According to my tax software poll, it appears that the vast majority of readers are using one of the “big 3″ tax filing software: TurboTax, H&R Block At Home, or TaxACT. This matches industry-wide estimates; Did you know that H&R Block tried to buy TaxAct last year but was blocked by the Justice Department as it would hurt competition and basically create a duopoly?
Here is my hopefully-useful review of TaxACT.com, the first part of a series to try out each of these three products to do my real-life taxes and then compare each of them.
Here’s a quick summary of our personal tax situation, which I think should cover the most common features of tax software. We don’t have any rental income, however.
- Married filing jointly, subject to state income tax
- Both with W-2 income, as well as self-employed income (Schedule C).
- Interest income and dividend income from bank accounts, stocks, and bonds (Schedule B).
- Contribute to retirement accounts (401ks and IRAs).
- Capital gains and losses from brokerage accounts (Schedule D).
- Itemized deductions (Schedule A), including mortgage interest and charitable giving.
Of the Big 3, TaxACT regularly has the lowest retail price. I will be using the online version of TaxACT, of which there are two editions:
- Federal Free Edition (Basic): Free for Federal return + efile, $14.95 for State return + efile
- Deluxe: $9.95 for Federal return + efile, $8.00 for State return + efile
Both versions include all Schedules and all e-fileable IRS Forms. Reasons for upgrading to Deluxe (basically an extra $3 for Fed + State) are the ability to import information from your 2010 TaxACT return, import info electronically from Gainskeeper, help with valuing donation items, as well as free phone support. If you are not subject to state income tax, then you can indeed use TaxACT completely free including efile regardless of income level or complexity of return. Nice! There is also a desktop version available on CD and via download for Windows only.