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TaxACT Online Ultimate 2012

*Est. $20
Reviewed
March 2013
by ConsumerSearch
TaxACT Online Ultimate 2012

Best tax software for simple returns

Pros
  • Fast and accurate
  • Free phone or chat help from experts
  • Free DocVault app to log receipts, invoices
Cons
  • Less sophisticated import, help features than rivals
  • Download/CD version isn't Mac-compatible
  • Audit Defense costs extra
Where to Buy
 

Bottom Line

TaxACT Online Ultimate 2012 is a fantastic tax-prep program at a fraction of the price of TurboTax or H&R Block At Home, according to reviews. "I said last year and will say again this year: The TaxACT site should be your first stop when you're getting ready to endure your annual tax ordeal," says Kathy Yakal at PCMag.com. And now it's even better. TaxACT adds enhanced importing and built-in tax help, and unlimited free phone help from tax experts. All that helps it inch closer to stealing our Best Reviewed spot from the pricier TurboTax Deluxe 2012 (*Est. $50) .

Ease Of Use

Not as easy as TurboTax -- but close. TaxACT is fast and nearly as effortless to use as TurboTax, experts say. "I plowed through our return without difficulty, though I did have to type in more of our information," says The New York Times' Tim Gray. "TaxACT imported less of last year's data than software from TurboTax and H&R Block."

TaxACT takes a big step forward this year by completely rewriting its built-in tax help, Yakal says. It's now "clearer and simpler" but not quite as good as TurboTax, which "sometimes answers your questions before you even know to ask them," she notes. With both programs, you can always call or chat/email a tax expert for free, with no limits. H&R Block At Home limits you to one email or chat session.

Like its rivals, TaxACT behaves like a tax pro, asking you simple questions and then filling in all of the correct forms for you. Both it and TurboTax let you skip around in your return if you like; H&R Block At Home forces you to go in order.

Accuracy

No math mistakes, but various brands may provide different totals. Good tax software always gets the math right, experts say, but you can still get dissimilar totals from different software. Confusing questions may lead you to type in the wrong numbers, or maybe the program doesn't hunt hard enough for deductions. Testers watch out for this.

In one review, a Sacramento, Calif., TV reporter asks three viewers to do their taxes with the free versions of TaxACT, TurboTax and H&R Block software. One man gets a $25 smaller federal return from TaxACT Free Edition 2012, the brand he usually uses, but it's not enough to make him switch. The paid versions give more guidance, which can help users answer the questions correctly.

Experts find no discrepancies with TaxACT, and like all good tax software, it double-checks your return at the end. The program flags mistakes and lets you correct them right on the screen without having to hunt back through your return.

Features

Upscale features at a bargain price. "TaxACT's selling point is price," says Gray. It offers most of the same features as its rivals at a fraction of the cost. Consider this: TurboTax and H&R Block At Home both charge $30 for their Deluxe online versions, the ones most people will want, plus another $35 or so for state filing. Meanwhile, TaxACT Online Deluxe costs $10 and state filing is another $10. TaxACT Online Ultimate just bundles these together.

"TaxACT Deluxe Online does practically everything TurboTax Deluxe Online and H&R Block At Home Deluxe Online do," says Yakal. You can import last year's return, get lots of guidance for deductions like home mortgages and childcare, and a donation assistant can tell you how much those clothes and toys you gave to charity are worth, just like the pricier brands. All TaxACT versions can also use the free DocVault app, which lets you snap photos of your receipts, invoices and more throughout the year and store them until tax time.

However, TaxACT Deluxe imports fewer types of data than its rivals. For example, you'll have to get data from your brokerage firm in a comma-separated (CSV) file or TaxACT won't recognize it. "TaxACT is not the best option for sophisticated investors," Yakal points out.

If you don't need all those niceties, try TaxACT Free Edition 2012. Unlike other brands, TaxACT's free version is exactly the same as Deluxe "in terms of actual tax preparation tools," Yakal says. You won't get extras like the import tool or donation tracker, but if you don't need those, you can prepare and print or e-file even complex federal tax returns free. State prep/e-file costs $15.

All TaxACT programs offer a CD/download version for just a few dollars more, but they aren't Mac-compatible. TaxACT's online versions work with Windows, Mac and iPad.

Audit defense costs $40 more with any TaxACT program. You can buy it before you file, and if you're audited, a tax pro will handle all communications and meetings for you and negotiate with agencies to minimize financial impact for as long as your return can be audited. TurboTax charges $60 for the same service, and it's free with H&R Block At Home's tax-prep programs.

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TurboTax Deluxe Federal + E-File + State 2012
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Our Sources

1. The New York Times

Review Credibility: Excellent TaxACT Online Ultimate works just as well as TurboTax Premier desktop software in this test. TurboTax imports more data, but TaxACT is much cheaper. Gray successfully does his taxes with H&R Block's software, too, but he hit snags on the install.

Review: Three Programs, Two Ways: Test-Driving the Tax Software, Tim Gray, Feb. 9, 2013

2. PCMag.com

Review Credibility: Excellent Try TaxACT first, Yakal advises after a thorough test. She says it's equal to TurboTax in most ways although the latter's built-in help is just slightly better. However, TaxACT costs much less, just $10 for the full-featured Deluxe version.

Review: TaxACT Deluxe Online, Kathy Yakal, Jan. 25, 2013

3. KMAX (Sacramento, Calif.)

Review Credibility: Very Good This Sacamento, Calif., CBS affiliate asks three viewers -- all single, no kids, with simple taxes -- to do their taxes with the three big tax software brands' free versions. Each one prefers a different brand. One viewer usually uses TaxACT, but this year TaxACT Free gives him a $25 smaller federal refund than the other two brands. Still, he says the difference isn't enough to make him switch.

Review: Call Kurtis: The Great Tax Test: Which Tax Preparer Gave the Biggest Refund?, Kurtis Ming, Feb. 21, 2013

4. TopTenReviews.com

Review Credibility: Fair In this site's test of 10 software brands, TaxACT finishes second just behind TurboTax. TaxACT is judged perfectly accurate, with excellent ease of use, and very good help and support. This is consistent with other reviews and a full write-up explains the scores. However, this site bills itself as an Authorized TurboTax Affiliate and a big banner ad for TurboTax dominates the page. Other sources seem more unbiased.

Review: TaxACT 2013, Editors of TopTenReviews.com, Not dated

Tax Preparation Software Runners Up:

TurboTax for iPad 2012 *Est. $30 and up to file (free download)

2 picks including: Los Angeles Times, Macworld…

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