It is your responsibility to prepare accurate annual tax returns if you run a small business. The National Society of Accountants estimates that the average cost to prepare taxes for a small business is $184 per year for Schedule C, and $826 per year for a corporation. You can save a lot of money by doing your taxes yourself with small business accounting software, even though an accountant may provide peace of mind.
While most tax software packages offer similar guarantees for accuracy and a maximum refund, the user experience and features can vary greatly. To select the best tax software for small businesses, we reviewed 10 different software options based on product features, ease of use, accuracy, and more. If you’re a small business owner looking to file taxes this year, here are the best offerings.
H&R Block
H&R Block was selected as the best overall tax preparation provider because it offers excellent user experience, covers a wide range of tax situations, and is a trusted name in tax preparation. You can do your taxes accurately the first time you use it because it offers a straightforward user interface.
Pros
- Tax returns for self-employed people and small businesses are included in the online version
- On-demand assistance from a tax expert available as an upgrade
- The mobile app allows you to upload tax documents and track the status of your filing
Cons
- Prices for business editions are higher than those of its competitors
- Mobile users may not be able to access some functionality
A well-known brand in tax preparation for individuals and businesses is H&R Block. Over 800 million tax returns have been prepared by the company since it was founded in 1955. H&R Block offers both online and downloadable versions of its tax software if you want to do your own taxes. In the 2019 tax year, H&R Block prepared almost 22 million tax returns, and nearly 9 million people used H&R Block Online.
Desktop Windows users get the most robust options, including tax forms for corporations and partnerships as well as employee-specific forms. This is available through H&R Block’s downloadable Premium & Business software, which costs $89.95 plus $39.95 per state return. If you only need a Schedule C, you can file with Premium Online edition for $69.99 or Self-Employed Online for $114.99. Each state requires an additional fee of $44.99 per filer. Their Self-Employed edition, their top-tier online option, is ideal for businesses with significant business expenses.
A good feature of the software is that it guides you through complex tax situations. 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. Premium costs $159.99, Self-Employed costs $194.99, plus $49.99 per state.
It comes with a 100% accuracy guarantee and a maximum refund guarantee, whether you file online or download. There is a guarantee of audit support for all versions. No matter which option you choose, H&R Block covers most tax situations and is a top choice for many business owners, which is why it gets our top overall rating.
TaxAct
As the only place where you can prepare taxes for partnerships or S corporations online, TaxAct has the option of completing tax filings completely online for partnerships and corporations. Our recommendation is that TaxAct be used by partnerships and corporations.
Pros
- S corporations, C corporations, and partnerships can file taxes completely online
- Support by phone and email from tax specialists is unlimited for free
- You can choose between an online or downloadable version
- Tax bundle discounts are available for individuals and businesses
Cons
- Audit support options are limited
- There may not be an electronic filing option for state forms
- Only available for Windows
Since 2000, TaxAct has completed over 80 million tax returns online and in downloadable form.
It will cost $124.95 plus $49.95 per state for business owners to file online. That includes sole proprietors who file a Schedule C, partnerships who file a Form 1065, and corporations who file a Form 1120 or Form 1120s. Tax-exempt organizations, however, must use the downloadable version in order to file Form 990.
Download version (Windows only), which includes five federal e-files, costs $109.95. Each state costs $50. For $200, you can bundle personal and business services.
Despite being less polished than some of the bigger competitors, the online experience is still intuitive. If you need assistance along the way, both tax help and technical support are available by phone. You can also contact customer service by email (without tax help).
TaxAct guarantees accuracy and maximum refunds, but audit support is not included. During your tax preparation process, you can add audit support through their third-party partner Protection Plus. Those who are able to handle things primarily themselves will find TaxAct an excellent choice, and if you are a PC or Mac user and would like to do your own partnership or corporation taxes, it is your only option, which is why it’s our top choice for partnerships and corporations.
TaxSlayer
For self-employed tax filers earning via a 1099 and needing to complete a Schedule C, TaxSlayer’s low pricing and highly rated online experience make it the best.
Pros
- Compared to larger competitors, they provide low-priced federal tax returns
- Access to a tax professional is included in the self-employed edition
- Phone, email, and chat support are available
- Active-duty military families are entitled to free filings with the federal government
Cons
- There is no download version available
- Partnerships and corporations cannot use forms 1065, 1120, or 1120S
TaxSlayer has been preparing taxes since 1965. It began offering tax software to professional tax preparers in 1991 and launched its consumer-facing do-it-yourself tax software business in 1998. Your taxes can be done online with TaxSlayer or via the TaxSlayer mobile app.
It costs $59.95 plus $39.95 per state for the Self-Employed edition. Those who operate as sole proprietors or LLCs can prepare their 1040 Schedule C on this version. TaxSlayer Self-Employed can handle your needs if you have a side business and get a 1099 tax form. Federal tax forms are free for active-duty military personnel, and state tax forms are $39.95 each.
With the Self-Employed edition, you will have access to a tax professional to assist you with all of your individual tax questions. In addition to phone, live chat, and email support, technical support is also available. Upon acceptance of your return, both the Premium and Self-Employed editions include audit assistance for up to three years.
There is a 100% accuracy guarantee and a maximum refund guarantee with TaxSlayer. Despite not being able to handle complex tax returns for certain businesses, it excels at handling the needs of many self-employed individuals, making it our top choice.
