As a small business owner, managing multiple tasks, including filing taxes, can be overwhelming. However, utilizing the right online tax filing software can be a game-changer in time and cost savings.
Online tax software programs simplify the filing process by eliminating the need for back-and-forth communication with an accountant. Even if you need more professional tax knowledge, these services provide step-by-step guidance to ensure all necessary information is included before submission.
For those seeking personalized advice on their tax situation, many online software programs offer options to upgrade for live support. This may include one-on-one assistance from a qualified tax professional.
To assist small business owners in meeting their tax obligations before deadlines loom large, we have compiled a list of top-rated tax filing software programs. Our focus was on selecting platforms that cater specifically to small business needs and encompass self-employed individuals, freelancers, sole proprietors, and those engaged in secondary income ventures.
Read further to gain valuable insights into each program's features and offerings so you can make an informed decision regarding fulfilling your taxation requirements.
7 Best Small Business Tax Software
- TurboTax – Best Small Business Tax Software Overall
- TaxSlayer – Best Affordable Software
- H&R Block – Best for Variety of Support Options
- TaxAct – Best for Accuracy Guarantee
- Jackson Hewitt – Best User Interface
- FreeTaxUSA – Best Free Tax Software
- IRS Free File – Best Free Option for Self-Employed
TurboTax – Best Small Business Tax Software Overall
Intuit TurboTax stands as our top choice for online tax software designed for small businesses due to its user-friendly interface, extensive database of deductions and credits, and dedicated support tailored toward startups.
This comprehensive solution caters to businesses of all sizes and types despite being priced slightly higher than other tax software programs. Small business owners can select either the TurboTax Self-Employed online package or the TurboTax Business application within the Intuit TurboTax framework.
To provide peace of mind for its users, Intuit's software maintains a vast database consisting of over 350 deductions and credits. The program actively searches for relevant deductions and credits to optimize your tax return.
Upon completing the necessary forms, TurboTax conducts an accuracy check before transmitting your files to the IRS. Since errors or omissions can pose significant business challenges, your chosen software must provide a feature that allows you to review your filing information thoroughly.
Pros of TurboTax
- Generate unlimited W-2s and 1099s for employees
- All packages cater to each type of business entity
- Effortlessly import income from platforms like Uber, Lyft, and Square and seamlessly integrate with QuickBooks
- Enjoy step-by-step guidance presented in a Q&A format that’s easy to follow
- TurboTax Premium Live offers on-demand advice and a final review from a tax expert or CPA
- Opt for Live Full Service to have a tax expert prepare, sign, and file your return
- Access audit support for free assistance if you receive an IRS or other tax notice
Cons of TurboTax
- Considered among the pricier options available
Pricing
- TurboTax Premium: $129, state additional
- TurboTax Premium Live: $219, state additional
- TurboTax Premium Live Full Service: $409, state additional
>> Get Started With TurboTax >>
TaxSlayer – Best Affordable Software
TaxSlayer has been chosen as an optimal option for small business filers due to its ability to handle complex returns at a competitive price compared to other major players. The platform offers a dedicated phone line for priority assistance, efficient customer service, and an intuitive interface that simplifies the tax filing process.
Furthermore, TaxSlayer allows users to personalize their level of support. The guided interview feature takes individuals through a step-by-step procedure, ensuring accurate and swift filing.
Alternatively, suppose users are well-versed in tax processes and don’t require guidance. In that case, they can directly access specific tax forms to input their income and deductions independently.
One advantage of using TaxSlayer SE is the opportunity to electronically file federal and state tax returns for approximately $100. In contrast, other programs like TurboTax charge nearly $200 for the combined filing service and an additional fee should customers seek expert advice.
Pros of TaxSlayer
- Features low state filing fees
- Provides one-on-one support from genuine tax experts through Ask a Tax Pro
- Guarantees 100% accuracy, with TaxSlayer reimbursing you for any penalties or interest charges
- Offers a maximum refund guarantee, or TaxSlayer will refund the plan fees you paid.
- Includes IRS inquiry and audit support
- Offers a more budget-friendly plan, providing an affordable choice for those with non-simple returns who require an upgrade
Cons of TaxSlayer
- Requires the entry of a discount code to access lower prices
Pricing
Presently, TaxSlayer presents an exceptional opportunity to obtain its Self-Employed package at a remarkably affordable rate of $47 and an additional $32 for state filing.
Even more remarkable is that this price encompasses the availability of a tax professional well-versed in self-employment matters and assistance with audits and top-tier email and phone support.
