Wondering if your small business needs to use tax software, or what the best tax software for small tax preparers is? I’m going to go over a few factors that might help you decide how to use a piece of software to file your taxes, and I’ll discuss some options available to run your business tax free.
Tax season has arrived. If you are a small business owner, you must be busy writing your own tax returns. Thankfully, there’s plenty of tax software out there to help you out. Given the vast array available, you might feel overwhelmed with all the options. You might even ask yourself: “What is the best tax software for small businesses?” Don’t worry because I’m here to guide you towards making an informed choice that will help you reduce your stress levels while saving money at the same time.
TurboTax
TurboTax is one of the most popular tax software options for a reason (well, several). For starters, the software walks you through every step of the tax-filing process, asking clear questions and pointing you toward often overlooked tax deductions. The clean interface speeds up tax filing, and TurboTax’s maximum refund guarantee gives you some extra peace of mind.
That said, the features and reliability definitely come with a cost—especially if you wait until the end of the tax season to file, when TurboTax’s prices tend to jump. Currently, TurboTax Self Employed starts at $120 for federal taxes and $50 per state. If you’re a member of a partnership, S Corp, or C Corp, you’ll want TurboTax Business, which starts at $170 for federal plus $55 per state.
H&R Block
While TurboTax is an excellent option, H&R Block also did extremely well in our evaluation. H&R Block includes many of the same features as TurboTax, sometimes including some premium features in their more budget-friendly packages. While the customer support isn’t always as efficient as TurboTax, it’s still good and the overall user experience is comparable. H&R Block features H&R Block offers the full range of features you’d expect from a premium tax software provider. You can upload your W-2 by taking a photo or scanning, store your information in the cloud, work between multiple devices, and get suggestions and advice on things like deductions. The ‘semi-guided’ user interface is easy to navigate, and the Q&A format is extremely useful for making quick progress. Cost of H&R Block Overall, H&R Block tends to be a little cheaper than TurboTax when comparing equivalent packages. The free version also includes more, such as free state tax prep and filing. H&R Block also includes many ‘premium’ features in their less costly selections. Be sure to check H&R Block’s website for their latest prices and features. Free Federal: $0 State: $0 For filing a 1040EZ or 1040. You can also get help with mortgage and Earned Income Credit deductions. No charge for state taxes. Deluxe Federal: $34.99 State: $36.99 Added tools to help you maximize deductions, live chat with a tax expert, and the ability to upload last year’s return. Premium Federal: $54.99 State: $36.99 The upgraded version of Deluxe for freelancers or those with investment income. Self-Employed Federal: $74.99 State: $36.99 As above, with extra help maximizing business and personal deductions/expenses. H&R Block: What’s not included? As with a lot of tax software providers, it’s extra to file for state taxes. Audit support is also $19.99 extra.
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.
BlockAdvisors
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 TaxAct.
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.
Conclusion
This is an excellent time to be part of your industry, but that doesn’t mean you shouldn’t seek to increase your efficiency. There are now many companies that focus on allowing tax preparers to be more efficient at their jobs through affordable software. These systems will allow you to save money and time so you can focus more of your efforts on growing your business.