Users opting for the online version of TaxACT can prepare a federal return and print it out for free. Adding a state return costs $12.95 and electronic filing either a federal or state returns costs $7.95. If you operate a Macintosh or Linux-based PC, preparing a tax return online is your only option with TaxACT.
Windows users will find that the best deal 2nd Story Software has to offer is the TaxACT 2002 Ultimate Bundle for $19.95. The bundle allows users to prepare multiple federal and state returns (for a single state) and includes one free federal e-filing. As you may recall, similar services from TaxCut or TurboTax would run about $55 ($40 after rebate).
The ultimate bundle features TaxACT Deluxe, which has all the necessary forms, schedules and worksheets needed to complete a federal income tax return. Granted you won't get superfluities such as embedded video explanations, 401(k) maximizing suggestions, or detailed suggestions on how to take advantage of tax law changes. But you will get an effective, uncomplicated, and in some cases a nearly free way to file a tax return (after postage).
Oftentimes, small business can end up preparing pretty complex tax returns. To be fair, none of these programs claim to be designed exclusively for small businesses. But TaxACT Deluxe can handle Schedule C preparation, which is essential to prepare a return for a sole proprietorship, just make certain you understand the implications of reporting a profit or a loss. Also, if you opt for a low-cost tax preparation option like TaxACT, make sure you have a clear-cut plan for how you want to deal with any home office deductions and associated depreciation schedules.
Business limitations aside TaxACT is a very friendly, easy-to-navigate program written in simple English and presented on an uncluttered screen. Tax forms can be viewed at the bottom of the screen as you answer questions that are posted at the top of the screen. One click maximizes the view of these forms, so users can readily check their progress.
TaxACT 2002 employs an interview-style technique common to most tax-preparation software packages. It poses questions and users supply the answers. The interview questions are easy to understand. If you require assistance on a particularly perplexing tax problem, be prepared to have someone translate the intricate language of tax laws.
Like other tax software, TaxACT does the math for you, checks its calculations, and provides a secure electronic filing service to deliver the forms to the Internal Revenue Service. Through a series of color-coded Alerts, the program helps you steer clear of problems it inspects your return and alerts you to errors, omissions, and potentially valuable tax saving opportunities. Red Alerts are usually data omissions that require your immediate attention, Yellow Alerts are items that will need to be addressed before you file your return, and Green Alerts provide tax saving advice regarding your return. TaxACT even uses and alert to remind you to regularly save data as you prepare a return.
When it comes to tax advice from an expert, TaxACT has incorporated J.K. Lasser's Your Income Tax Guide! into its Deluxe Edition. And if that isn't enough advice, TaxACT's Life Event planning tool assists users in determining how to handle major events such as getting married, having children, selling your home, or winning the lottery.
Other key features include Tax Calculator, which allows you to perform what-if scenarios with your tax return without adjusting your actual numbers. This feature summarizes your tax return and gives you the ability to enter adjustments, positive or negative, to see the impact on your taxes.
Another interesting feature is TaxACT's National Averages Comparison, which allows you to view potential "hotspots" in your return that could catch the eye of an IRS auditor. By comparing your return with national averages, you know where you stand with the rest of the taxpaying public.
TaxACT comes with a satisfaction guarantee no questions asked. 2nd Story Software promises that if you are not completely satisfied with the product, simply return it for a full refund (excluding shipping) within 30 days of receipt. 2nd Story Software also guarantees TaxACT's accuracy. If you are assessed a penalty due to a calculation error made by TaxACT, the company will pay the penalty. Of course, you must notify 2nd Story Software in writing within 60 days of the IRS imposing a penalty, and prove the program was at fault in order to collect on this premium.
Forms, Not Functions
For all its features and forms TaxACT is missing one key function. There is no import option available to transfer financial information from other programs such as Quicken or QuickBooks. This means uses may lose a little time re-keying relevant financial data and risk mistyping an item or two that could affect a return. But if TaxACT's alerts are working up to par, errors or omissions should be caught straight away.
With any discounted service you should usually expect to receive a little less service, that is. TaxACT technical support is only available by e-mail or phone. It helps that the program is user friendly and concise, but don't expect an immediate resolution to your problem if you have to e-mail technical support. The quickest course for support is to reload first and ask questions later.
TaxACT's basic system requirements are a little slim on practicality. TaxACT Deluxe can run on Windows 95, 98, Me, NT, 2000, and XP. A Pentium processor and 16 MB of RAM would make processing a return doggedly slow, but these are TaxACT's bare minimums for processing power and memory. Better make that a Pentium III chipset and 32MB of RAM if you want to have a return ready for April 15. Oddly enough, TaxACT advises that a mouse is recommended and a printer is highly recommended. But let's face it you need a mouse and a printer unless you can bend spoons with your mind or telepathically send your return to the IRS.
You can download a version of TaxACT 2002 online if you have a speedy broadband connection. If you use a 56 kbps connection or slower, it might be quicker to order the CD version by mail, just be prepared to pay shipping and handling fees.
The Bottom Line
TaxACT 2002 offers a low-cost, no-frills solution for filing taxes electronically. What it lacks in video files and live chat support is made up for by its inexpensive price and user-friendly interface.