Many business owners find it confusing and overwhelming to file their own taxes. This is especially true if they do not have the time to learn about small business tax planning or accounting software. And since nearly 1/3 of all small businesses run on a cash basis, this leaves small business owners wondering where to find the best small business tax planning software.
Taxes are a major pain in the neck for any entrepreneur, small business owner, or freelancer. With all of the time spent on making sales and taking care of customers, it discourages many people from going into business for themselves. And that’s a shame — because entrepreneurs make up a big part of what makes this country run! It’s encouraging to see so much effort being put into supporting the small business community. This includes the great tax planning software out there.
TurboTax
The venerable master of tax return software
TurboTax is a very popular choice for small business owners and it’s got a long track record that has helped to hone its impressive feature set. There’s a downloadable dedicated Business package too, which helps you work out the most advantageous tax-saving strategy for your concern.
It also lets you create unlimited W-2, 1099-MISC, 1099-INT and 1099-DIV forms, prepare tax returns for multiple businesses as well as allowing you to import from QuickBooks. There’s also lots of support available, with CPAs and EAs on hand, which might be particularly useful if you’re new to the tax filing process for small business.
You can also configure a TurboTax package to suit your specific requirements, with the Self-employed package being useful for tackling both personal and business income. Overall, TurboTax is user-friendly and a practical option if you’re going to need some hand-holding along the way.
H&R Block
A beefy solution with lots of features
H&R Block is a great contender in the small business tax software arena in that it comes with an impressive array of tools for tackling more complex issues. As a brand, H&R Block is widely recognized as being one of the oldest suppliers in the business, but it does come at a price. That’s for good reason though, as H&R Block is a potent solution, with small business solutions in the shape of H&R Block Online, for the self-employed and H&R Block Office for small business.
One of the best things about it, especially if you’re a small business with demanding tax affairs, is that it’s possible to chat things through with specialists as part of the package. Choose from the likes of the H&R Drop-off service, the remote Tax Pro Go or the practical In-Office solution and all bases are covered. H&R has also teamed up with Xero, which means you also get accounting benefits too. Tie everything together and you’ve got a comprehensive solution.
You’ll want to be sure you’re going to make use of all its features if you do go for H&R Block, but it’s certainly got the lot. Packages cover a raft of users, but sole proprietors will want to look at the likes of Premium Online or Self-Employed Online. H&R Block also has new products under the Online Assist banner, that feature on-demand help from a tax expert, enrolled agent, or CPA.
Drake Tax
Drake Tax isn’t just a little bit cheaper than its competitors―it’s a fraction of the price. Yet, Drake provides very capable tax software and has been in business since 1977. All state programs are included, and you can prepare multiple state returns for a single business with no additional charge. While Drake is great software, it’s desktop software that doesn’t have advanced integrations. Drake’s attractive price―$345 for 10 returns of any type―makes Drake a good fit for tax firms that prepare 30 or fewer individual and business tax returns.
Pros
- Prepare any income tax return: forms 1040, 1120, 1120S, 1065, 1041, 706, 709, and 990
- Pay per Return package converts to Unlimited after 85 returns
- All 50 states included
Cons
- No integrated tax research service
- No integrations with popular bookkeeping software
- Navigation between screens is not intuitive
Drake Tax Pricing
- Pay per Return: $345 for 10 returns, plus $29.99 for additional returns
- Price includes unlimited states per return
- Converts to Unlimited plan after 85 returns are purchased
- Unlimited: $1,625 for unlimited returns including states
Either package can be hosted on the cloud for an additional fee of $99 per month per user.
Features
Drake Tax isn’t only a great value in professional tax software, it also has many useful features such as Look Back and Double Check that will save you time when preparing returns. Its hardware add-ons and paperless options also streamline the process:
- Look Back: The Look Back feature lets you view the prior year’s tax return data, which can be useful when comparing information. Use a keyboard shortcut to toggle between Look Back and the current view.
- DoubleCheck: This is Drake Tax’s diagnostic tool, and it can track any changes that affect verified data entry items. If any changes are detected, DoubleCheck will flag it for review automatically.
- Hardware add-ons: You can simplify tax preparation using optional hardware add-ons such as an e-signature pad, which allows clients to digitally sign returns. Another add-on is a bar code scanner, which enables importing data from W-2s or K-1s with 2D bar codes.
- SecureFilePro: If you’re looking for paperless options, SecureFilePro allows users to obtain source documents from their clients electronically for tax preparation.
