Contributor, Benzinga
January 15, 2024

There’s no denying that filing your taxes online can lead to a speedy tax refund, but that’s just one reason for online tax filing. Along with speed, you also get convenience, accuracy, software-driven assistance and security. Learn more about the best tax software to use and we’ll also show you the differences between TurboTax and TaxAct.

TurboTax vs. TaxAct: Overview

Two of the top tax preparation platforms are TurboTax and TaxAct. We’ll take a closer look at what they have to offer to help you decide which one is best for your tax situation.  

Who’s TurboTax For?

  • securely through TurboTax's website
    securely through TurboTax's website
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TurboTax is great for a wide range of online tax filers, including:

  • Students or parents/guardians of students
  • Parents with children or adults with dependents
  • Homeowners and anyone who has a mortgage
  • Self-employed individuals
  • Members of the military
  • Those with business income
  • Anyone who must pay investment taxes or has rental property income

TurboTax is also a great option if you are filing as a single taxpayer or as head of a household, or if you are a widow or widower. Taxpayers who prefer to file in Spanish will also find TurboTax a great tax-filing tool because of its Spanish language versions.

Who’s TaxAct For?

  • securely through Tax Act's website
    securely through Tax Act's website
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TaxAct offers several versions of its software suitable for tax filers based on your tax-filing status. These include:

  • Individual filers
  • Filers with children, dependents and college expenses
  • Homeowners and those with credits, deductions, adjustments and donations
  • Filers with more complex filing needs, including those that have to deal with brokerage taxes, own rental property or need prioritized support
  • Self-employed filers
  • Sole proprietors and independent contractors
  • Those who file estate and trust returns
  • Tax-exempt organizations

If you are a tax professional who assists clients with online tax filing, TaxAct also has several versions of its professional software.

TurboTax vs. TaxAct: Platform and Tools

What TurboTax Offers

TurboTax is available across a variety of platforms, including desktop software for several Windows OS versions (from Windows 7 to Windows 10), and for Mac OS. You can also get access to the software on mobile platforms for iOS (Apple Store) and Android (Google Play) devices. Depending on which product you order, you can use the software online, or you can download a desktop version on CD for subsequent installation. TurboTax includes an array of features and tools, such as:

  • Automatic search for 350+ deductions
  • Income tax calculator
  • Mobile app to estimate your tax refund
  • Tool to track your charitable donations
  • Tax documentation checklist
  • Education credits and deduction locator
  • Self-employed expense estimator
  • Tools to track your refund and more

These platforms support individual tax-filers and various types of business users including partnerships, S-Corp, C-Corp, multi-member LLC, trusts and estates. For desktop platform users, TurboTax can interface with Intuit’s QuickBooks Desktop accounting software to import income and expenses and automatically classify them.  

What TaxAct Offers

TaxAct has either online or desktop (downloadable) platforms for individual filers and a professional platform for accounting practices. There are also a set of mobile apps that you can download from the App Store and Google Play.    Support is available on Windows 7 and up, and Mac OS X 10.0 and up (where applicable). The software runs on a wide range of browsers, including Chrome, Firefox, IE 11, Edge and Safari. Some useful features and tools include:

  • Tax calculator to estimate your tax liability
  • Tax bracket calculator
  • Self-employment tax calculator
  • Deduction Maximizer to assist self-employed filers claim the maximum eligible deductions
  • TaxActExpress filing app for iPhone and Android devices
  • Electronic import of investment data from online brokerages like Betterment and Raymond James
  • Data import from other popular tax software including TurboTax and H&R Block
  • Tools for professional tax practices, such as Client Xchange, to securely exchange documents with clients and a host of tax practice management tools

The website also has other useful tax tools and calculators that you can access such as a health care tax penalty calculator and a health care tax credit calculator. By using TaxAct's online tax software, you can easily prepare your own taxes and get the maximum refund guarantee. To help you get organized, TaxAct also offers a wealth of tax-planning checklists.  

Bottom Line

Both platforms come with some great tools and features and include support for mobile and desktop versions.

