“Free” doesn’t always come with a catch. It certainly doesn’t in the case of the TaxACT Free Federal personal tax-preparation website. Yes, you’ll pay $14.99 if you want TaxACT to prepare and e-file your state return, but that’s less than competitors charge. Unlimited phone calls to the company’s tax experts will cost you $7.99 for the entire tax season.
By and large, however, TaxACT Free Federal is TaxACT Deluxe (the company’s paid product), minus a few extras like enhanced guidance, the ability to import investment and W-2 information instead of entering it, assistance with determining the fair market value of items you donate to charitable organizations, and free, unlimited phone support. To get those and other tools, you’ll still pay only $12.99 for Deluxe. Add five bucks to that, and your state return is included in the Ultimate Bundle.
No other tax-preparation solution provider offers anything like this. TaxACT Free Federal lets you prepare and submit all forms and schedules that the IRS accepts through e-file. Competing free websites offer only about half as many, which doesn’t include the Schedule C that’s required of sole proprietors and other small businesses.
So if you’d like to pay nothing to prepare and e-file your 2013 federal tax return, there’s really no question about which website offers the most. TaxACT Free Federal wins the 2014 Editors’ Choice for free online personal tax preparation (for tax year 2013).
More Alike Than Different
TaxACT Deluxe has been a strong competitor for Editors’ Choice for the last few years. Produced by a small company in Iowa, this Web-based application has stood up to financial giants Intuit and H&R Block and come close to winning top honors numerous times. Its iPad version, in fact, did win an Editors’ Choice last year when put up against the tablet versions offered by its two major rivals.
For many years now, there have been more similarities among the top three tax-preparation websites than differences. Like its competitors, the core TaxACT Deluxe site that you can use at no charge (as Free Federal) helps you enter all of your tax-related income and expenses in a question-and-answer format.
It translates all of the lines on all of the IRS forms and schedules that make up the Form 1040, 1040A and 1040EZ into a lengthy series of screens. Using understandable language, it asks for the information it needs, provides simple ways for you to respond (blank fields, lists, labeled buttons, etc.) and—in the background—drops your answers into the correct fields on the official IRS documents. Occasionally, you’ll enter your tax data directly on graphical representations of the forms and schedules.
A Simple Process
TaxACT Free Federal is no better or worse than its competitors when it comes to the mechanics of moving through the 1040′s forms and schedules—except that it supports twice as many of them, all IRS documents that can be e-filed. Like other tax sites, it gives you two options for completing some of the more complex sections. You can choose the topics you need from a list or let the site break down the topics into smaller chunks, walking you through the information needed.
Two other differences: It makes better use of screen space than TurboTax Federal Free Edition, which is prettier, but drags out the process by requiring several clicks to advance through a section that TaxACT Free Federal handles more economically. And unlike H&R Block Free Edition, which forces you to complete a required screen before moving to the next, TaxACT doesn’t require you to complete the screens in chronological order.
One of the advantages of using tax-preparation software and websites is that you’re guided through the whole process, start to finish. Rather than shuffling through a stack of paper forms, you simply keep advancing by clicking a button. Another benefit: The applications do all of the calculations required, and if they err at that, they pay any penalties incurred by the IRS or your state taxing agency.
When you do taxes manually, you have numerous options when you have a question or don’t understand what’s being asked. You can consult the IRS instructions or another reference book. Call a friend or relative. Google it. In all cases, you can’t be sure that the information is correct—or that you can even understand it.
TaxACT Free Federal and its competitors offer a better way. Teams of CPAs and other tax experts work with writers who can communicate simply and clearly to create massive help systems that go into the products. You can access this guidance in a number of ways. Words and phrases on some screens are hyperlinked; clicking on them opens small windows containing explanations, and often the option to get even more help if you’re still puzzled. Sometimes, explanatory information is included on the pages themselves.
Vertical panes that run alongside the working area of each screen often display context-sensitive FAQs or Q&As. You can also enter a word or phrase in a search box and get a lengthy list of resources, either basic definitions or brief articles or links to IRS publications. This convention is one of the weaker links in the help chain. There are usually at least a couple of responses that relate directly to your question, but sometimes the application’s internal search engine throws in links to unrelated content.
I found TaxACT Free Federal more competent when it comes to both the depth of help available and the navigation options to take you there. TurboTax Federal Free Edition leans heavily on its online community for context-sensitive and search box help (which does include frequent input from Intuit employees and tax experts); it’s an odd mix of professional assistance and misspelled, poorly-punctuated questions from other users.
H&R Block offers an online community, but its generous onsite help comes from the organization itself. Some search terms will return numerous pages of Q&As that drill down to very specific minutiae. If you need the help database depth that H&R Block offers, you probably need to pay for tax preparation.
TaxACT Free Federal handles both navigation and tax help better overall, though you don’t have access to its expert system, TaxTutor Guidance, in Free Federal. What you do get when you enter a term in the search box is links to the best answers in the form of FAQs, instructions and pertinent pages on the site.
Excelling in All Areas
There are other ways to get a tax question answered when you’re using a tax-prep website, including emails, online chats and phone calls that are handled by financial professionals. Neither Intuit nor H&R Block offer what TaxACT does in their free versions, though: unlimited phone access to tax experts for $7.99.
In fact, there’s no one area where TaxACT Free Federal’s competitors excel in comparison to other free tax-prep websites. Granted, Intuit does use very skilled graphic designers. H&R Block has that organization’s massive database of tax guidance that it’s built up over decades.
But TaxACT Free Federal is the best overall where it counts most for a free solution. It supports many more tax situations. It moves you through the preparation and filing process quickly and skillfully, thanks to a superior navigation and help system. Intuit, H&R Block and TaxACT are more competitive when it comes to their paid versions. But TaxACT clearly rules when it comes to free tax preparation for 2014. If you’re looking for the best free tax-prep service for your 2013 federal taxes, look no further than our Editors’ Choice, TaxACT Free Federal. If you’re willing to pay a little more, you’ll definitely get your money’s worth with our Editors’ Choice for paid tax-preparation services, TaxACT Ultimate Bundle.
Copyright © 2012 Ziff Davis, Inc