Undoubtedly, the most significant advantage of utilizing TaxSlayer is its affordability. Although its competitors may lack some advanced features, it provides everything necessary to complete your small business tax return at a fraction of the cost. Furthermore, TaxSlayer is compatible with all iOS and Android devices.
>> Get Started With TaxSlayer >>
H&R Block – Best for Variety of Support Options
H&R Block is widely recognized for its physical offices across the United States. However, the company also offers convenient online filing options and downloadable computer software. If you opt for the online package, you have the flexibility to work on your taxes using their mobile app for Android and iOS devices.
H&R Block caters to many tax filers with a modern and user-friendly interface. Similar to other tax-preparation services, their platform guides users through a series of questions regarding their household income and potential deductions and tax credits.
In addition to providing answers to these questions, you will need to input information from your employer, other sources of income, and various tax forms such as 1099s, 1098s, and W-2s that may arrive in either physical or electronic form.
If you have concerns about making errors, missing out on deductions, or being overwhelmed by the complexity of tax forms, fear not! H&R Block can connect you with a professional from their network for an extra fee. This ensures that expert help is just a click away should you require it.
Pros of H&R Block
- Offers straightforward step-by-step guidance that’s easy to follow
- Provides unlimited on-demand chat or video support with Online Assist plans
- Boasts over 11,000 physical locations, allowing for in-person meetings with tax experts
- Guarantees a maximum refund, or H&R Block will refund the plan fees paid
- Includes an audit support guarantee, offering free assistance in the event of an IRS or other tax notice
- Ensures 100% accuracy, with H&R Block reimbursing you for any penalties or interest charges up to $10,000
- Grants the ability to consult with a tax expert with an average of 10 years of experience (additional cost may apply)
Cons of H&R Block
- Considered one of the pricier software programs
- Plans that involve consulting with a live tax expert cost more for federal returns
Pricing
- Free Online: $0. This option covers W-2 income, unemployment income, interest and dividend income, retirement distributions, student loan interest deduction, tuition and fees deduction, the child tax credit, and the earned income tax credit (EITC). It doesn't allow for itemized deductions, which is typical for free versions of tax preparation software. Notably, H&R Block's free version includes student deductions, unlike others.
- Deluxe Online: $35. This package includes everything from the free version, with additional features such as the mortgage interest deduction and health savings accounts. Additionally, it enables users to itemize deductions.
- Premium Online: $65. Building upon the Deluxe version, this package offers support for rental property and freelance/contractor income below $5,000. Users can also import mileage and other expenses from common tracking apps.
- Self-Employed Online: $85. As the top-tier online package, this option caters to self-employed individuals, including small business owners, partners, and contractors earning more than $5,000.
>> Get Started With H&R Block >>
TaxAct – Best for Accuracy Guarantee
For individuals seeking to optimize their tax refunds by exploring additional deductions, TaxAct provides a confident solution. TaxAct's Deduction Maximizer tool throughout the tax filing process offers personalized recommendations for deductions based on your unique tax situation.
TaxAct presents a cost-effective alternative to TurboTax and H&R Block, making it an attractive option for those looking for a budget-friendly choice. While using TaxAct is comparable to utilizing TaxSlayer, the latter offers more supplementary assistance options should you require them.
With its Maximum Refund Guarantee, TaxAct promises to compensate you if another provider grants you a larger tax refund. Additionally, it proudly offers an "Accuracy Guarantee" of up to $100K. This guarantee covers IRS penalties, fees, or audit costs that are reasonable and supported by documentation about any miscalculations made by the software.
By choosing TaxAct as your tax preparation platform, you can confidently navigate your returns with comprehensive support while maximizing your potential refund amount.
Pros of TaxAct
- TaxAct is more cost-effective than other paid software options
- TaxAct offers an accuracy guarantee of up to $100,000, reimbursing you for any IRS/state penalties or interest caused by calculation errors in your return
- Provides one-on-one support from genuine tax experts, although this service comes at an additional cost
- Guarantees a maximum refund and 100% accuracy, with TaxAct refunding the plan fees paid and covering any difference in the refund or tax liability, as well as legal or audit costs up to $100,000
Cons of TaxAct
- The Xpert Help Self-employed plan incurs higher costs
Pricing
- TaxAct Self Employed (+ on-demand expert help): $64.99 for federal returns, $44.99 per state return
- TaxAct Business Online: $124.99 - $159.99 for federal returns, $49.99 per state return
Jackson Hewitt – Best User Interface
Jackson Hewitt is an ideal choice for individuals not eligible for free federal filing and seeking a user-friendly online service to prepare their tax returns.
Those who feel confident in handling their own tax preparation will appreciate Jackson Hewitt's straightforward platform, which offers clear guidance and an uncluttered interface.