TurboTax vs. TaxAct: Research Offerings

What TurboTax Offers

TurboTax offers a range of videos that may help you research your unique filing needs. You can view the video or read the transcript to learn more about how to address your unique situation. The site even suggests additional research materials or videos on related topics. There’s also a well-curated blog where you can read about the latest tax law changes and how they might impact you. You’ll also find insightful articles, commentary and opinions about different aspects of the tax code and how to use them to your advantage. You’ll even find Spanish versions of these resources available. The Intuit Tax and Financial Center is yet another Turbo-affiliated portal where you’ll find loads of research materials on a broad range of financial and tax topics.

What TaxAct Offers

TaxAct’s blog supports users with a range of content on trending and popular tax topics. If you want to stay on top of everything that’s happening on the tax front, you can also subscribe to the company’s tax newsletter. The company has a well-stocked online tax library of content on current tax topics. The topics, indexed under categories such as business, employees and education, are easy to search and access. You can also quickly access a host of IRS and state resources without leaving the TaxAct website.

Bottom Line

You’ll find both products offer extensive research and learning tools online. Turbo’s Tax and Financial Center, however, does offer you something extra.

  • securely through TurboTax's website
    securely through TurboTax's website
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TurboTax vs. TaxAct: Commission and Fees

TurboTax Fees

TurboTax offers online and desktop options, and each category offers multiple versions. Depending on which version you choose, you’ll have access to a varying set of features.Paid online options vary in price from $39 and $89, while desktop options range in price from $40 to $120. You pay an additional fee for each state filing. TurboTax also offers a free version that covers tax-filing basics as well as special discounts for military personnel. Invite a friend to use TurboTax, get $25 off and your friend will get 20% off.

TaxAct’s Fees

TaxAct’s products are priced based on its online, desktop or professional versions. The company also offers a set of home and business bundles that can lead to price savings: Online versions range in price from $9.95 to $49.95. Desktop versions are available at price-points ranging from $24.95 to $104.90. Professional practice versions of the software range from $129 to $1,200. The home and business bundles cost $200 for all bundled versions. There is also a free option available for online users. If you refer a friend, you could get a $20 Amazon gift card and your friend will receive 20% off a TaxAct filing.

Bottom Line

Both TurboTax and TaxAct can provide you with a wide range of paid versions to choose from, depending on your personal tax situation. Both products offer free versions, but on a version-to-version comparison, TaxAct is the lower-cost option.

  • securely through Tax Act's website
    securely through Tax Act's website
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    Seasoned Business Owners
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TurboTax vs. TaxAct: Security

What TurboTax Offers

The TurboTax team works closely with the IRS and State Department of Revenue to provide its users with a suite of security and anti-fraud features, including:

  • Multi-factor authentication
  • Fingerprint recognition Touch ID
  • Data encryption
  • Login and activity history logs
  • Auto email notifications

The site also offers helpful tips and information on how to secure your account and how to avoid becoming a fraud or phishing victim.

What TaxAct Offers

TaxAct has implemented several security features in its software, including:

  • Mandatory checks for more complex passwords
  • Security questions
  • Email or mobile phone 2-step authentication
  • Trusted device verification
  • Encrypting all information using 128-bit Secure Socket Layers (SSL)

TaxAct uses industry standard security certificates and participates in security protocol compliance programs that ensure the software adheres to the latest data protection and security standards.  The company partners with online security industry leaders like Trustwave and VeriSign (Norton) to implement and maintain its security protocols.

Bottom Line

Both platforms offer industry standard, bank-grade security to users.

TurboTax vs. TaxAct: Customer Support

What TurboTax Offers

With TurboTax, you’ll have access to wide-ranging support, from choosing the right product to starting the tax filing process. If you want more support, you can:

  • Reach out for answers through the community discussion board
  • Talk to live credentialed tax experts through TurboTaxLive
  • Receive live phone support from a dedicated phone line with the TurboTax Advantage Program
  • Browse for help through a library of online support videos

Intuit’s support for TurboTax goes beyond the tax returns filing stage. You’ll have access to after-you-file support resources, as well as guidance to support you in case you get audited by the IRS.

