Filing taxes is one of those necessary evils that we all are subject to each year.
There is really no way around this problem, and it is essential to find a service that works for your budget and your accounting needs.
One of those services is TaxAct.
Although TaxAct may be priced a little lower than some other options on the market, it is still expensive.
For those who owe money on their tax returns or are dependent on the refund money that they have coming to them, TaxAct can feel like a waste of money.
There are several reasons TaxAct is so expensive.
Sometimes understanding these reasons and feeling like you have a handle on why you are getting charged what you are can help you feel as though your money is going to the right place.
Here are ten reasons TaxAct is so expensive.
Why Is TaxAct So Expensive (Top 10 Reasons)
1. Different Plan Offerings
The TaxAct accounting service is expensive because it will appeal to a lot of different people.
There are plan offerings that will fit each type of person who is looking to file their taxes.
Sometimes the fact that there are custom options is going to increase the pricing of the plans and what they will offer.
The plans that people have to choose from are Free, Deluxe, Premier, and Self Employed.
Although TaxAct has a free plan, you will quickly learn that this is very limited and won’t work for the majority of people.
In addition, even though the plan is free, there are additional charges for other forms that may need to be filed.
The Self-Employed plan is the most expensive of the TaxAct plans.
This is mainly because the Self-Employed people have a lot of additional fees that they must pay for notable credits and deductions that come up with their business.
Although the Self-Employed plan will help filers decide if they are eligible for certain discounts, there are still additional fees on top of totals that you will pay.
Many of these returns end up costing closer to $200.
The basic idea here is that, when you give people different options customized to their needs, the pricing will go up.
The more that TaxAct starts to feel like a customized service that you could get with an accountant, the more the fees will increase.
The trouble for most Americans is that there are very few other choices on the market.
2. Easy To Use System
The TaxAct system is one of the simpler tax prep services on the market.
With this system, anybody will feel comfortable filing their tax return.
You will not need to have spent several years taking college accounting classes to be able to work with TaxAct.
Instead, all you need is your information and a bit of time to spend on the computer or app.
The system will prompt you for all of the information that you need to put in.
The language used is basic, and you won’t feel confused by any financial terminology.
It takes a large investment, plenty of customer studies, and qualified professionals to be able to set up this system and test it and ensure that it is superior.
The fact that TaxAct has fewer features than other tax prep services also makes it much easier to use.
For most people, the extra features are not necessary, and they will cause more confusion.
If you are a person who is filing a very basic return, TaxAct makes the process incredibly simple.
With the easy-to-use system, you can sometimes be done with your tax return in a matter of minutes.
Certainly, this type of speed and ease of use allows TaxAct to charge a bit more for what they offer.
In the end, the fee is going to be justified by most of those who use it.
The part that gets difficult for many is when the fee continues to increase year after year.
When you watch those numbers go up, it starts to become difficult to think about how you will continue to afford to have your taxes prepared.
3. Expert Help
Another way that TaxAct likes to tack on the fees is through their Expert Help portal.
Essentially, if you are working with their system and run into a problem with your taxes, or you have questions about the way the tax return is filed, you can request Expert Help.
This is where you will end up dealing with an accountant who will take a look at your return to help decide if it has been done correctly.
Of course, these experts are licensed professionals who are capable of giving advice based on your unique situation.
Since they are known for their ability to work out small details and find any errors on the return, these are true professionals.
As you can imagine, paying a professional an hourly rate is going to get rather expensive.
The problem with the expert fee is that many people are not sure whether they will need the expert until they are a bit too far along in the process.
You will end up filing most of your return and then realizing you need expert help.
This is where it becomes difficult to simply back out of the return and go with a different tax professional.
Most people realize that they have come this far, so it makes sense to just pay for the expert help and get the return finished up.
The expert help will undoubtedly ensure that your tax return is done correctly, but the problem is that, in the end, it is going to cost you quite a bit of money.
4. A Service Most Can’t Do On Their Own
Would you know how to file a tax return without the help of an accountant or a tax prep service?
If you answered no, you are not alone.
The ability for ordinary people to file their own tax returns with no additional fees and the proper reporting of information is not as common as it was in the past.
Almost all people filing tax returns need some sort of help in the process.
This is what has created this extensive network of tax professionals and services, and they are all competing against each other to offer the best solution for your return.
This is one of those things that make it nearly impossible for you to do without the help of TaxAct.
It is not a great feeling to seem trapped into paying high fees for a tax return, but it is really our only choice.
For those who want to learn to properly do this on their own, it is going to take time, and it may not even result in a complete solution.
The fact that TaxAct can help you get this process completed quickly will allow them to increase the price that they charge for the service.
Even if you think that TaxAct is expensive and not worth the price you pay, it’s hard to argue the fact that they are offering a solution that most Americans need.
5. Potential To Find Discounts
One reason that TaxAct can get people to pay so much money for their service is that they will advertise the amount of money they are saving customers.
TaxAct likes to play up the fact that most people don’t know how to file a proper return and be eligible for all potential discounts.
The tax system in the United States can be very complicated, and there are times when the smallest thing can actually end up resulting in a big discount for you.
Since you only get one shot at filing your return, you may as well ensure that you are getting all of the discounts that you are entitled to.
The fact that people are afraid to miss out on money that is due to them allows TaxAct to charge quite a bit more for their service.
People feel as though they are getting a good value since TaxAct is working for them to help them find these discounts.
In the end, some people will be really lucky with this, and others will just have a standard return with no found money.
However, the fact that there is potential to increase the amount of money that you can make from your return makes people pay much more for their returns.
The fact that there could be mistakes or money left unclaimed makes it easier for tax filers to justify the spending.