Unlike other online services that offer multiple packages with different features, Jackson Hewitt provides only one package that caters to all situations. This eliminates the need to decide between plans or constantly be prompted to upgrade.
Like other online tax services, Jackson Hewitt requires users to create an account before answering questions regarding income and household details. If you opt for the DIY option, you will be guided through reporting your income and other relevant information to determine eligibility for deductions or credits before calculating your tax bill or refund.
What sets Jackson Hewitt apart is its comprehensive explanations of each tax concept, ensuring that users clearly understand what they’re dealing with. The platform allows users to navigate between sections and save progress for future reference easily.
Overall, Jackson Hewitt serves as a reliable guide in tax preparation by offering an intuitive experience coupled with informative resources.
Pros of Jackson Hewitt
- There are no interruptions or attempts to upsell you to higher-tier packages
- Jackson Hewitt offers a flat fee of $25 to prepare and file both state and federal returns
- Jackson Hewitt provides a 100% accuracy guarantee that covers up to $20,000 for software-related errors in tax returns
Cons of Jackson Hewitt
- There’s no option for free filing available
- Jackson Hewitt doesn’t offer a mobile app
- Online support from tax professionals is unavailable
Pricing
Jackson Hewitt provides a tax package that caters to all tax situations, offering a more cost-effective solution compared to the lowest-priced packages offered by TurboTax and H&R Block, even before any discounts are applied.
However, it's important to note that Jackson Hewitt doesn’t offer a fee-based package, not even for the simplest tax situations. The Internal Revenue Service (IRS) estimates that up to 70% of Americans are eligible for free online tax preparation services.
Therefore, there’s no need to pay if your situation qualifies for this service. For just $25, Jackson Hewitt's inclusive bundle covers one federal return and allows you to file unlimited state returns.
This package is suitable for individuals from various backgrounds, such as homeowners, parents, freelancers, investors, essentially anyone who falls within its scope. On the other hand, H&R Block and TurboTax typically charge higher fees as your situation becomes more complex and require an additional fee per state return filed.
>> Get Started With Jackson Hewitt >>
FreeTaxUSA – Best Free Small Business Tax Software
For taxpayers with straightforward returns who don’t need to file a state return, FreeTaxUSA is an obvious choice. It’s also highly recommended for individuals who have multiple 1099 forms, receive unemployment income, or have dependents. These particular tax situations often require paid services like TurboTax, H&R Block, or TaxSlayer.
Individuals who received long-term care or death benefits from insurance companies or the government should also consider using FreeTaxUSA. This platform supports Form 1099-LTC, which is not typically available in other free tax software options.
Additionally, if you earned significant income in foreign countries, FreeTaxUSA includes Form 1116 to help you claim the foreign tax credit, another feature usually absent in free tax software. FreeTaxUSA can be particularly beneficial for self-employed individuals looking for a cost-effective way to file taxes.
Tax preparation tires designed for gig workers and freelancers come with hefty price tags. While FreeTaxUSA doesn’t allow users to import multiple 1099 forms directly, it does offer the ability to enter as many as required completely free of charge.
Pros of FreeTaxUSA
- Federal filing is available for free
- The Deluxe edition offers audit defense, providing support from a representative if the IRS audits your federal tax return
- Guarantees a maximum refund, or FreeTaxUSA will refund the plan fees paid and provide a coupon for a free amended tax return
- Ensures 100% accuracy, or FreeTaxUSA will reimburse you for any penalties or interest charges
Cons of FreeTaxUSA
- Unable to import W-2s, necessitating manual entry of information
- State filing is not free, although it is offered at a low cost of $14.99
- Priority customer support and live chat are only accessible with a Deluxe edition upgrade
Pricing
FreeTaxUSA's plans eliminate the need for tiers by providing free federal returns. All their plans utilize the same software. Once you begin the small business tax preparation process, there’s no further mention of different tiers.
FreeTaxUSA only charges for their paid products, which include:
- State returns: $14.99 each
- Deluxe support: $7.99
- Pro support: $39.99
>> Get Started With FreeTaxUSA >>
IRS Free File – Best Free Option for Self-Employed
The IRS has collaborated with eight online tax software providers as part of its Free File program in 2024. If your adjusted gross income is below $79,000, you may be eligible to submit both a federal and state return free of charge if you work as a freelancer or in the gig economy.
The purpose of the IRS Free File program is to cater to lower-income taxpayers who have simple returns. However, many partners within the program offer tax forms necessary for self-employed individuals as part of their IRS Free File package.
Some examples of these partners include TaxAct, 1040.com, and our top choice for freelancers TaxSlayer. These platforms provide free forms such as Schedule SE, Schedule C, and 1099-NEC.