What TaxAct Offers

TaxAct support is available throughout the year, including weekends during the tax-filing season. TaxAct Premier+ support gets you prioritized tax assistance from a team of top-tier tax specialists through a dedicated phone line. There are extensive online resources to complement email/phone support, such as:

  • Audit Assistant gives you access to a range of IRS notices and information to use in the event of an IRS audit
  • Tax help online
  • Extensive online information on using various TaxAct platforms effectively
  • Access to all software updates and upgrades (even for prior versions) in one place

Through the IRS tax filing deadline, TaxAct support is available via email or phone, on weekdays from 8 a.m. to 8 p.m. CST and on weekends until 5 p.m. CST.

Bottom Line

Both products offer extensive support options, including personalized support to users of higher-end products.

TurboTax vs TaxAct: Ease of Use

What TurboTax Offers

TurboTax starts off by making it extremely easy to select the version that best fits your needs. An easy-to-relate interface then guides you through the tax filing process by automatically searching for and recommending applicable deductions and tax credits. By allowing you to seamlessly import a PDF version of your returns, TurboTax makes it easy to switch to its platform if you’ve previously used one of TurboTax’s competitors. You can also securely and conveniently switch devices and pick up from where you left off. If you have investment income, TurboTax can save you a lot of time by automatically importing investment information from participating financial institutions. You can also directly import your W-2 or take a photo of it and have TurboTax process it. The platform makes it easy to pay for your filing, even if you don’t have a credit card. You can apply your federal tax refund to pay for TurboTax.

What TaxAct Offers

In addition to an intuitive user interface and pre-populated fields (with user-override capability), TaxAct offers several features that make it simple and easy to use:

  • Quickly import last year’s returns from competitor software and get a flying start on your current-year taxes.
  • Use the photo option to take a photo of your W-2 on your phone and complete your tax filing even more quickly.
  • Helpful Review Alerts feature flags missing, incomplete or incorrect information
  • The Life Events feature captures milestone changes in your life (marriage, change in jobs, natural disasters, separations) and uses them to guide you through the tax filing process.

These tools give users, especially first time filers, an added level of comfort when using the software.

Bottom Line

Both platforms offer features that enhance their ease of use. However, when it comes to additional bells-and-whistles, TaxAct is a relatively “no frills” platform because of its lower price-point.

TurboTax vs. TaxAct: Which Tax Software is Right for You?

A cool feature of TurboTax is its “Alexa, ask TurboTax…” that interfaces with Amazon’s voice-activated Alexa Echo device. One great feature of TaxAct is its “$100K Accuracy Guarantee,” which refunds the cost of purchases, makes up for lower refunds or higher taxes and protects you against legal or audit costs of up to $100K if TaxAct gets your taxes wrong.

Frequently Asked Questions

Q

Which is better, TurboTax or TaxAct?

A
Both TurboTax and TaxAct are popular and reputable tax preparation software providers, offering similar features and services. Some may prefer TurboTax for its user-friendly interface and comprehensive guidance, while others may prefer TaxAct for its affordability and simplicity. It is recommended to compare the features, pricing, and reviews of both options to determine which one suits your specific requirements and preferences.
Q

TurboTax vs. TaxAct, which is easier to use?

A
This depends on individual preferences and needs. However, in general, TurboTax is often considered to be more user-friendly and intuitive. It offers a simple and guided step-by-step process, along with extensive customer support and resources. On the other hand, TaxAct may have a more straightforward interface but may require users to navigate through more complex menus and options. Ultimately, it is recommended to try out both platforms or read reviews to determine which one would be easier to use for your specific tax filing needs.
Q

Can I switch from TurboTax to TaxAct?

A

Yes, you can switch from TurboTax to TaxAct. Both software programs serve the purpose of helping individuals with their tax preparation. However, it is important to note that the process of switching may involve transferring your tax information and settings from one program to another. It is recommended to review the specific instructions and compatibility requirements provided by TaxAct, and ensure that you have access to any necessary documents and records from your previous tax returns.