TaxACT Ultimate Bundle (Online) 2014 (Tax Year 2013) review

TaxACT Ultimate Bundle wins our Editors' Choice for Deluxe tax-preparation websites this year because it offers the best help system, an effective user interface and navigation tools, and the lowest cost of its competitors.

Much evidence to the contrary, we sometimes get suspicious when a product or service claims to be as good as or better than a competitor’s that costs twice or three times as much. High price equals high quality, we often think. TaxACT Ultimate Bundle proves that perception to be untrue. It’s the least expensive Deluxe version I reviewed for the 2013 tax year (TurboTax Deluxe and H&R Block Deluxe are the other two), and it wins the Editors’ Choice for paid services this year for many reasons.

TaxACT Ultimate Bundle lets you complete every IRS federal form and schedule that can be e-filed. It prepares and e-files returns for every state that has an income tax. Its site-based help system is well-organized, context-sensitive, and offers multiple types of assistance. The company makes tax experts available for unlimited phone support for $7.99, which covers the whole tax season. Like its competitors, it does not force you to work directly with IRS forms and schedules. Rather, it gets your tax information through a step-by-step interview process. When you’re done, it reviews your return for errors and omissions and lets you correct them.

You cannot get that combination of supported IRS documents, preparation tools, and guidance from TurboTax Deluxe or H&R Block Deluxe, and TaxACT Ultimate Bundle costs less than one-third the price: $17.99. Note that as with all the services I reviewed, there’s a free edition, TaxACT Free Federal, which also won the free tax-prep services Editors’ Choice.

Simple Steps
If you have a very complex return and/or you think you may need a lot of guidance as you prepare your 2013 tax return, you may want to consider consulting a professional preparer. I wouldn’t recommend TaxACT Ultimate Bundle for complicated investment scenarios, for example. Neither would I send you to TurboTax or H&R Block Deluxe. You can always start your return at the TaxACT site and switch to a live preparer if you’re at all uncertain of your knowledge (all three of these sites let you work on your return without charging you; payment is required only when you’re ready to file).

All three competitors, though, make the actual mechanics of preparing your tax return quite simple. Using them is like working with a giant wizard with many dozens of screens. Each page contains either information about the current topic or questions or both. Their developers have taken the IRS 1040 and its related forms and schedules, breaking them down into a lengthy series of questions. You’ll respond by entering data in fields or choosing selections from a list or just clicking on the Yes or No buttons.

As you feed information to the site, it works in the background, doing all necessary calculations and depositing your answers in the correct fields on IRS forms and schedules. When you’ve completed the topics relevant to your financial situation, they comb through your entire return, looking for missing or questionable information. TaxACT and TurboTax report on these problems well. They devote a screen to each, explain the problem and provide a field for your change. H&R Block does not complete this task as elegantly.

Building Your Tax File
Here’s how it works in TaxACT. A giant window in the middle of the screen consists of three primary elements. A tabbed toolbar divides the application’s tax-preparation sections into five areas: Basic Info, Life Events, Federal Q&A, State Q&A, and Review. You can click on these tabs at any time that you want to move into another part of the 1040 content, but the easiest way to progress is to simply follow the prompts. All that’s usually necessary is to click on the Continue button to display the next sequential screen. (There’s a Back button, too, that returns you to the previous page.)

If you don’t have the information you need on a given page, you can click the arrow next to the Bookmarks link in the upper right corner and write yourself a reminder note so you remember to come back later and fill it in (the review would catch anything standing in the way of filing, too). Only H&R Block insists that you complete all required screens before going on to the next. And the more you can do this, the better. You know how tangled up you can get working with paper forms. TaxACT helps keep you organized and follows the basic trajectory of the 1040 more or less, but you’ll feel more confident about your return if you follow the prescribed order as much as is possible.

There are other ways to navigate through the site if you need to go out of sequence either forward or back. The first page of the Federal Q&A displays a comprehensive, collapsible list of the topics covered throughout the site. You can click on any of these to go directly to the related page(s). Experienced users may actually use this list as their home base, selecting the topics they know they need to cover. You also have the option of letting TaxACT’s step-by-step guidance walk you through your whole return. All sites operate this way, and it greatly simplifies the tax-prep experience.

TaxACT also has a link in the upper right corner that says Jump To Forms & Topics. This introduces two additional ways to navigate the site. You can get to your destination by finding the desired official IRS form or schedule in the exhaustive list supplied; by the name of a document that you received (W-2, 1099, etc.) or by topic (Business Income, Retirement Plan Income, IRA Contributions, etc.). These represent more navigational options than the competition offers.

Versatile Help
The attribute that changes the most from year to year in all of these tax-preparation websites is their guidance tools. These are not expert systems, and they may not offer enough explanation for you. But if you’re going to find an answer in any of them, you’ll find it in TaxACT Ultimate Bundle.

Many Q&A pages flesh out the questions a bit and display context-sensitive questions and links to answers in the right vertical pane. There are also links to related TaxTutor Guidance, a massive compendium of instructional content written by tax experts in understandable language. You can also access the actual IRS instructions. In that same pane are tabs that provide links to every form and schedule you’ve worked on, an online repository for documents that you want to upload and keep, and a smattering of tools, like calculators and record-keeping screens (some of these are only available after you’ve paid for the product).

TaxACT uses a convention that its two competitors here do not offer. The Answer Center, which you can reach by either entering a word or phrase in the box provided on the main screen or by clicking Browse Answer Center, is your help clearinghouse. Multiple types of help are provided here. There are Best Answers (context-sensitive FAQs and TaxTutor Guidance); direct links to related pages in the Q&A; a glossary of terms; form instructions and a browsable menu of text and video help topics.

You won’t find any community discussions either within the walls of the application itself or elsewhere on TaxACT’s website. I think that’s smart. Certainly, there’s value in letting users see what others are asking (as long as the answers come from tax professionals). It probably cuts down on individual support chats and phone calls. But some users may not carefully distinguish between what’s coming from the company’s representatives and what some well-meaning individual decided to share. H&R Block only allows this kind of interaction outside of the password-protected tax-preparation areas of the site. TurboTax allows it within.

Neither H&R Block nor TurboTax can match the variety, accessibility or affordability of the guidance tools offered by TaxACT.

Mobile Apps
All three websites reviewed here offer a fairly comparable selection of mobile apps. TaxACT Tablet App, in fact, won our Editors’ Choice last year in the tablet-based tax-preparation category (Federal return free; state, $14.99).

The company also offers TaxACT Express for iOS and Android smartphones, which is similar to what the competition offers. It’s designed for very simple returns (W-2s, dependents, interest and dividend income, unemployment compensation and a few simple credits). Your federal return is free, and state is $7.99. TaxACT Central is the company’s free housekeeping app, offering a document organizer, help center, tax calendar and information on the status of your return and any refund that might be forthcoming.

TaxACT has been a strong contender for our Editors’ Choice for the last few years. This year TaxACT takes the tax-preparation crown, thanks to its comprehensive support for IRS forms and schedules; state-of-the art user interface and preparation framework; multiple navigation options; and a variety of context-sensitive guidance tools that surpasses the competition’s by quite a bit. That it does all of this at a cost significantly lower than TurboTax and H&R Block is icing on the cake.

TaxACT Ultimate Bundle wins our Editors' Choice for Deluxe tax-preparation websites this year because it offers the best help system, an effective user interface and navigation tools, and the lowest cost of its competitors.
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