500 USD can get you a pretty decent A/E (Acoustic Electric). I noticed that you said "Taylor". If you want to get a Taylor A/E you're gonna have to bump your budget up about another 500 dollars. haha. Taylor ARE excellent guitars. But they're not mass produced in the ways that most other guitars are. They're made very carefully by skilled luthiers right here in the US.... which means they're more expensive. They have a few lower priced instruments but they're mainly just acoustic instruments... Alvarez is a great brand as well!! I'm not super familiar with their products but I know they make great guitars. I've played a few... But once again... their A/E guitars might be a bit out of your price range...
Some other brands to have a look at are Takamine... I had an EG544 for about a year and a half before I sold it to pay off some bills... I bought it for around 600... but that was after I bought a hardshell case for it as well. It's got a very good preamp, an almost Taylor-like tone... It's got Koa backs and sides with a spruce top that really make it resonate... You can pick one up at a guitar center for about 450 or so. My advice to you, since you seem a little uneasy and uneducated about exactly what you're looking for, is to go in to as many guitar shops as you can and pick up every single acoustic guitar you can get your hands on. You need to familiarize yourself, atleast a little bit, with the instruments so you know what feels good and what doesn, and what certain tone woods sound like. Not all guitars are made of the same woods...
Acoustic Electric guitars most commonly use what's know as a piezo pickup. Instead of the big magnets with wire wrapped around it the piezo is pretty simply just a piece of wire in itself that lays underneath the bridge of the guitar... As the bridge vibrates the wire picks up the signal and sends it to the preamp... Which is normally located on the top side... The side facing up as you're holding the guitar to play it... The preamp is what takes these vibrations and turns them into sound. Different preamps have different tones and sound differently... Make sure you ask about the specific preamp in the guitar that you're going to buy to see if the salesman has any input whether or not it sounds good... Chances are he won't tell you even if it did sound horrible but it's worth a shot to ask... Some acoustic/electrics like the Epiphone EJ-40 (John Lennon signature guitar) have the same exact style of pickup as your electric... It just depends on the guitar... Taylors use a series of microphones implanted inside the body of the guitar to get a very very very good representation of the guitars tone... it's called the Expression System... that's one thing that makes their guitars so expensive...
Check out A/E guitars by Fender, Ephiphone, Dean, Takamine, Yamaha, and Ibanez... They're about your best bet for that price range.
Like I said though... Play every acoustic electric that you possibly can so you get a feel for them. It's not good to buy stuff that you haven't tried... especially if you're not sure about the specifics like the preamp and the tone woods.
Good Luck.