Nevertheless, there are a few drawbacks to consider. Not all state returns are included for free; each IRS partner specifies which states are covered under their Free File offering.
The maximum annual AGI (adjusted gross income) varies depending on the partner involved and can be as low as $44,000. Therefore, you must carefully review each product description to determine your eligibility.
For prices ranging from $0 up to just a few dollars based on your qualifying service level, you'll receive assistance and support through various means, such as email support, toll-free phone assistance, and even live chat sessions.
How We Ranked the Best Small Business Tax Software
To identify the optimal tax software for small business owners to file their taxes, we thoroughly compared each program's features.
- Cost
- User experience
- Expert tax assistance
- Better Business Bureau (BBB) rating
- Customer reviews, when available
- Accuracy and maximum refund guarantee
Cost ranked among the most critical factors in our evaluation process. While one service provides free federal filing, many business owners may seek the advantages of comprehensive software and opt to pay for tax filing.
We meticulously assessed the price per plan and scrutinized the features offered, including the capability to optimize deductions and credits. Services were ranked higher based on the value they offered per cost.
Whether you're a novice or an experienced tax filer, user experience is paramount in ensuring a smooth and frustration-free process for completing and submitting your return. Thus, the services we selected had to boast a relatively user-friendly interface.
Access to tax experts or support representatives was a significant advantage. Furthermore, services offering consumers a robust accuracy and maximum refund guarantee were positioned higher in our rankings.
We considered the Better Business Bureau rating associated with each software. BBB ratings serve as a measure of a business's responsible operations and its promptness in resolving customer complaints. Customer reviews were also factored into our assessment.
Following a thorough review of these features, we categorized our recommendations based on their suitability for overall tax filing, runner-up status, free tax software options, affordability, and accuracy guarantee.
It's worth noting that the federal and state filing fees for the mentioned software programs are subject to change without prior notice. Many programs delay charging users until they file, implying that fees may fluctuate between the commencement and submission of the tax return.
Best Small Business Tax Software – Buyer’s Guide
What Does Tax Software Do?
Utilizing online tax software streamlines completing and submitting your tax return to the IRS, making navigating complex tax laws and industry terminology easier.
Most tax software options guide you through the step-by-step process of filing taxes in an interview format, automatically populating the appropriate tax forms on your behalf.
Additionally, many platforms offer extensive FAQ sections to address any relevant questions that may arise during the filing process. The most reliable tax software considers all applicable rules and regulations to calculate your potential refund accurately.
Tax software provides two main options for submitting your return: electronic filing with the IRS or printing a physical copy for mailing purposes. These programs also allow you to input direct deposit information, ensuring that any owed refunds are sent directly to your designated bank account.
How Do You File Taxes for a Small Business?
Partnerships, multi-member Limited Liability Companies (LLCs), and S-Corporations must submit an annual tax return to disclose the business's income, deductions, profits, and losses.
Since these entities are considered flow-through structures, the owners, partners, and shareholders are responsible for paying taxes on the generated income. When being a general partner in a partnership entity, filing Form 1065 for your business is essential.
For S-Corps specifically, Form 1120S must be filed. LLCs can choose how they prefer to be taxed: either as a sole proprietorship, partnership entity or even as an S-Corp or C-Corp.
Sole proprietorships report their income on their tax returns as self-employed individuals; therefore, separate business tax forms need not be filed annually. On the other hand, C-Corporations are treated as distinct legal entities and must file Form 1120.
After filing the necessary business forms for partnerships, LCCs, and S-corps, every owner or partner receives Schedule K-1, which outlines their respective share of income that needs to be reported on their tax returns.
In addition, the independent contractors working with these businesses, along with employees, will also receive relevant forms required for completing their personal tax returns.
Why Do Freelancers Need to Use Tax Software?
If you work as a freelancer, have a side hustle, or are a business owner, you must pay both income tax and self-employment tax. Unlike traditional employees, freelancers don’t have taxes automatically withheld from their earnings.
This can make determining the exact amount owed quite challenging. Fortunately, there are tax software options available that can provide guidance and help navigate the complexities of freelance taxes.
Regarding freelance income, you may also qualify for various deductions related to self-employment taxes. These deductions can include expenses such as office supplies, travel costs, and industry subscriptions.
In most cases, you must itemize your deductions when filing your taxes to take advantage of these benefits. Using the right tax software can make this process more efficient.
It’s essential to consider that if you have multiple sources of freelance income or find yourself dealing with complicated self-employment taxes, hiring a Certified Public Accountant (CPA) instead of relying solely on tax software may be more cost effective and beneficial in navigating the intricacies of the tax filing process.
