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Sunday, February 5th, 2006

TaxAct User Review and Ethereal Report

Earlier I tauted the TaxAct Standard version as free (as in beer) software for computing and e-filing federal tax returns, even if you didn’t qualify for free filing with IRS e-file partners. I discussed my security concerns, the software EULA and website privacy policy, and my assessment was that the software was free because it was nagware, and it seemed to be secure and without spyware.

Now that I’ve completed and electronically filed my taxes, I can say that the TaxAct software was relatively easy to use. There are definitely some features missing that might be in the pay version, but none that I absolutely had to have. I was able to complete everything over several sessions – I was even able to transfer the incomplete datafile from one computer to another – and I not only have a printed copy of my return, I can reopen the software for review and editing. I guess that would be helpful if the IRS found an error in your return or if you had to file an amended return.

The nagware part was omnipresent but not a hindrance. I just clicked past all the prompts that offered the benefits of the pay version, and learned to ignore the tax adviser links; all tax help (not software help) required the pay version, but you were always able to summon the IRS instructions for form lines. The navigation was a little tricky. The whole thing is structured in a question and answer format, so when I wanted to look up what I had entered for a particular line on a particular form, I sometimes had to hunt around. The sitemap function was pretty helpful for this, but I often had to browse through several question pages to get to a point where I was able to view the form. There is no free state version – that’s their last hook to get you to cough up some money – but I used CalFile to file my California state tax return for free.

There are built in review functions that are supposed to spot potential errors – I wasn’t able to evaluate this, because I didn’t go through the review until my forms where complete, and from what I could tell, I didn’t make any mistakes. There aren’t any audit warnings, unless I was really good – which I somehow doubt. Maybe only the industry versions have those – I once watched the H & R Block software in action and saw a lot of tips and warnings, but that software was for use in their instant-expert training method, and was probably meant to make sure a low-level peon knew to call over a supervisor when he was supposed to.

I was running Ethereal when I clicked the submit button. All traffic went through one ip address through a secure protocol, which resolved to by reverse dns, so I believe the site privacy policy applied to your actual tax forms as well, not just registration information. Still, I suspect that the filing information is more vulnerable to subpoena and strong-arm tactics by law enforcement under the Patriot Act than if it had been sent directly to the IRS, but the IRS doesn’t allow this.

To summarize – this software satisfied all my requirements – free to use, free to file, usable, and secure. I highly recommend it.

Posted by Greg in Society, Software

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