Many of my small business tax preparer friends love to talk about their favorite “best of” tax software tools…or the very latest, greatest online tax platforms. My reply? But you don’t even use it! I know. I realize that my answer may be contentious, but it’s for reasons outlined in this post.
Below, I’ll go into several important factors you should consider in choosing a piece of tax software.
BEST OVERALL
H&R Block
We chose H&R Block as best overall because it is a trusted name in tax preparation, and its tax software for small businesses and business owners offers an excellent user experience and covers a wide range of tax situations. It offers a straightforward user interface that makes it easy to do your taxes accurately the first time.Pros
- Online version includes self-employment and small business income on your personal tax returns
- Option to upgrade for on-demand assistance from a tax expert
- Mobile app allows you to upload tax documents and track filing status
Cons
- Business editions are priced higher than competitors
- Some functionality may not be available on mobile
H&R Block is a well-known brand in personal and business tax preparation. It was founded in 1955 and has prepared more than 800 million tax returns. If you want to do your own taxes, you can choose between online and downloadable versions of H&R Block’s tax software. For the 2019 tax year, H&R Block prepared almost 22 million tax returns and nearly 9 million people used H&R Block Online to do their taxes.
Windows desktop users get the most robust options, including corporation or partnership tax forms and employee-specific tax forms. This comes through H&R Block’s downloadable Premium & Business software, which costs $89.95 plus $39.95 per state return. If you can get by with a Schedule C, you can file with the Premium Online edition for $69.99 or Self-Employed Online for $109.99. Both require an extra $44.99 per state. If you have significant business expenses, you’ll need the Self-Employed edition, their top-tier online option.
The software program does a good job of walking you through complex tax situations. If you think you’ll need extra help, you can upgrade to Online Assist, which allows you to do your taxes on any device with unlimited, on-demand help from a tax pro. It costs $159.99 for Premium or $194.99 for Self-Employed, plus $49.99 per state.
Whether you file online or with the download version, the tax software comes with a maximum refund guarantee and 100% accuracy guarantee. All versions have an audit support guarantee. Whichever you choose, H&R Block covers most tax situations and is a top choice for many business owners, which is why it gets our best overall ranking.
BEST FOR PARTNERSHIPS AND CORPORATIONS
TaxAct
TaxAct includes an option to complete tax filings for partnership and corporations completely online and is the only place you can prepare taxes for a partnership or S corporation with either a PC or Mac online, which is why it’s our choice as best for partnerships and corporations.Pros
- Completely online federal and state taxes for partnerships, C corporations, and S corporations
- Unlimited free support from tax specialists and technical support by phone and email
- Choose between online and downloadable versions
- Discounts available for bundling personal and business taxes
Cons
- Limited options for audit support
- State forms may not be available to file electronically
- Downloadable version for Windows only
TaxAct is a large provider of online and downloadable tax software that has completed over 80 million tax returns since 2000.
Business owners who file online will pay $124.95 plus $49.95 per state. That includes sole proprietors who file with a Schedule C, partnerships that require Form 1065, corporations that file with Form 1120 or Form 1120s. However, tax-exempt organizations that file Form 990 must by the downloadable version though..
The download version (Windows only), which includes 5 federal e-files is $109.95. States cost $50 each. You can bundle personal and business for a total of $200.
The online experience isn’t quite as polished as some of the larger competitors, but it is generally intuitive and easy to follow. If you need assistance along the way, tax help and technical support are both available by phone. Customer service (without tax help) is also available by email.
TaxAct guarantees accuracy and the maximum possible refund but doesn’t include audit support. You can pay extra during your tax preparation process to add audit support with their third-party partner Protection Plus. Overall, TaxAct is an excellent choice for those who can handle things primarily on their own, and perhaps the only choice for PC or Mac users who want to do partnership or corporation taxes on their own, which is why it’s our top tax software choice for partnerships and corporations.
TaxAct Business is a more recent addition to the business tax software industry, as they opened in 1998. They’re known as a budget-friendly option, so let’s see if they live up to their reputation when compared to TurboTax and H&R Block.
