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Which One Should You Choose in 2018?
Competition is quite fierce between two of the most prominent providers of tax-preparation software’s, so in this article, we take a more in-depth view of whether Taxact vs Turbotax can offer you the best refund this tax year. We outline the pros and cons for both and provide you with what we think is the clear winner between these two giants in tax preparation. Are you ready? Let ‘s go!
Overview of TurboTax
This is arguably the most common DIY tax software, which has become a household name over the years. It’s also quite appealing that almost every bank offers a discount for Turbotax, an excellent example of this is Chase bank where customers can click a link from their website. We have a full review of Turbotax here if you wish to get a full in-depth rundown of the tax capabilities and make sure you also see our turbotax.com service codes and deals
If you’re able to itemize, deduct mortgage interest, or have received a 1099-G (State Tax Refund) or a 1099-Misc (Freelance and Independent Contractor Income) you want to be in their most basic plan.
individuals who’ve sold any stocks or investments and are required to update the cost-basis data on their Schedule D will automatically be upgraded to the Premier service at the right time. This tier helps you to file a Schedule E in case you receive rental property income.
- Home and Business:
for the self-employed or those who own a small business with miscellaneous expense’s that exceeding $100, you have to upgrade to the highest tier. But if your 1099-Misc expenses are the cellphone, Mileage, and other expenses less than $100, then you can use one of the lower options.
Overview of Tax Act
TaxAct provides several products based on your income tax status. They primarily offer four central plans that you can choose from free, basic, plus, and premium. The free option assists with tax returns, and the service is free of charge when you file for state and federal tax returns. While the free plan of TaxAct comes with a $15 fee when you want to import your last year’s TaxAct return file, it’s quite reasonable considering how crucial it is to get this year’s data correctly.
• The free efile plan provides support for 1040EZ and 1040 A
• There are four paid plans that range from $59.99 to $179.99 and you can always go with the new Turbotax Live with help from a CPA
• For the free version, State return prep is $0, and $39.99 for the paid versions
• The free plan offers support for 1040EZ and 1040A
• There are three paid versions that range from $27 to $51
• For the free plan, the State return rep is $0 and $37 for the paid versions
Pros of TurboTax
• A guaranteed maximum refund
• CD, online, or downloadable software is available
• It’s the best-selling tax filing software on the market
• Free state and federal e-filing for 1040EZ
• 5 e-files are available and can cover your whole family (typically with download or CD software)
• Fully featured mobile version for both Android and iOS
• Every edition comes with state filing including the student version
• Free assistance with Affordable Health Care Act to calculate penalties and tax credits
• Excellent customer service available through email, telephone, and live chat. Added support for tutorials, user forums, and FAQs section.
Cons of TurboTax
• Quite expensive
• Added charges for audit defense
• Lacks physical locations where you can meet with a tax specialist or file in-house
Pros of TaxAct
• Accuracy guarantee, price lock guarantee, maximum refund pledge, and a satisfaction guarantee.
• 5 e-files and with every purchase of the higher-level download software you get 1 state return
• Free state and federal e-filing for 1040EZ and 1040A
• Mobile versions are available
• Professional audit defense
• Q&A interview guide filters for details about the previous year’s taxes and health insurance
• Provides professional tax products for accountants, CPAs, and other professionals
• Ability to import W-2 forms from the participating institutions, previous year returns, as well as charitable donations.
Cons of TaxAct
• No feature for user forums
• Can only import 1099-B CVS file formats
• Coupon code
Both TurboTax and TaxAct allow you to use your refund to pay for the fees incurred during tax-prep. However, there’s a fee for that: $39.99 with TurboTax and $25 with TaxAct.
TaxAct has an audit assistance feature that consists of an FAQ page on their website. You also have the option to purchase ‘Audit Defense’ a product offered by a company they partner with; Protection Plus. The coverage includes 3-year audit services for the current year’s return, and a comprehensive resolution and response strategy, assistance with denied credits, state and IRS correspondence, as well as tax fraud and tax debt assistance. The service is also included in their Premium package.
When you get an audit notice, you’ll receive free guidance from tax experts on how to prepare and what to expect. If you want to have someone physically represent you in front of the IRS, you have to buy their Audit Defense product when you file. TurboTax charges $44.99 for it.
In the battle between Taxact vs Turbotax the price difference between TurboTax and TaxAct starts to be a clear indicator of who is the better option we found. For most people, this is a non-issue, but if you’ve worked in different states with different income taxes, the $37 fee charged by TurboTax per state can add up quick.
However, every battle has a clear winner, and this year, we crown TurboTax the winner of tax-prep software in 2018, based on personal experiences and the experiences of our team.