The United States tax system is complex, and paying taxes is one of the least rewarding responsibilities for U.S. citizens. That said, no one wants to pay more than they should in taxes. There are many software packages to help you pay your taxes. While some of them are better than others, there are a number of options that should fit into most people’s budget to help you file your taxes without any stress or rage.
In this article, we shall be learning more about tax software for personal and business use.
FreeTaxUSA
Best for wanting to maximize value for dollar
FreeTaxUSA emphasizes the value provided for free federal filings, including Schedule C and 1099 income and deductions, which it contrasts to the need to purchase upgrades from TurboTax and others. State form filing is $12.95 per state. The company promises that “customers get the same business write-offs, the same calculations, and the same tax refund as more expensive services.”
The web-only online forms completion task guides users through a narrative set of questions about their business, such as “Do you need to enter information for another business?” when filling out business income.
FreeTaxUSA will import prior-year returns from TurboTax or H&R Block rather than users having to key those in.
Similar to other services, TaxFreeUSA offers guarantees. They include refunding your fees and giving you a credit to future service if you can show another online service is able to get you a larger refund. The company also pledges to pay penalties and interest if any are incurred via the service.
FreeTaxUSA also offers a Deluxe add-on option, for $6.99, that adds the ability to get priority in a chat queue for online support, and assistance with audits, and unlimited amended returns.View now at FreeTaxUSA
Jackson Hewitt Tax Pro from Home Premier
Best for complex returns needing professional input
Unlike most online tax offerings, Tax Pro from Home, either as a web form or a mobile app, gives you a real, live human being to assist you via telephone or a secure chat channel, for an unlimited number of sessions, rather than leaving you in a do-it-yourself process.
The premise that the company is operating on is that you still want an office visit, but you can’t get there because of the pandemic. “This year, prepare your taxes from the comfort of your own home without the office visit,” says the company.
Jackson Hewitt emphasizes the time savings, the certainty, and the flexibility of the human element.
Pro from Home has three tiers of pricing: Standard, for $69, plus $50 per state return; Deluxe, for $179 plus $50 per state; and Premier for $249 plus $50 per state.
The top tier, Premiere, is the one recommended for small businesses. It adds capabilities for handling complex return situations, such as where there’s more than one self-employed source of income, dividend income, daycare expenses, and all manner of itemized deductions.
The company offers a “lifetime accuracy guarantee,” with reimbursement for penalties and interest in the case of a preparation error; and a “maximum refund guarantee,” refunding the fees plus $100 if another preparer can show you deserve a higher refund.
In addition to the web version, you can use the mobile app for iOS or Android to step through the process.View now at Jackson Hewitt
TaxAct: Best tax software for small business owners overall
Who can use TaxAct: General partners, S-Corp owners, C-Corp owners, and LLC members.
Cost:
- TaxAct Business online: $109.95 for federal return; $49.95 per state return.
- TaxAct Business desktop (Windows operating systems only): $109.95 for federal return; $49.95 per state return.
Pros: If you’ve filed business taxes before and feel confident navigating tax jargon, TaxAct is a cost-effective and straightforward option. Unlike industry heavyweight TurboTax, you can file your business tax return online with TaxAct. And there’s no upcharge if you prefer the downloadable desktop version (though it’s only available to Windows users).
Cons: In 2020, S-Corp owner and Insider contributor Eric Rosenberg reported running into an issue with his California tax ID number on TaxAct, which resulted in him having to print out and mail his state return rather than filing online.
File your small business taxes with TaxAct »
TurboTax
Owned by Intuit, the company behind QuickBooks, TurboTax is the most popular and widely used tax preparation software for both individuals and businesses. We chose it as the best overall because it offers an easy-to-use interface and both DIY tax filing and filing with the assistance of a tax professional.
TurboTax has created one of the most intuitive user interfaces available. Users can get started by importing a PDF of a past tax return and uploading pictures of W-2 and 1099 forms. From there, the software uses a series of prompts and questions to help finish and file the return.
When it comes to business taxes, TurboTax searches for industry-specific deductions other providers might miss. Users get guidance through the software for common expenses and can even track them through Intuit’s account software, QuickBooks.
Although TurboTax offers a comprehensive guided walkthrough, the software also offers an option to get direct help from tax professionals through TurboTax Live. Users can connect live on their screen with a CPA or tax professional for advice or a line-by-line review of their return or even hand off the entire return to be completed and filed by a professional.
TurboTax offers both a DIY TurboTax small business plan and a TurboTax Live plan. Fees for all plans are only due at the time of filing.
