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TaxAct vs TurboTax 2021 | Tax Software Comparison

TaxAct and TurboTax are two well-known tax programs. Both offer multiple free and paid plans for taxpayers in varying situations. They are also backed with guarantees for accuracy and maximum refunds.

With the addition of TaxAct’s Xpert Help this year, both companies now offer four tiers of online products with the option of one-on-one support from tax experts for an additional fee. The key differences are in price and user experience. So which tax preparation software makes sense for your situation? Keep reading to find out.

Popular Tax Software

TaxAct Pros and Cons

Pros:

  • Affordable: Compared to other tax software programs, TaxAct is less expensive. Its Deluxe edition will run you $24.95. If you go with the Deluxe TurboTax package, however, you’ll have to pay $60

Cons:

  • Less flashy user experience: If you’re comfortable filing taxes yourself and only want guidance when you need it, this might not be an issue. But in terms of user experience, some users say TaxAct can be a bit clunky, even with its new upgrades. TaxAct doesn’t seem to translate tax jargon into layman’s terms the same way TurboTax does.

TurboTax Pros and Cons

Pros:

  • QuickBooks integration: Known as a user-friendly small-business bookkeeping platform, QuickBooks is owned by Intuit, which also owns TurboTax. If you’re a freelancer or small business owner, you can import your financial information directly from QuickBooks and simplify the tax process.

  • W2 photo import: While both TurboTax and TaxAct allow you to import your W2 information from a previous year’s return or other tax software companies’ products, TurboTax lets you snap a photo of your W2 to populate tax forms in its software.

Cons:

  • Expensive: TurboTax is one of the most expensive tax software products on the market. It paid versions range from $60 to $200. In comparison, TaxAct’s solutions cost between $24.95 and $139.95.

TaxAct vs. TurboTax Features

TaxAct Is Best For:

  • Taxpayers who want a variety of options at a lower price

  • Taxpayers who have some tax filing experience

TurboTax Is Best For:

  • Those with complicated tax situations who don’t mind paying extra for more robust tax software

  • Software users who want more hand-holding and a friendly user experience

  • People who use Quickbooks

TaxAct was founded in 1998 by four tax software veterans. While it started as 2nd Story Software, its name was changed to TaxAct in 2012, when it was acquired by Blucora. Since 2000, more than 80 million taxpayers have used TaxAct to e-file their federal tax returns.

Headquartered in Cedar Rapid, Iowa, TaxAct employs more than 200 people. TaxAct offers a number of DIY tax preparation programs for all types of taxpayers. TaxAct’s free version is an option if you have a very simple tax situation. TaxAct Deluxe is a popular choice and may make sense if you’re a homeowner or wish to claim deductions and credits. TaxAct Premier is a solid pick if you have investments and rental properties. TaxAct Self-Employed is the way to go if you work as an independent contractor or sole proprietor or are otherwise self-employed.

For the 2020 tax season, TaxAct launched Xpert Help which allows you to get one-on-one support from tax experts. Versions of each of TaxAct’s online products, Free through Self Employed, are available with Xpert Help for an additional cost. TaxAct also offers simple audit support from its Customer Care Team at no additional charge. For more robust audit assistance, TaxAct will refer you to its partner, Protection Plus.

In addition to tax software, TaxAct provides its customers with access to customized financial reports like TaxWatch and HealthWatch. These reports can give you the chance to save money on both your taxes and healthcare costs.

TurboTax  »

TurboTax

Best Tax Software

Base Fee
$60 & Up
Free Version
Mobile App

TurboTax is a veteran in the tax software industry. It entered the market in 1984 when it was founded by Michael A. Chipman. Since then, it’s become a household name in tax prep software. Owned by Intuit, which also owns QuickBooks accounting software and the personal finance app Mint, TurboTax works to make tax e-filing a simple process.

With TurboTax, you can enjoy an easy-to-use, interview-style interface and choose a free version or paid product in an online or desktop option. TurboTax products will run you anywhere from $60 to $200. If you own a small business, TurboTax Business might be best, as it’s designed to make it easy to enter business expenses and figure out what can be deducted.

Unless you have a simple tax situation, you’ll need to upgrade to TurboTax Deluxe, which searches hundreds of itemized deductions and credits to find every tax break you may be eligible for.

To jump-start the process and save time on manual entry, you can take a photo of your W-2 on your mobile device. Once you do, the software will input the information into the correct forms on your behalf. You can also import your W-2 and personal information directly from your financial institution or payroll company.

TurboTax also offers support from tax experts. With TurboTax Live, you can get live one-on-one help from a pro with the software tier of your choice. However, if you prefer to leave your taxes to the professionals, TurboTax recently introduced TurboTax Live Full Service, which lets you upload your tax documents and haveTurboTax’s experts take it from there.

TurboTax products are backed by several guarantees. These promise accuracy, a maximum refund, accurate advice from its tax professionals, and free audit support year-round, not just during the tax season.

Learn More

For more information about tax software and filing your taxes, see the following guides:

Best Tax Software of 2021

Other Guides from 360 Reviews

For comparisons and advice about other products and services, see our other guides:

How U.S. News Evaluated Tax Software

We explain what matters most to consumers, experts, and professional reviewers when it comes to tax software companies. Then we provide an unbiased evaluation of tax software companies available at the time of review. Our goal is to empower consumers with the information and tools they need to make informed decisions. More information about our 360 Reviews methodology for evaluating tax software companies is here.

U.S. News 360 Reviews takes an unbiased approach to our recommendations. When you use our links to buy products, we may earn a commission but that in no way affects our editorial independence.