Tax Software vs. Tax Preparer for Small Business
Many online tax software providers have a specific option for self-employed individuals, allowing them to file a Schedule C, which deals with "Profit or Loss From Business." While some of these providers also offer options for more complex tax situations like partnerships or corporate tax returns, enlisting a Certified Public Accountant (CPA) may be advisable.
A CPA is an authorized accountant who assists business owners in managing their finances, including taxes and government filings. While hiring a CPA may come at a higher cost than using tax software, they can offer valuable assistance throughout the year by providing tax planning advice and strategies.
The Importance of Using Tax Software for Small Business
If you decide to handle your small business tax return, it’s crucial to utilize high-quality tax software. Given the constantly evolving tax regulations, preparing your return without such software can prove challenging, if not impossible.
One of the benefits of utilizing online tax software is that it can guide you through the process of accurately filing your taxes, even if you have limited or no knowledge in this area. It ensures that your tax return complies with the most current and up-to-date tax laws.
Another advantage of using online tax software is the time-saving aspect. By using this type of software, you can complete your return quickly without any unnecessary steps or complications.
Most online tax software uses advanced interview-style questions that help gather all necessary information efficiently while clarifying what documentation and details are required for their specific situation. Consequently, this significantly reduces the time needed to prepare a thorough and accurate return.
What Business Deductions Can I Claim as a Freelancer?
If you’re working for yourself or as a freelancer, the IRS allows you to subtract "both ordinary and necessary" expenses related to your work.
An ordinary expense is something commonly incurred by individuals in your industry and claimed by other self-employed taxpayers. On the other hand, a necessary expense is essential for you to perform your work.
The specific nature of your job will determine the variety of expenses that can be deducted. Office supplies, travel expenses, software fees, internet service charges, vehicle costs, insurance premiums, advertising fees, and legal services are some examples of common business expenses for self-employed people.
Accurately organizing and documenting your business expenses can lower the taxes you owe overall and potentially increase any tax refund due to you.
It's important to note that claiming self-employment deductions may raise red flags with the IRS and increase the likelihood of an audit. Therefore, you must retain all receipts and supporting documentation related to these deductions.
How Much Does a Small Business Have to Make to File Taxes?
Individuals who operate as sole proprietors, partners, or members of an LLC with a non-corporate tax structure must file taxes if their self-employment earnings exceed $400 for the year.
Even if you don’t meet this income threshold, other circumstances may warrant filing, such as claiming deductions and credits. S-Corporations also need to report income and losses on their personal tax return, while C-Corporations file separate tax returns from their owners.
Best Small Business Tax Software – FAQs
What IRS Forms Do Freelancers Need?
Freelancers typically receive IRS 1099-NEC forms, which provide details of their taxable income from various sources. Less common are the 1099-MISC forms, which report miscellaneous income such as rent payments or attorney fees.
If your earnings exceed $20,000 and you conduct more than 200 transactions through online payment services in 2023, you will be issued a 1099-K form. However, the IRS has temporarily halted the implementation of this tax reporting change for the current tax season, resulting in fewer freelancers receiving this form.
Most freelancers must complete IRS Schedule C - Profit or Loss from Business when filing their tax returns. Self-employed individuals use this form to report their taxable income and business expenses to claim tax deductions.
How Do I File Taxes If I Am Self-Employed?
Self-employed individuals must disclose their earnings by completing a Schedule C form when filing their taxes. According to the IRS, if their net self-employment income exceeds $400, they must also utilize Schedule SE to calculate self-employment tax.
Should I Pay Taxes Quarterly or Yearly?
To avoid penalties from the IRS, many self-employed individuals must make estimated quarterly tax payments. This is necessary because the United States operates on a pay-as-you-go tax system, which means that self-employed individuals don’t have taxes withheld from their paychecks by an employer.
The 1040-ES worksheet considers various factors such as filing status, income, deductions, credits, and more to determine the amount owed. It serves as a helpful tool in calculating your quarterly tax obligations.
Bottom Line – Best Small Business Tax Software
Tax season, much like mud, hurricane, and blackfly season, is an annual event that many people dread. However, with the right small business tax service, you can make the process more manageable and less stressful.
Similar to how you prepare for mud or storms in advance, it's wise to start getting ready for tax season ahead of time. There are numerous options available regarding online tax software, so choosing one that best suits your needs is essential.
We highly recommend TurboTax as our top choice. However, regardless of which service you decide on, it's crucial to consider factors such as price, ease of use,e customer service options, and overall value before committing.
>> File Your Taxes Online With TurboTax >>
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