TurboTax Self-Employed Plan
- $120 + $50 per state filed
- Covers W-2 income, Earned Income Tax Credit (EIC), and Child Tax Credits
- Covers stocks, bonds, ESPPs, and other investments
- Import a PDF of a return from another tax software
- Audit Support Guarantee
- 24/7 access to an online community
- Searches 450+ tax deductions and credits
- Maximizes mortgage and property tax deductions
- Homeowner tax breaks (Schedule A)
- Auto import investment income
- Rental property income and tax deductions
- Guidance for contractors, freelancers, and small business owners
- Uncover industry-specific deductions for more tax breaks
- One-on-one help from self-employment specialists
- Expense, mileage, and job tracking
- Import 1099-MISC from a photo
TurboTax Live Self-Employed Plan
- $200+ $55 per state filed
- Prep, print, and e-file with help from a tax expert
- Import W-2 from a photo
- Final review and/or filing from a CPA or Tax Expert
- Talk with a tax expert about 450+ deductions and credits
- Review mortgage tax deductions with a CPA or Tax Expert
- Donation deduction support
- Covers stocks, bonds, ESPPs, and other investments
- Covers rental property income and tax deductions
- Auto import investment income
- Tax advice to make the most of self-employment income and expenses
- Industry-specific deductions
- Personalized audit assessment
- Expense, mileage, and job tracking
RUNNER-UP, BEST OVERALL H&R Block
Established in 1955, H&R Block is one of the oldest and most well-known tax preparation services, with over 10,000 offices worldwide. We chose it as our runner-up because it offers most of the same online services and professional assistance as TurboTax with a less-intuitive interface but at a lower cost.
Although H&R Block offers a similar walkthrough with guidance as TurboTax, its interface is not quite as elegant, and some terms and steps are not as well explained. Users can still get started quickly by importing previous tax returns, uploading images of W-2 forms, and filing Schedule 1 through 3 Forms which let them report business income.
Like TurboTax, H&R Block also offers users the option to file taxes completely on their own or have their return reviewed by a tax expert, EA, or CPA for an extra fee. Users can also schedule an in-office appointment with a tax professional at one of H&R Block’s thousands of locations.
Like TurboTax, H&R Block splits its offering between the DIY File Online and Online Assist plans. All plans include on-demand chat, screen sharing, and an online help center.File Online Plans
Premium Online Plan
- $69.99 + $44.99 per state filed
- For freelancers, contractors, and investors
- Snap-a-pic W-2 import
- Self-help via a help center
- Earned Income Tax Credit
- Student loan interest
- Retirement plan income
- Social Security income
- Six years’ access to tax returns
- Technical support (by chat or phone)
- Health Savings Account (HSA)
- Real estate taxes
- Mortgage interest
- Cost basis calculation
- Freelance/Contractor income
- Stock sales income
- Rental property income
Self-Employed Online Plan
- $87.99 + $44.99 per state filed
- For self-employed and small business
- All Premium Online Plan features
- Expense import from popular expense tracking apps
- Import Uber driver tax information
- Small business expenses, including home office, depreciation, and vehicle expenses
Online Assist Plans
Premium Online Assist Plan
- $159.99 + $49.99 per state filed
- For freelancers, contractors, and investors, including help when needed
- Unlimited expert help
- Snap-a-pic W-2 import
- Earned Income Tax Credit
- Student loan interest
- Retirement plan income
- Social Security income
- Six years’ access to tax returns
- Transparent pricing with Price Preview
- Guidance for homeowners
- Technical support (by chat or phone)
- Health Savings Account (HSA)
- Real estate taxes
- Mortgage interest
Self-Employed Online Assist Plan
- $194.99 + $49.99 per state filed
- All Premium Online Assist Plan features
- Expense import from popular expense tracking apps
- Import Uber driver tax information
- Small business expenses, including home office, depreciation, and vehicle expenses
File your small business taxes with TurboTax »
BlockAdvisors: Best tax solution for filers who want a lot of support
Who can use BlockAdvisors: General partners and S-Corp owners.
Cost:
- File online with unlimited expert help: $145 and up for federal return; $36.99 per state return.
Pros: BlockAdvisors provides wraparound support for small business owners including tax prep, bookkeeping, and payroll services; this is an advantage if you’re looking for all-in-one financial help, though each service can be purchased individually, including tax prep.
Plenty of help is available if you need it: You have the option to hand off your taxes to an expert (costs will vary) or DIY your taxes online with unlimited help.
Cons: Total filing costs aren’t clear up front, and the starting price is higher than our top choice, TaxAct.
Conclusion
After a year of intense work, we have released a booklet that will help you with the preparation of tax returns for your small business and individual clients. It is designed for tax professionals who want to get a head start on their next tax season.