Comparing TaxAct vs TurboTax: Big Difference in Refund Numbers - Which is More Accurate?
Title: Comparing TaxAct vs TurboTax: Big Difference in Refund Numbers - Which is More Accurate? 1 I've started doing some early tax prep for 2025 and I'm totally confused about the huge difference in state refund amounts I'm seeing. I plugged in both my husband's W-2 and mine into TaxAct and TurboTax, and TaxAct is showing a much higher state refund than TurboTax. Like, we're talking a few hundred dollars difference! The weird thing is I haven't even entered our property details into TaxAct yet, but the refund number is already super high compared to TurboTax. I'm not sure which one to trust at this point. Has anyone else experienced this big difference between TaxAct and TurboTax? Which software is usually more accurate in calculating refund amounts? I don't want to get my hopes up for a bigger refund only to find out it's wrong!
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Zachary Hughes
7 This is actually pretty common! Tax software programs can show different refund amounts for several reasons: First, check if you entered identical information in both systems. Even small differences in how income is categorized or deductions are entered can cause significant variations in the calculated refund. TaxAct and TurboTax might be making different assumptions about deductions you haven't explicitly entered yet. For example, one might default to standard deduction while the other is anticipating itemized deductions based on your property. The state tax calculations are particularly sensitive to these differences because state tax systems often have their own quirks that each software handles differently. Without your property details in TaxAct, it might not be accounting for property tax payments that would affect your state refund. I'd recommend completing both returns fully with identical information before making your final decision. Once you've entered everything completely, the refund amounts should be much closer. If they're still significantly different, go through line by line to identify where the calculations diverge.
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Zachary Hughes
•15 Thanks for the explanation! What about the accuracy history of these two programs? I've heard TurboTax is more accurate but TaxAct is cheaper. Is there a reliability difference between them that might explain the variation?
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Zachary Hughes
•7 Both TaxAct and TurboTax have solid accuracy records when all information is entered correctly. The difference isn't usually about one being more "accurate" than the other in the calculation itself. TurboTax tends to have more intuitive prompts that might help users discover deductions they didn't know they qualified for, which could explain why some people feel it's "more accurate" - it might just be better at guiding you through potential tax benefits. TaxAct is indeed typically less expensive but covers all the same tax scenarios when used properly.
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Zachary Hughes
12 I went through the exact same thing last year! After going back and forth between different tax programs and getting totally different numbers, I discovered taxr.ai at https://taxr.ai and it was a game-changer. It actually analyzes your inputs across different tax platforms and highlights exactly where the discrepancies are coming from. In my case, it turned out TaxAct was calculating my state education credits differently than TurboTax, and it wasn't obvious from just looking at the summary screens. The tool let me upload my draft returns from both software and gave me a side-by-side comparison showing exactly where the differences were happening.
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Zachary Hughes
•3 Does it work with other tax programs too? I've been trying FreeTaxUSA and I'm getting yet another different number for my refund.
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Zachary Hughes
•18 I'm always skeptical of these comparison tools. How does it handle security? I'm not comfortable uploading my tax info to some random website.
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Zachary Hughes
•12 Yes, it absolutely works with other tax programs including FreeTaxUSA! The comparison tool is designed to work with all major tax preparation software, so you can compare across multiple platforms if you're trying several different options. Regarding security, I completely understand your concern. They use bank-level encryption and don't store your complete tax documents on their servers after analysis. The system extracts just the calculation data needed for comparison without keeping your personal information. They also have a detailed security policy on their site that explains their SOC 2 compliance and data handling procedures.
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Zachary Hughes
18 Just wanted to update everyone - I tried the taxr.ai tool mentioned above and it actually solved my problem! It showed me that TurboTax was accounting for my student loan interest deduction correctly while TaxAct was double-counting some of my state withholding which explained the artificially high refund. I would've gone with the wrong software and potentially had issues during filing if I hadn't been able to see the exact line-by-line comparison. The peace of mind was definitely worth it, and I ended up going with TurboTax since it was handling my situation more accurately.
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Zachary Hughes
9 Hey there! After dealing with similar issues comparing tax software, I found that calling the IRS directly gave me the answers I needed, but it took FOREVER to get through to someone. I recently discovered this service called Claimyr (https://claimyr.com) that gets you through to an IRS agent in minutes instead of waiting on hold for hours. There's a cool demo of how it works here: https://youtu.be/_kiP6q8DX5c I used it to ask about how different tax software handles state deductions and why there might be discrepancies. The IRS agent I spoke with explained that the software calculations should be identical if the inputs are truly the same, and gave me some specific things to check. Having a real person from the IRS walk me through the differences was way more helpful than just trying to figure it out myself!
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Zachary Hughes
•22 Wait, how does this actually work? The IRS phone system is deliberately designed to be a nightmare. How can any service possibly get you through faster?
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Zachary Hughes
•18 This sounds like BS honestly. I've tried everything to get through to the IRS and nothing works. You're telling me some random service can magically skip the queue?
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Zachary Hughes
•9 The technology actually monitors the IRS phone system and calls repeatedly using their algorithm until it gets through the queue, then it calls you and connects you directly to the agent. It's not skipping the line - it's just doing the waiting for you. As for whether it actually works, I was super skeptical too. I had spent 3+ hours on hold multiple times and never got through. With Claimyr, I got connected to an IRS agent in about 20 minutes while I just went about my day until my phone rang. The agent was able to walk me through why different tax software might calculate state refunds differently based on how they interpret certain deductions.
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Zachary Hughes
18 Alright, I need to eat some crow here. After my skeptical comment above, I tried Claimyr out of desperation because I couldn't figure out why my software was showing such different numbers. IT ACTUALLY WORKS. Got connected to an IRS agent in about 15 minutes who explained that the state tax calculation differences often come from how each software handles state-specific credits and deductions. She walked me through several specific line items to check, and sure enough, I found that one software was incorrectly applying a state education credit that I wasn't eligible for, which was inflating my refund number. Definitely worth it just to get an authoritative answer rather than guessing which software was right!
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Zachary Hughes
5 Have you checked if you entered your property tax information correctly in TurboTax but not in TaxAct? That would explain why TaxAct is showing a higher refund - it's not accounting for property tax payments that might reduce your refund. Also, did you double-check if both programs are properly accounting for state tax withholding from your W-2s? Sometimes the way you enter state withholding can cause big differences in refund calculations.
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Zachary Hughes
•1 Thanks for the suggestions! I checked and you're right - I had entered our property tax information in TurboTax but completely missed it in TaxAct. When I added it to TaxAct, the refund amounts got much closer. But there's still about a $120 difference between them. Could this be because of how they handle state tax credits differently?
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Zachary Hughes
•5 That $120 difference could definitely be due to how each program calculates state tax credits. Each state has different credits and deductions, and sometimes the tax software interprets eligibility requirements differently. Look for any state-specific credits that might be applied in one program but not the other. Common ones include education credits, child and dependent care credits, and energy efficiency credits. One program might be automatically applying a credit that the other one isn't. Go through the state tax section line by line in both programs and you'll likely find where that remaining $120 difference is coming from.
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Zachary Hughes
13 I'm a tax preparer and I see this ALL THE TIME. Usually it comes down to these factors: 1) Different assumptions about standard vs itemized deductions 2) Property tax entries not matching 3) State-specific credits being calculated differently 4) Different handling of retirement contributions 5) Health insurance premium tax credits
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Zachary Hughes
•17 Do you think it's worth paying for the more expensive software if it gives you a smaller refund? Logically the more accurate one should be better, but it feels wrong to pay more for less money back!
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