- TaxAct Business is certainly less expensive than either TurboTax Business or H&R Block Premium & Business. Depending on your business entity type, you’ll pay either $39 or $60 for your federal return, and $37 for state filings.
- With TaxAct Business, you can only file taxes for one business per purchase. If you want to prepare returns for multiple companies, you’ll need to buy multiple copies of this software.
- Like H&R Block Premium & Business, TaxAct Business does let you transfer accounting info via CSV files, but there’s no automatic import like there is with TurboTax Business.
- TaxAct Business does not offer audit support, beyond dedicating a page of their website’s FAQ section to audit info.
For the most part, customer reviews are not a strength for TaxAct Business as their feedback is mixed in nature. However, they do offer a 100% satisfaction guarantee that helps restore any confidence you might have lost with their so-so customer reviews.
All told, TaxAct Business is a good option for entrepreneurs looking to save some cash while still getting professional tax assistance.
TurboTax Business
TurboTax Business has been around since the mid-1980s, and they have significant brand power as a leading business tax software. Let’s see why they’re such a popular option, and also our top pick.
- TurboTax Business does not have the lowest pricing out there, as their federal returns cost $159.99, and state return filings are available at the rate of $49.99.
- Your one-time purchase of TurboTax Business allows you to prepare returns for multiple businesses. Even if those businesses are different entity types, TurboTax has you covered. Many competitors make you purchase separate products for each return.
- TurboTax Business is an Intuit product, which is the same company that makes QuickBooks. Because of this, it’s incredibly easy to transfer your accounting data directly into your tax return. With other business tax software, you’ll have to transfer data via CSV files, which requires time and effort to ensure everything is imported correctly.
- This product comes with basic audit support, and they’ll help you decide what you need to do if you are audited. For an extra fee of about $45, you can add their Audit Defense feature that provides in-person representation.
Finally, TurboTax Business gets excellent customer reviews that are the best we’ve seen in the industry. We’re big fans of everything TurboTax has to offer for entrepreneurs, except for the price tag. The other options in this guide are both cheaper, so let’s find out if it’s worth it to you to sacrifice some features to save money.
BEST FOR SELF-EMPLOYED
TaxSlayer
We rank TaxSlayer as best for self-employed because of its low pricing and a highly rated online experience that works well for self-employed tax filers who earn via a 1099 and need to complete a Schedule C.Pros
- Low pricing for federal tax return compared to larger competitors
- Self-employed edition includes access to a tax professional
- Chat, email, and phone support available
- All federal filings are free for active-duty military families
Cons
- No download version available
- No support for forms 1065, 1120, or 1120S for partnerships and corporations
TaxSlayer traces its roots in tax preparation to 1965. It started offering tax software to professional tax preparers in 1991 and launched its consumer-facing do-it-yourself tax software business in 1998. With TaxSlayer, you can do your taxes online or with the TaxSlayer mobile app.
The Self-Employed edition costs $54.95 plus $39.95 per state. This version includes tax preparation for a 1040 Schedule C for those who operate as sole proprietors as well as LLCs. If you have a side hustle and get a 1099 tax form, for example, TaxSlayer Self-Employed would handle your needs. Active-duty military can file all federal tax forms for free and just pay $39.95 per state.
The Self-Employed edition includes access to a tax professional for help with all of your individual tax questions while completing your taxes. It also includes phone, live chat, and email support as well as technical support. Both the Premium and Self-Employed editions include Audit Assistance for up to 3 years after your return is accepted.
TaxSlayer includes a 100% accuracy guarantee and a guaranteed maximum refund. While it doesn’t work for certain businesses that are required to complete more complex tax returns, it does a great job of handling the needs of many self-employed individuals, making it our top choice for those needing a Schedule C.
Conclusion
If you are a tax preparer who handles the taxes of many small businesses, you must be aware of the regulatory requirements. The IRS requires all 1099-MISC forms to be submitted electronically through their ShareFile system by January 31 each year. You can opt to do it yourself or call in for our help using our best tax software for small business owners.