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Many people find that they can save money by preparing their own taxes. However, it can be tedious and difficult to fill out all those forms by hand — and then have to make sure you are figuring your tax liability correctly. One way you can solve that problem is to use tax preparation software ^[3]. Using your own software can help you easily enter your information, and then figure your taxes.

One of the options you have for tax software is TaxACT by 2nd Story Software. TaxACT has some of the same features that you will find with other tax prep software packages, as well as some different features.

Different Versions of TaxACT

Like most tax software, TaxACT allows you to enter information into various fields, and then it figures your tax liability and prepares the forms for you. You can use e-file with TaxACT make it very convenient. You can get different versions of the 1040 Form, as well as various Schedules.

There are three different options for TaxACT:

1. Standard: This version is free for your federal tax return, and $13.95 for each state tax return that you fill out.
2. Deluxe: This version adds tax tips as you work through the forms, as well as advice for different life changes. There are even FAFSA worksheets for those who will be applying for federal student aid. You also receive free phone support. The cost for this is $12.95 for your federal tax return, plus $13.95 for each state tax return.
3. Ultimate: You get everything above, but you get one state tax return included. So the total cost is $19.95. If you want the state tax return, and you expect that you would like some of the bonuses in the Deluxe version, this is likely to be the best value.

One of the great bonuses offered is the FAFSA help, as well as the free phone support with with the Deluxe and Ultimate versions. These are not items seen often with tax returns, especially the FAFSA help.

Downsides to TaxACT

While there are some definite perks and advantages to TaxACT, there are also some downsides. One of them is that the data entry can be somewhat cumbersome. Some of the data entry is spread out over more screens than it needs to be, while many other tax programs have the data entry for each form on a single screen, or on one screen. Additionally, the user interface and the look of TaxACT isn’t as slick as what you might see with other tax prep software.

The interface issue isn’t such a big deal, though, since TaxACT has an easy to use navigation bar. Plus, the low-cost pricing of TaxACT means that many people are willing to do without some of the frills that might come with other tax prep software packages.

Bottom Line

If you are looking for a low-cost tax prep program, TaxACT can be a good choice. You won’t be able to do your home business return, but you can take care of your more “regular” returns fairly easily, including your state tax return, and it has the bonus of being helpful to parents of college students who need to fill out the FAFSA.