support” via non-toll-free phone and email for 12 hours a day on weekdays, 8 hours on Saturdays and 7 hours on Sundays in the lead-up to the April 15 tax-filing deadline. Phone support is available 9 hours on weekdays thereafter. (A disclaimer on TaxAct’s website stresses that it will offer technical help, but won’t give specific tax advice.) This support is to answer questions about the product, but it is not designed to provide any tax guidance, as is available via H&R Block and TurboTax.
Throughout the web interface, you’ll have options for guided data entry; pop-up info boxes to explain specific entry points; and a searchable Help Center pane with links to resources and explanations on TaxAct’s website (including tax calculators, TaxTutor, and has a convenient checklist of documents to make sure you have everything on hand to do your return. If you didn’t sign up for the Xpert Help option at the start, no problem: You’ll be reminded of the option when you first set up your return, and option is never far along the top nav bar.
TaxAct Deluxe 2020 review: Ease of use
Getting started with TaxAct is easy: Pick a product and sign up by entering your email address, waiting for an account verification code to be sent to you, and choosing your username and password. If you are a returning customer after a large gap, the service uses both phone and email to send verification codes.
Once we began our 2020 tax return, we were prompted through a series of steps to enter data. We liked TaxAct’s clean interface, with clear and direct language, as opposed to the faux friendly language of some competing services. The site is responsive and thoughtfully presented, with a left-hand navigation pane, a right-hand help pane with search bar, and a central main screen that uses fonts and graphics to make the pages compelling and easy to read. We could easily follow the prescribed order of topics for completing the Federal return, or choose to jump around by picking something different from the left navigation pane. Within each section, tabs along the top of the screen let you maneuver among the options for that section.
You’ll start with entering basic information about yourself, and then jump into preparing the federal return. TaxAct will prompt to import a PDF of your 2019 return, including support for returns prepared by TurboTax and H&R Block (a step we skipped). You can then enter personal information, relationship status, whether there’s a dependent to claim, and your residency address. This section is streamlined at the start, to get right to the meat of the matter creating your federal return. If you’re unsure what something refers to or what to select, simply click on the information icon to the right of each entry. You’ll get a pop-up overlay describing what something means.
Data entry for the federal return is similarly structured, starting with basic queries about income, investments, family expenses, education expenses, and housing. TaxAct uses this info to find savings, but the company also asks for permission to share your return details with sister company TaxSmart Research LLC to get customized tax tips (you can opt out).
Next you’ll enter your income data. Once you know what you need to enter, you have three methods to do so — an electronic import from one of the 14 supported institutions, manual entry (in a perfect digital replica of the 1099-INT form) or using guided fields to input specific data.
Contrary to what TaxAct indicates on its site, the pricing isn’t very transparent. When we chose a form not supported by the Deluxe version we tested, TaxAct didn’t prompt us to upgrade; as recently as 2018, the service gave a friendly notice to upgrade.
We could next move through the many fields to fill out via the screen prompts, or navigate via the left navigation pane to move through the process of completing our taxes, navigating each section of the Federal form in sequence, Deductions, Credits, Taxes, Miscellaneous, and then see a summary at the end. Each section was clearly presented and business-like in its approach.
TaxAct Deluxe 2020 review: Verdict
With a wide swath of online products, elegant presentation, and the addition of interactive support with live tax professionals, TaxAct Deluxe 2020 impresses across the board–whether your tax needs are simple, or complex. But you don’t get the option to have a tax professional review your return, which makes H&R Block and TurboTax better choices if you’re unsure or need help filing.
As we’ve noted in previous reviews, we feel TaxAct is the best tax software for someone who knows and understands their taxes and is familiar with tax terms and forms, and the clear step-by-step of the interface makes it a pleasure to navigate even if you’re not well-versed in tax lingo. It’s also the best tax software if you’re looking for the best value, without going with a free product like CreditKarma Tax. Meanwhile, the addition of Xpert Help makes TaxAct more accessible than ever.