Turbo Tax to TaxACT switching experience - 2014 Tax Filing



Background


We have used Turbo Tax Online for tax filing since the 2000 tax year. Our overall experience was satisfactory although we have had minor problems over the years. The first time we felt the need to try out other tax filing software was 2008 when we realized Turbo Tax pricing was increasing at a fast pace over the previous five years. We blogged specifically about the price increases and also did a comparison of the competitive products (TaxACT, H&R Block at Home - previously TaxCut, and Turbo Tax)  at the time. In the last five years, the base pricing for Turbo Tax was kept steady (if you used online promotional offers), although options could substantially increase the outlay. The changes did not materially change our tax filing expenses as we stuck with the following strategy:


  • Used the Deluxe product even-though they kept prompting us to upgrade to the Premium product saying it is the recommended one when you have stock sales.
  • Availed discounted pricing by signing in through clicking-through from the Fidelity web-site.
  • Ensured we filed before March 22nd to avoid the ~50% price increase after that date - Turbo Tax introduced this tacky back-door price increase strategy a few years ago.

 

Reasons for switching



Turbo Tax Online introduced a new concept this year whereby the Free, Deluxe, and Premium products support only specific tax forms. In other words, until last year, you really did have a choice of using one of these three options independent of how many or which forms you intended to file. The only difference between the options from a user experience perspective was that, the less expensive the product, the more manual inputs you had to do. In our case, we had stock sales to report but still used the Deluxe product for a savings of $15, even through that meant inputting the stock sales information manually - the Premium product, on the othe hand, has the ability to import the stock sales reports from your broker (TD Ameritrade, E*Trade, etc are supported).

The new concept that Turbo Tax introduced this year meant we had no choice but to buy the Premium product, as we had stock sales to report. We also did not like the 50% price increase after March 22nd as it unnecessarily forces you to do the taxes earlier, although the actual IRS dead-line is almost a month out. 



Once we made the decision to switch, it was easy to go with TaxACT online as we had tried the competitive products before: the deluxe product costs just $12.99 compared to $34.99 with Turbo Tax ($34.99 is the lowest price you would pay, assuming you avoided all their gimmicky price tricks - you could end up paying over $100, if you are not careful).

Switching Experience



The overall experience was very smooth and we did our taxes even faster than last year. Also, we like the fact that the interface is very functional while not being extravagant. Below are some observations:

  • Profile Data Import: One of the main deterrents to switching tax software is the need to manually input your information into the new software. This is no longer the case with TaxACT. In our case, it imported our details from the pdf tax file that Turbo Tax generated last year. There was one minor problem, however: after importing (took a while), while inputting some missing info, it timed out and we had to reimport after signing in again.
  • Stock Sales Import: No option to import 1099-B from E*Trade and so we had to input each of our sales individually using their interface. Only TD Ameritrade, Sharebuilder, Form8949.com, and GainsKeeper are supported in the Import interface.  The only other way to import stock sales data is CSV Import - get a CSV of trades from your broker, align columns, and use the Import interface to do it - cumbersome.
  • Other 1099 Forms: For the 1099-DIV, 1099-INT forms, it shows an online form which you have to fill in manually. The process itself was straightforward, but we did get another timeout in this step.
  • Inputting stock transactions manually: If you need to go back and edit an item, you have to go through seven screens. For example, if you need to change the description of a particular stock sale transaction, the first screen lets you edit it but there is no Done button. So, you have to click the Continue button six more times to get through the item - dreary.
  • E-Filing: Using the Direct Debit option, the process was very fast. The return got accepted in less than 2 hours.
  • Capital Gains: Short options positions - if date of selling is 2012, TaxAct doesn’t like it - it goes on to say it is possible that the date can be a previous year for short sales transactions. But, if you plan to use eFiling, IRS will accept only 2013 sales. But, our return was accepted although we had short options positions written last year that got expired - the warnings made it sound like they will not accept the return when filing electronically - confusing.
  • The new FBAR (FinCEN Form 114): TaxACT lets you fill in the forms through an interface, but overall the idea seems pointless. It is only intended for Worksheet purposes. So, you might as well use the BSA (Bank Secrecy Act) efiling  interface from the government, instead of doing it twice. Further it also confuses the issue: you cannot use the pdf generated from TaxACT to electronic file the form in the BSA interface - the TaxACT pdf has a watermark that states “DO NOT FILE”.

Firefox Browser Specific issues with TaxACT online


  • Sometimes, clicking text links will just result in blinking while clicking the associated icon will function correctly - many buttons (example “Sign out”) have this problem - annoying when you do not know what to do.
  • In many screens, one has to browse down repeatedly to choose common options such as the “Continue” button. In such cases, the first time you scroll down, it automatically scrolls backs up. So, do it again and this time you can access the button - annoying!

TaxACT specific quirks


  • Print vs PDF generation options: there is no clear distinction between these two options in the whole interface. Basically to get a pdf, you go to Print at the top of the page.
  • Functionality/Comparison: The pdf of what is filed appears basic compared to what Turbo Tax gives - ours had just 17 pages - so, no wastage of paper - overall a good thing, but I missed the Booksmarks tab. Any form can still be generated/printed using “Print Individual Tax Forms” under Print. But, some of the worksheets are just not available in the list - so, if you want to double check how a particular item was arrived at, you are out of luck - in our case, we had to manually do the Worksheet for 1040 line 44 to figure out how TaxACT arrived at the tax figure for this line.
  • Navigation: In the Review section, there is no real navigation - for each item that TaxACT tags, you have to go through all the screens - if there are many warnings, the process can be painful.
  • Filing Status Awareness: The “Mail a paper return” button is still enabled after you have already filed using Electronic Filing. Also, in the filing tab, both the buttons (electronic & mail) are still enabled even after eFiling. Further, you can click and it will progress as though you have not yet filed.
  • eFiling Status Interface: It is not obvious after signing in that you have already filed. Basically, the screens does not seem to be aware of the filing status. For example, in the ‘My TaxACT’ link, it says “If you have eFiled, then…” - it should know that you have eFiled.
  • eFiling Status Interface: During eFiling, TaxACT shows three options to check status (web, email, SMS). But, it doesn’t say that you can check the status by logging back into TaxACT. Further, the TaxACT interface is not intuitive. As soon as you login in, it should show the filing status. Instead, you have to click on eFile at the top and then click on “Check eFile Status”.
  • Redundancy: TaxACT has a redundant efstatus.taxact.com interface to check the filing status. The Help links show this as the way to check the status. But, this efstatus interface asks for SSN, Zipcode, and lastname to retrieve the status. Instead, you could just click on “Check eFile Status” as in 6 above and avoid having to input the additional information.

Summary


The switch was very worthwhile and far less painful than we had imagined! If you are in the same situation as us, consider also what is available at the Amazon.com Tax Preparation Software area. The options there are suitable in case you prefer client software as opposed to online interface.


Related Posts:

  1. Turbo Tax to TaxACT switching experience - 2014 Tax Filing
  2. 2013 Tax Filing - TurboTax Usage Experience
  3. Turbo Tax Online Price Increase Over The Years - A Comparison.
  4. Online Tax Filing – TaxAct, TaxCut, Turbo Tax – User Experience Review.


Last Updated: 03/2014.




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