Startup businesses are the backbone of the US economy. Fortunately, there is tax software designed just for these businesses. The best startup tax software consist of simple business tax forms that are designed to meet the needs of the business owner. The best startup tax software for filing taxes is affordable, easy to use, and provides detailed step-by-step guidance.
For tax season, we have created a comparison table for several of the most popular tax software packages used by startups. The table includes criteria such as ease of use, number of returns, and special startup features to help you choose the best tax software.
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.
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’s goal is to create an easy way for both businesses and individuals to file their own taxes online. The company promises that if your tax return isn’t accurate, they’ll refund the cost of the software, pay any difference in your lower refund or higher tax liability, and cover related legal or audit costs up to $100,000.
A Closer Look at TaxAct
TaxAct’s software options are targeted toward several types of business entities, including tax-exempt entities. For example, self-employed individuals, freelancers, independent contractors, and other sole proprietors can use TaxAct Sole Proprietor, which helps you maximize your deductions.
If you need to file specialized tax forms, such as for a C-Corporation or LLC, TaxAct walks you through choosing the correct product to get the software and forms you need, too.
You can get help online from the Answer Center or contact TaxAct for free support if needed. Another great feature is that once you’ve used TaxAct to file your taxes, you have unlimited access to your previous year’s tax return for seven years after the filing deadline.
TaxAct Pricing
All of TaxAct’s software costs $59.95, regardless of your business entity.
TurboTax
There’s a lot to love about TurboTax. First off, you can get on-screen guidance and answers to your questions. They also run error checks on your tax returns as you complete them, and double check your return before it’s filed. If TurboTax miscalculates and you have to pay a penalty, they will repay the penalty plus interest.
A Closer Look at TurboTax
TurboTax offers separate software for different types of businesses. For example, TurboTax Self-Employed is designed to help self-employed individuals, freelancers, and independent contractors maximize their tax credits and deductions. Whether you’re a real estate agent, craftsperson, consultant, or digital designer, the software helps you find tax credits and deductions specific to your industry.
If you own a partnership, C-corporation, S-corporation, or LLC with more than one member, you’ll want to step up to TurboTax Business. This downloadable tax preparation software for small business automatically imports your QuickBooks income and expenses into your tax returns and classifies them. It can also automatically import last year’s tax return, provided you used TurboTax to create it. You can also create unlimited W-2 and 1099-MISC forms, among others, which is useful if you have employees or use independent contractors.
Is your business tax situation unusual or complex? For a few dollars more, TurboTax Live gives you access to a one-on-one review by a CPA or enrolled agent (EA) before you file your taxes, which helps you prepare your taxes with real-time help from experts. They can search more than 450 tax deductions and tax credits to find the ones you’re entitled to.
TurboTax Pricing
TurboTax Self-Employed costs $89.99, or $169.99 if you opt for TurboTax Live. TurboTax Business costs $159.99.
H&R Block
H&R Block lets you choose how you want to handle your tax filing—either do-it-yourself or totally hands-off.
A Closer Look at H&R Block
If you want to do it yourself, use the Self-Employed software to file your taxes online. H&R Block helps you find industry-specific deductions and tax credits, as well as those related to startups. The product includes the Stride app, which automatically tracks your mileage, receipts, and business expenses. It supports Schedule 1040, Schedule 1040A, Schedule 1040 EZ, W-2s, 1099s and Schedule Cs, among many others.
If you want to let the pros handle your tax filing, H&R Block Tax Pro Go is for you. Just upload your tax documents, and H&R Block matches you with a tax pro who has the right expertise for your business. Your returns are prepared virtually within five days—you can message your tax pro at any time, too.
Whichever product you choose, you can add Tax Pro Review for an additional fee. A tax professional reviews your return to make sure it’s accurate and that you received all the deductions and credits you are entitled to. They can also file any tax form you need, even if it’s not included in the tax preparation software you purchased.
Finally, their Peace of Mind tax notice services are available at an additional cost. If you get notified of an audit, an H&R Block Enrolled Agent will accompany or represent you. H&R Block also reimburses up to $6,000 toward any taxes you owe due to errors on their part.
H&R Block Pricing
H&R Block Self-Employed costs $79.99, plus $36.99 per state, but you can take advantage of a free trial.
Conclusion
For startup companies, tax time can be the worst time. But it doesn’t need to be. Tax preparation software makes it easier for small businesses to file their taxes, saving valuable time and money that can be put back into growing the business.