How to File Federal and State Taxes Online with TaxAct at a Lower Cost

TaxAct is a tax preparation service that has been around for more than two decades. It covers the same range of tax situations as TurboTax and H&R Block but typically charges less for both federal and state returns. If you are comfortable following step-by-step instructions on a screen and do not need extensive hand-holding, TaxAct is a solid way to file accurately without overpaying for software.

The service works through a web browser on any computer or through a mobile app for iPhone and Android. You answer questions section by section — personal details, income, deductions, and credits — and TaxAct builds your return in the background. When you are done, it shows you a summary and runs an error check before you file.

TaxAct's free federal filing option covers basic returns, but most people will find they need at least the "Deluxe" tier to handle common situations like mortgage interest deductions, investment income, or retirement account contributions. Even the paid tiers, however, are priced lower than comparable offerings from competitors.

One feature TaxAct does well is a W-2 import tool that connects directly to thousands of employers. Instead of typing in your W-2 numbers, you can search for your employer's name, log in to their payroll portal, and import the data automatically. This is faster and reduces data-entry errors.

TaxAct also offers "Xpert Assist" — access to a real tax professional via phone or screen share — for an additional fee. This is useful if you hit a question you do not understand or want a second opinion before submitting.