- Multi-state returns: Drake Tax allows you to create an unlimited number of state returns for each federal return for no additional charge.
Our Expert Opinion
Drake Tax offers great value to firms that want the ability to prepare any type of income tax return. It offers most of the same features as more expensive software, including client organizers, a tax planner, MFJ to MFS comparison, and multistate returns. The e-file center works like most professional software packages and includes an option to attach electronic client signatures, so there’s no need to print out Form 8879 for your client to sign.
Unlike some popular professional software, you cannot purchase Drake Tax bundled with a tax research service. If you do require a tax research service, then you may want to check out CCH Axcess Tax, which we selected as the best cloud-based software to manage a whole accounting firm. CCH Axcess Tax products include Accounting Research Manager, which is the accounting industry’s largest and most comprehensive online database. CCH Research provides up-to-date tax and accounting information with powerful search functionality, which ultimately saves you time.
Lacerte
Lacerte is Intuit’s high-end tax preparation software for preparing the most complicated tax returns, such as consolidated returns and returns for oil and gas companies. Lacerte can import balances from QuickBooks Desktop and integrate with Intuit Practice Management. You can only get pricing information by speaking with a sales representative.
Pros
- Consolidate subsidiary tax returns
- Complete complex oil and gas returns
- High-end software that provides a pay-per-return option
Cons
- No forms-based data entry
- No integrated billing clock
- No upfront pricing
Lacerte Tax Pricing
Lacerte Tax only provides pricing information through a sales representative. The company offers three plans:
- Lacerte 200 Federal 1040: Provides 200 individual returns for a fixed price and business returns for a pay-per-return fee
- Lacerte Unlimited: Provides unlimited individual and business returns for a fixed price
- Lacerte REP: Provides pay-per-return pricing for individual and business returns, but also requires an annual license fee
Features
Lacerte Tax is a powerful tax solution that offers a variety of tools to help streamline your practice. These tools include an expansive form library, a paperless option for organizing and collecting tax information, and a variety of tax analysis and planning tools. Lacerte Tax’s missing client data tool and trial balance utility will also help to save time:
- Comprehensive form library: Lacerte Tax gives you access to more than 5,700 forms, including multistate, K-1s, and 5500 benefit plan returns, which enable you to service a variety of clients and businesses.
- E-organizer: A paperless option for the organization and collection of information for the tax filing process, E-organizer assists with sending questionnaires, forms, and emails to clients. It provides them with access to a customized, password-protected executable file, which includes detailed information on how to use the organizer and FAQs.
- Missing client data tool: The built-in missing client data utility tool identifies fields with missing information and sends requests to your clients for the required information and documents. This reduces the hassle of tracking down client data by allowing tax preparers to flag the missing field for future reference or until data is received.
- Trial balance utility: The trial balance utility helps to develop a chart for accounts, modify journal entries, review trial balance reports, and more. It can also import data easily from QuickBooks and EasyACCT, which will seamlessly export to Excel.
- Tax analysis and planning tools: With the combination of Tax Planner and Tax Analyzer, you have access to sophisticated tax analysis and planning tools. Tax Planner provides customized plans for each client’s future liability based on current and future state and federal tax rates. Tax Analyzer assists professionals with managing their liabilities and financial health, red-flagging amounts that are most likely to trigger an IRS audit.
Our Expert Opinion
Lacerte is quality tax preparation software that’s right for any size firm that prepares complicated tax returns on a regular basis. Lacerte is expensive, but with complicated returns, you should be able to recoup the cost through client fees.
With Lacerte, you can prepare all individual and business returns, including forms 1040, 1120, 1120S, 1065, 1041, and 990. It can also prepare gift and estate tax returns, forms 709 and 706 as well as Form 5500 benefit plan returns. Lacerte includes time-saving features like importing forms from financial institutions, importing capital gain/loss transactions from a spreadsheet, and a QuickBooks Accountant Desktop Integration.
While Lacerte Tax is an excellent option if you’re preparing complicated tax returns, it’s not ideal for firms that are looking to save money. If your needs aren’t as complex, you might want to consider software such as ProSeries Professional. We selected it as the best overall professional tax preparation software, and it’s ideal for smaller firms that prepare less than 200 returns per year or firms that primarily specialize in individual returns. It also lets you choose to enter data through forms or quick-entry sheets and offers an integrated billing clock.
Conclusion:
Tax planning is one of the most important part in managing your small business. But often times it is confusing for small business owners to accomplish this task. That’s why there are several software’s available in market that helps you to improve your tax planning like best business tax planning software or about best small business tax software.