Welcome to the Taxact Vs Turbotax detailed comparison.The average cost of a basic tax form preparation in the US is about $176. This just covers a standard 1040 and state return without any itemized deductions. Wow! And that’s not all. This is just the national average, and the actual cost could vary depending upon a lot of other factors like the part of the country where one looks for these services or the qualifications of the professional one hires. It would also depend upon how complicated and how organized one’s taxes are.
With the cost of filing taxes going up on the one hand and the increasing complexities of filing taxes on the other, the taxpayer is definitely in for a hard time. But wait! There are options! Thanks to some very innovative people, we have a galaxy of Tax Software Programs to choose from. These Tax Software Programs come in handy when one wants to files the tax returns and make the job simple and fast. One just needs to find the right Software Program to address one’s tax filing requirements.
TurboTax is an extremely popular online tax filing program. It is owned by Intuit, one of the best known financial software firms in the US. It relies solely on the online filing and does not have a network of physical branches to support.
The platform is very user-friendly, which takes information from the filer in an easy-to-use interview-style process. It eases the user into the interface. Some very helpful features of its design include popup windows explaining key features of the platform like the internal navigations tools, etc. The series of questions asked initially help to establish the complexities of each individual case and arrive at the forms that are needed to be filled in each case. The software genuinely guides the user to the least expensive plan or upgrade offered.
TurboTax, in addition to the above mentioned smooth customer-friendly interface, has a couple of unique features that are rather recent.
Some additional (relatively new) useful features are:
TurboTax automatically transfers all the information from the federal return to the state return.
Since the complexity of tax filing differs from case to case, TurboTax has four different plans to choose from. This would depend entirely on the needs of the tax filer. And the best part is the user need not break his/her head over this. The site guides one through and helps one make that choice as he/she answers the questions. The four plans are:
This is best suited to people with simple tax needs. One can prep, print, and e-file both state and federal taxes for free. It works well for people who need to claim only the basic deductions like the standard deduction, the earned income tax credit, or the child tax credit. The filing is free until a few weeks before the deadline. After this time, a fee is applicable. The free version, however, does not have schedules like capital gains, itemized deductions, rental income, or the self-employed schedule.
This is recommended for a moderately complex situation. It could cost one $40 to $90 for DIY and more if you choose the TurboTax Live version. Apart from the benefits of the TurboTax Free, through this plan, one can claim other deductions like the deductions on:
One can even file Schedule C for business income (or freelance income), but not the related expenses. In this plan, one cannot report capital gains or rental income.
This plan, in addition to inclusions in the Deluxe version, supports Schedules D, E, and K-1s. It could cost about $70 to $90 for DIY and higher for the TurboTax Live version.
TurboTax Premier has been redesigned and covers almost all investment tools like stocks, bonds, cryptocurrency, rental income, Employee Stock Purchase Plans, etc., and provides users personalized guidance with all of these. It even automatically imports investment transactions from hundreds of financial institutions, thus saving time and minimising errors.
It also lets you deduct appraisal fees and points if you refinance your home. So, even if you don’t have an investment property, you could save money on taxes by using the Premier plan.
TurboTax Self Employed
This plan is best suited for contractors, freelancers, side-hustlers, and small business owners. Apart from the benefits of the Premier Plan, this plan also includes Schedule C, and one can deduct business income and expenses. Deluxe also gives access to Schedule C without the option to deduct expenses. This plan even suits individuals with complex tax returns.
It costs about $90 to $120 for DIY and more for the TurboTax Live version.
It comes with a one-year subscription to QuickBooks Self-Employed. It even lets one import one’s business information directly from QuickBooks Self-Employed. This is a useful feature for those using this QuickBooks software regularly.
Each of the above plans has a TurboTax Live version. One can upgrade to this version if one wants live access to a CPA or an EA (Enrolled Agent). The IRS regulates the CPA’s and the EA’s. So, one need not worry about looking for their credentials.
Apart from giving on-demand answers to one’s questions, the CPA or the EA even reviews the final taxes.
All of the above-mentioned prices go up as one gets closer to the deadline of April 14.
