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Best Free Online Tax Software: TaxAct

Best Free Online Tax Software: TaxAct
Credit: TaxAct

After conducting a thorough review of online tax software, we recommend TaxAct as the best free tax software for small businesses. We chose TaxAct from dozens of online tax software options. To understand how we chose TaxAct, you can look at our methodology and a list of online tax software vendors on our best picks page.

TaxAct's free edition is excellent for filers with simple federal and state returns. The software supports forms 1040A and 1040EZ, which essentially means personal tax filers with incomes below $100,000 can use TaxAct for free to fulfill their tax requirements. While TaxAct offers the best free online tax software we reviewed, filers with more complex needs will either have to upgrade or use a different service.

Free state filing is included with the free version, and for $10, users can import the previous year's information not just from TaxAct, but also from TurboTax and H&R Block (two of our other best picks.)

As far as free products go, TaxAct offered a complete and accurate platform that didn't feel like it was skimping on the product. While not as fluid or guided as leading paid products, TaxAct does a great job of making filing straightforward and hassle free. Additionally, the availability of tax-time resources and assistance, regardless of subscription level, means even free filers don't have to go it alone.

We chose TaxAct as our best pick, because unlike many free online tax applications, TaxAct offers a product that is professional and comprehensive. Although access to more complex forms is limited, TaxAct free still inspires trust with the quality of its free features.

TaxAct's user interface is less user friendly than that of some paid software we reviewed. It lacks the guided step-by-step feel of our other best picks, but it still isn't difficult to navigate. Rather than respond to prompts, TaxAct users navigate through a series of tabs to manually fill out fields and follow checklists. While all of the needed information is immediately accessible, it takes more focus on the user's end to ensure everything is properly filled out.

While TaxAct's features are limited compared to our other best picks, its offerings are more plentiful compared to other free filing software.

  • Filing forms: TaxAct's free edition includes 1040A and 1040EZ filers, which are amended versions of the 1040 form for personal income. Filers with more complicated tax situations either have to upgrade to TaxAct's paid versions or select a different service.
  • E-filing: TaxAct supports e-filing your forms directly with the IRS upon preparation. You can also check in on your e-file status through TaxAct to ensure prompt delivery of your tax forms.
  • Refund status: Refund status or amount owed are estimated in real time as you complete your forms, giving you a clear picture of what you can expect this year.
  • Previous year import: If you've filed with TaxAct, TurboTax or H&R Block in the past, you can import your previously filed tax information to expedite the process.
  • Past returns: TaxAct provides all users with access to seven years of past tax returns information for free. Not only is this useful for personal records, but in the event of an audit, you have access to an archive of information throughout much of the past decade.
  • Free support: All plans under TaxAct get complete access to technical support, customer service and online assistance materials. These resources walk users through frequently asked questions or snags, and when a major problem with the software comes up, technical support is available to help even free filers.
  • Free mobile app: TaxAct also includes access to a free mobile application for iOS and Android, although its functionality is limited compared to the desktop version of the software.

If TaxAct seems like the solution for you, but you require more than the 1040A or 1040EZ forms, upgrading is still relatively cheaper than other leading solutions on the market.

  • Plus: TaxAct's Plus plan expands form access to include those most important to investors. For $37 (and $38 dollars extra for each complex state return) users obtain all the features included in the free version, as well as investments and rental income, and access to even more deductions and credits.
  • Premium: $47 grants users access to more comprehensive forms, including all business and self-employed forms. Like its Plus plan, prior year import is included in the Premium version, and complex state returns cost an additional $38.

These plans are more basic and straightforward than some competitors, but the price is lower for a tax preparation program that still delivers a quality experience and accurate service. While we chose TaxAct as our best free online tax software application, the paid versions are also solid choices for those preparing more complicated returns on a budget.

When we called TaxAct posing as a small business in need of simple tax filing solutions, we were met with a short wait time. It wasn't long before we were connected with a representative who explained what the free version does and does not include.

We felt much better acquainted with the software's capabilities and limitations, despite our prior research, after we spoke with customer service. We didn't get the feeling that we were being urged to choose TaxAct when we said it was just a preliminary discussion; however, we were explicitly asking about the free edition. It's unclear if this same level of acceptance would have been shown were we interested in premium versions of TaxAct's product. Overall, our customer service experience was exceptional.

TaxAct's service and support includes a slew of tax-time resources like how to file extensions, new IRS forms, W-2 assistance and how to contact the IRS. TaxAct also includes a resource center for audit assistance, which guides users through navigating an IRS audit.

TaxAct's phone number is difficult to locate on the website, but it does maintain a support center via phone and email. Business hours for the company are Monday through Friday 8 a.m. to 5 p.m. CT from April 19 through early January. During tax season, they expand their hours to include Monday through Friday 7 a.m. to 9 p.m. CT as well as Saturdays (8 a.m. to 6 p.m. CT) and Sundays (10 a.m. to 5 p.m. CT). Every version, including the free edition, comes with unlimited support.

TaxAct's free edition isn't going to measure up to top-tier paid programs, but it does a great job of offering personal income tax services at no cost. Still, if your business requires more complicated filings – for instance, companies that aren't structured as a pass-through entity – you're going to require a paid service to ensure accuracy and access to all of the necessary forms.

However, for straightforward tax situations, like those involving LLCs, TaxAct's free version should cover your needs and go above and beyond other free software.

Already prepared to choose an online tax software? Here's a breakdown of the rest of our coverage:

Adam C. Uzialko

Adam received his Bachelor's degree in Political Science and Journalism & Media Studies at Rutgers University. He worked for a local newspaper and freelanced for several publications after graduating college. He can be reached by email, or follow him on Twitter.