TurboTax
TurboTax is our pick for best virtual assistance because it offers on-demand assistance from a tax professional at home, as well as robust technical support for online and downloadable products.
Pros
- There is a download version available for all types of small businesses, including self-employed individuals
- Live support from a CPA or EA is available with the online version
- Easy-to-use online interface
Cons
- It is more expensive than some competing tax software for small businesses
- Forms 1065 and 1120S are only available in the Windows desktop version
- Without paying for TurboTax Live, you can get some additional tax support
One of the largest providers of DIY tax software, TurboTax is a good choice for many businesses. Intuit, a California-based software company founded in 1983, owns TurboTax, which offers online, desktop, and mobile versions.
TurboTax Self-Employed, which includes personal and business income and expense tax forms, will be most useful to business owners using TurboTax online. There is a fee of $120 plus $50 per state for this version. For $200, Windows users can download TurboTax Home & Business, which includes five federal e-files and one state. The cost of additional states is $45. If you want to prepare taxes for a partnership or corporation, you’ll need this version.
When you need extra help with your taxes or have questions along the way, TurboTax Live provides access to a CPA or other tax expert on-demand, including evening and weekend hours. It costs $199 plus $54 per state for TurboTax Live Self-Employed. In addition to tax support along the way, your taxes will be reviewed before you file. All TurboTax options include regular access to product and technical support.
There is a 100% accuracy guarantee with TurboTax regardless of the option you choose, as well as a maximum refund guarantee. For most returns, customers are also protected by audit support for three years. In addition to its excellent user interface, TurboTax also comes with built-in guidance while completing your taxes. It may be a good idea to add TurboTax Live to your account if you would like extra assistance as you go along. With this tool, TurboTax is the best tax software for at-home assistance.
FreeTaxUSA
For low-cost returns, FreeTaxUSA’s pricing starts at $0 for federal returns and $14.99 for state returns including self-employment income.
Pros
- For business taxes reported on Schedule C, you can file for free at the federal level and at a low cost at the state level
- Live chat and priority support are included in the Deluxe Edition upgrade at a low cost
- Deluxe Edition includes unlimited amended returns and audit assistance
Cons
- There is no download version available
- Basic free edition offers less robust support
You can do your own taxes online with FreeTaxUSA for a low cost. FreeTaxUSA was founded in 2001 by CPA firm TaxHawk, Inc. It is an online tax preparation service that works in your browser; no downloadable software is available.
Many users will pay nearly $22 for the complete tax preparation experience—$14.99 per state and $6.99 to upgrade to the Deluxe edition, which includes priority support, live chat, unlimited amended returns, and audit assistance. If you live in a state that does not require state returns, you can file for free.
Users of the free edition have limited support, which is understandable since you are not paying for individual services. In the Deluxe Edition, live chat with priority support is available from 10:00 a.m. until 9:00 p.m. Monday through Friday, eastern time.
There is a maximum refund guarantee and a 100% accuracy guarantee with FreeTaxUSA. In most cases, you won’t have to pay anything if you choose the free edition. You might find FreeTaxUSA to be the best option for your self-employed tax return if you’re on a budget.
What Is Tax Software For Small Business?
Tax software for small businesses helps you do your taxes online, on your desktop, or on your mobile device without paying a professional tax preparer. It may be possible for you to file self-employed taxes using a Schedule C or more complicated taxes for a partnership or corporation depending on the software you choose. Most personal tax preparation software focuses only on Form 1040, but tax software for small businesses can handle all types of businesses.
Using A Tax Preparer vs. Tax Software For Small Business
You definitely don’t have to do your own taxes if you feel overwhelmed by the thought of doing them or aren’t comfortable using computers. When this happens, you can hire a professional tax preparer, usually a CPA.
Tax professionals have a thorough understanding of tax laws and can offer money-saving advice. Tax preparers, however, use the same software you do when you do your taxes yourself, so there is no need to pay extra.
What Can Small Businesses Write Off?
In most cases, small businesses can write off expenses directly related to their operations. This includes equipment, labor, office supplies, and any services you need to run your business. You may even be able to deduct the cost of using your home office and vehicle for business purposes.
You may want to upgrade to a version of a tax program where you can access expert advice if you have serious doubts or questions about what your small business can write off.
Why Do Small Businesses Typically Get Audited?
There are several reasons why small businesses and business owners may be audited. These can include mismatches between your tax return and tax forms from other businesses, excessive expenses, business losses, and missing income. You may also have to deal with Uncle Sam’s extra attention if you underpay your taxes.
The IRS reported that 509,917 tax returns were audited for the 2020 tax year, a very small percentage of all returns.
How Much Does Tax Software For Small Businesses Usually Cost?
Tax software for small businesses ranges from free for federal returns to around $200 for more complex returns, plus $15 to $50 per state for state filings. There are some tax software for small businesses that include upgrades for additional support or features that can increase the cost compared to a basic return.
Here’s How We Picked The Best Tax Software For Small Business
We gathered information on 10 different tax software for small businesses for this review. A good user experience was provided by the winning tax preparation software programs, which included features that were crucial to preparing an accurate tax return in a timely manner. Other factors considered include cost, customer reviews, software popularity, and technical and tax support options.