It is possible to run an audit check to find out if there is a likelihood of getting audited. Also, if for some reason one is audited, one is entitled to free support from TurboTax Support. This includes information on notices, letters to write and help with the future course of action. A lot of information is available on approach to handling audits.
There is also the option of the TurboMax package. One can opt for this if there is a high likelihood of getting audited. At an additional cost of $49.99, one gets the following advantages:
TurboTax also offers excellent customer service through various channels like online forums, emails, phone, or online contact.
TurboTax Mobile App
TurboTax also has a full-service mobile app that is free for registered users. It has some beneficial features, particularly if one has signed up for TurboTax Live.
Some additional beneficial features are also offered by this software:
TaxAct is definitely popular among those looking for cheaper platforms to file their taxes. It is more affordable than a lot of other products in the market.
This platform is user-friendly and asks a series of questions once one logs in and creates an account to establish the need of the user and accordingly proposes the best possible plan. Through the process of filing, it asks one to upgrade if the forms one needs are not available under the free version or if one’s gross income is too high.
After signing in, one can choose to import last year’s tax information, which saves some steps initially. It is even possible to upload them to TaxAct if they are saved in the form of a PDF file.
While filling in different portions of one’s returns, one can use the help center on the right sidebar. It is a quick way of getting answers to your tax-related queries.
Another interesting feature is the ability to bookmark questions. One can come back to specific questions if one does not have an answer to them by just marking a star on them. So, one can skip around fairly easily. A banner running on the side keeps track of where one is in the process of filing.
There are a lot of popups while one is sailing through the site. These can be very useful for first-time filers, but unnecessary for the regular filers who know their needs.
TaxAct offers some great benefits as well. These are:
Depending on the tax needs of an individual, TaxAct offers four different plans one can choose from:
This is for individual filers with simple tax needs. This plan works for those who do not have a lot of deductions to claim. It will, however, not work for someone who owns a home.
This plan includes the following:
The list of forms covered under this free version is actually quite extensive.
This version is for moderately complex tax situations, including homeowners and investors. It lets the taxpayer itemize and claim several other tax deductions and credits. It offers unlimited email or phone support from tax specialists. So apart from what is included in the Free plan, it offers the following additional benefits:
Price: $19.95 to $ 29.95 federal, $ 39.95 per state
This plan supports Schedules D and E, hence required if one has rental income or income from other investments. This includes all that is present in Deluxe+ and some extra benefits like:
Price: $19.95 to $39.95 federal, $39.95 per state.
This is TaxAct’s highest-paid version and is best suited for freelancers and the self-employed people. People with a high degree of tax complications need this plan. It comes with unlimited tech support via chat and screen-share, phone, and a tool for maximising business deductions.
The additional benefits of this package include:
Price: $44.95 to $74.95 federal, $39.95 per state.
TaxAct has a huge knowledge base in the form of FAQs. It also has email and phone-based support to help customers. While this support is available only on weekdays through the year, it is extended as the filing gets closer.
A handy feature is the accuracy guarantee. TaxAct offers a guarantee of accuracy. So, if there is an IRS penalty related to calculation errors, TaxAct will repay the user equivalent to the amount of penalty. It also offers audit support. While it is not as robust as some of the more expensive competitor sites, but the audit center helps the user with the basic steps of dealing with an IRS audit.
Taxact Vs Turbotax A Final Comparison
While comparing Taxact Vs Turbotax both the platforms have some very interesting features to offer, the better option depends upon individual needs. The choice would be personal to each user and depend upon what it is that one is looking for. If one is looking for a cheaper option, then TaxAct is definitely the choice to be made. The free version of TaxAct has much more to offer than the free version of the TurboTax. Even the corresponding paid versions of TaxAct are cheaper than those of TurboTax. If, however, it is face to face individualised support that one is looking for, then TurboTax would be a better choice. Both the companies help with the tax refunds and help with audit defense at an additional cost. The TaxAct offers the additional accuracy guarantee. Lastly, though both have a user-friendly interface, if one has to pick the smoother version, the TurboTax is slightly better and ensures one’s money’s worth.