TaxAct knows this, and they set their pricing accordingly.
The price needs to be fair and show customers that there is value in using their service.
For some people, this will prove to be true, and for others, there will be no difference from one tax prep service to another.
The key is to find something that you trust and stick with it over the years.
6. Paying With Return Money
A unique option that TaxAct offers its customers is the ability to pay for the fees owed with the return money.
Essentially, if you go through the entire TaxAct system and you realize that you are entitled to money back, you will have some options with that money.
You can choose to pay the fees that TaxAct is charging you with the money that you are getting back.
For those who are on a tight budget and realize that the fees from TaxAct could be complicated for them to afford, this is a great option.
However, as you probably imagined, there are fees associated with this.
TaxAct is not going to carry the costs of the fees for you while they simply wait for your return.
While your tax return is being processed and while you are waiting for the money, there will be fees and interest involved in the process.
For some, there won’t be much of a choice about whether or not this makes sense because it could end up being their only option.
For others, it is important to understand that these extra services are going to increase the overall amount that you pay for your tax return.
To avoid this, try and save up a little money before your tax return is due.
If you can ensure that you have a bit of extra savings in place, you can avoid these other fees in addition to the ones that you are already paying for your Tax Prep.
7. Internal Software On Website
When you sign up for TaxAct, you have to go through their initial process of figuring out which type of tax return you may need to follow.
Once you get through this process, you go through a lengthy list of questions to answer to ensure that everything you need will be covered as part of your tax return.
The questions help to narrow down which forms you need.
Once you get through the questionnaires, this is when you start to put information in about the tax return so that you can start to file it properly.
The fact of the matter is that in order to have this process detailed enough to help customers without TaxAct even stepping in, a lot of software and engineering needed to be done.
The TaxAct brand constantly has to update its website to ensure that it is accurate and relevant.
The United States Government also tends to change the rules and laws associated with the taxes from time to time.
Each of these changes requires an additional update to the system.
In the end, it is very difficult to develop and then maintain this type of computer system to help millions of people file their tax returns.
Since TaxAct was able to develop this, and you need a solution to file your taxes, the overall pricing that you will pay is going to be quite a bit higher.
The pricing is helping to keep the developers on staff, the updates current, and the system as a whole running.
Without TaxAct and their ability to make this process so simple, many people would be lost trying to find a solution to file their taxes.
If you are someone who understands the back-end development of websites, you will know that this process is expensive, and it is going to require a very significant investment.
8. Mobile App Availability
With the popularity of phones and smart devices, fewer people are buying computers.
If you are a person who works on a computer all day at work, you may find that you don’t need one in your home.
Most of the time, the phone or tablet can do just as much as the computer.
However, there are times when a computer may feel necessary for something like filing taxes.
Of course, you won’t want to do this process on a public or work computer with the risk of some of your information being released.
However, with TaxAct, you are not going to have to worry about the computer issue.
This is a service that allows you to file your tax return entirely on its mobile app.
The app makes things really easy, and you can simply move from one screen to the next and follow the prompts from TaxAct.
On the back end, they will be putting your return together so that it is accurate and submitted to the proper people.
Since the availability of a mobile app is such impressive technology and it is very convenient for the user, the pricing tends to be a bit higher.
Many people find that the mobile app availability is a reason TaxAct is so expensive, but it is also a reason to choose TaxAct.
If you are good with your phone and would love to be able to complete your return using it, then TaxAct is a smart choice.
9. Tax Return Storage
What do you do with your tax returns when they are all completed?
Most people put them in a drawer in their home and rarely look at them.
However, there are times when something could happen to these returns, or you need them for a mortgage application.
This is where you will want to make sure that you have a digital copy of returns adequately stored.
If you file your taxes with TaxAct, you won’t have to worry too much about tax return document storage.
TaxAct will hold a copy of your return for seven years.
This should be more than enough time to ensure that you have a copy for your records if a need should come up.
The fact that this comes along with the price of the return is a helpful benefit.
For most people, paying for secure digital storage of documents and pictures can get quite pricey.
You will find that services charge monthly fees, and you have to continually check that your documents are covered by the proper security.
One way to avoid this is to go with a tax return storage option like this one that comes with the price of the return.
Of course, anytime that something seems free, chances are there are some costs involved with it somewhere.
Some say the TaxAct pricing is a bit inflated because of the tax return storage technology.
Regardless of the price difference, this is an excellent benefit to have.
10. Accuracy Guarantee
We saved one of the top reasons for last on our list of why TaxAct is so expensive.
Mistakes on tax returns can be a major problem for people.
There will be corrections and potential fees and audits related to these issues.
Of course, for many people, this is not going to be an issue, but TaxAct really wanted to prove to their customers that their return filing process was indeed the best.
This is where the Accuracy Guarantee comes into play.
The TaxAct company is one of the only tax prep companies to offer this impressive service.
Essentially if there is a mistake on your return and you are subject to additional taxes with the IRS, TaxAct will pay them for you.
They set the limit on this to $100,000.
In the end, it’s impossible to say whether or not you will have an error on your return, but it is a great option to have this backup should it come into play.
For other tax prep companies, they will only pay the fees or penalties associated with an incorrect filing.
The fact that TaxAct will pay the entire fee is a major benefit.
Nothing in this world is free, and although this seems like a nice added benefit that is free and will save you money, it is not the case.
This is almost like insurance that is built into the plan.
Although you don’t see it listed as a line item when you are signing up and paying for TaxAct, you can rest assured that, one way or another, you are paying for it.
Tax prep services that offer more features and benefits are going to have a higher price tag.
As a customer, you will have to decide what matters the most to you.NEXT: What Is A Matinee Movie? (Everything To Know)