A class action settlement involving the popular online tax preparation service, TaxAct, is underway. This legal settlement involves users of TaxAct's online federal tax filing service between two and six years ago.
The total settlement amount is about $14.95 million, and eligible customers may be entitled to compensation.
But the deadline for claims is fast approaching. So, here’s what else you should know.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
TaxAct lawsuit?
The lawsuit at the center of this settlement alleges that TaxAct shared users' personal and financial information with third-party entities, specifically Google and Meta (formerly Facebook), without obtaining proper consent.
Tracking pixels were allegedly used to collect and transmit user data for advertising. That included names, email addresses, income data, and other sensitive data entered during the tax filing process
TaxAct has agreed to settle but has not admitted wrongdoing.
TaxAct class settlement: How much is it?
The settlement applies to those who used TaxAct‘s online do-it-yourself 1040 tax filing product between Jan. 1, 2018, and Dec. 31, 2022.
- The official settlement website indicates the estimated individual payout for eligible claimants in the TaxAct settlement is approximately $18.65.
- California residents and joint filers may qualify for slightly higher amounts.
- Additionally, claimants planning to use TaxAct for their 2024 tax returns will receive complimentary expert assistance as part of the settlement.
You must meet the eligibility criteria and submit a claim form to participate. Eligibility is generally extended to those who used TaxAct's online service and had a U.S. postal code during the time covered by the settlement.
Claim forms can be submitted online through the official settlement website. Proof of purchase is not required.
Key dates:
- The deadline for submitting claims is Sept. 11, 2024.
- Those wishing to opt out of the settlement must do so by Sept. 11, 2024.
- Objections to the settlement must be filed by Aug. 12, 2024.
If you have questions about the settlement, contact the Settlement Administrator, Kroll Settlement Administration.
Email: info@TaxActClassSettlement.com and Toll-Free: (833) 425-9910. You can also contact the administrator by mail at the following address.
Smith-Washington v. TaxAct, Inc., c/o Kroll Settlement Administration LLC
PO Box 225391
New York, NY 10150-5391
TaxAct legal settlement: Bottom line
The settlement is part of a broader trend of privacy and fair advertising concerns in the tax prep industry. As Kiplinger reported, The Federal Trade Commission (FTC) recently filed complaints against Intuit TurboTax and H&R Block, accusing the companies of misleading consumers with advertising for their digital tax filing products.
While the individual payouts for the TaxAct settlement will likely be small, the situation is a reminder to remain vigilant about how companies use and share data we provide for online financial services.
Related
-
GOP Eyes Taxing Municipal Bond Interest: What You Need to KnowTax Reform If the tax status of muni bonds changes, the impact on regular investors and state and local governments could be significant.
-
Aging Well: 10 Things You Should Know for a Healthy RetirementIf you're committed to aging well, these tips can save on healthcare costs and make your later years more fulfilling.
-
IRS Layoffs Spark Delays, Doubt This Tax SeasonTax Season Tax experts say Trump’s downsizing of the IRS is already causing problems.
-
States with the Highest Income Tax Rates for RetireesState Tax You may reconsider living and retiring in one of these states due to high taxes.
-
AI Tax Scams Target Middle and Older Adults: What to KnowScams Whether you’re a retiree or Gen Z, scammers can gouge big financial losses with the help of artificial intelligence.
-
Tax-Deductible Home Improvements for Retirement in 2025Retirement Taxes Your aging-in-place plan could benefit from the medical expense tax deduction. But watch out for capital gains and property taxes.
-
Don’t Make These Five Mistakes on Your Tax ReturnTax Filing The IRS warns taxpayers to watch out for these common errors as they prepare to file.
-
You Don’t Want to Retire in Portugal: Here Are Three Tax Reasons WhyRetirement Taxes With the NHR benefit retiring and pension taxes increasing, you might rethink your retirement plans in Portugal.
-
Why Abolishing Florida Property Taxes is ProblematicProperty Taxes A bold proposal that aims to eliminate property taxes in the Sunshine State has roused concerns from economists, and rightly so.
-
First-Time Filing Taxes? Key Tax Tips to Know for 2025Tax Filing Preparing your IRS taxes for the first time may seem daunting, but here are some return preparation and filing tips to start.
