Best Tax Software for Small Business Filing in 2021

Tax preparation may not be the most exciting element of running a small business — but it is essential. Companies have tons of options for preparing their tax returns each year, from online tax preparation tools to working with a dedicated tax professional.

Using tax software to prepare your own returns has become an increasingly popular option. There are a variety of tools available to serve businesses of all sizes and niches. So if you’re looking for a new tax preparation software for your small business, here’s a guide.

How Tax Software for Small Business Can Save You Money

Many tax software tools cost money to purchase or use. However, this small initial investment may actually save small business owners money in the long run. A single software purchase is generally less expensive than paying an accountant or tax professional to prepare and file your returns. There are even some free tax software programs to choose from. And those that do cost money generally let you get started for free. You just pay once you’re satisfied with your returns. So you can reach out with questions or decide to seek professional help only if it’s necessary.

Additionally, trying to prepare your own returns without a quality software may cost you more in tax payments or unrealized refunds. These tools have safeguards in place designed to help users maximize their returns. They can point out potential deductions or note potential mistakes in your returns that could leave you with less money in your pocket once your returns are filed. Some even provide a maximum refund guarantee. So you can be sure you’re getting the highest possible value from the software or recoup your investment.

Finally, there’s the time commitment involved in preparing your own taxes. Either you as the business owner or a member of your team need to fill out tax forms at least once per year. But a tax filing program can make the process much faster and easier. Even working with a tax professional can be time consuming, since you likely need to meet with them, answer questions, and wait for them to fill out your forms. Some tax programs allow you to complete your returns within 15 minutes. And that means money back in the pockets of small business owners.

Best Tax Software for Self Employed and Small Business

If you’re looking for the best tax software for self employed people or small business owners, read our list below. Whether looking for best user experience or the best free tax software, we think you’ll find this overview helpful. We hope you find the right tool to use next time you file your self employed or small business taxes.

1. Turbotax Live

Turbotax Live is a popular, accessible option for small businesses and freelancers alike. Created by Intuit, the tax software offers a huge array of options and features to suit all different types of businesses. For example, you can take photos of your tax documents to automatically add info to forms or jumpstart your returns using last year’s info.

TurboTax also allows you to determine just how involved you want to be with your own small business tax return. Some may choose to complete the entire thing on their own. There’s always a live professional on standby to chat if you have short questions. However, some may prefer to simply have their taxes completed for them, which is another option that TurboTax Live offers.

To have a professional complete your taxes, you can simply answer a few questions to connect with a relevant tax pro. Then you can upload documents like your W-2 with your phone and even video chat with your professional so they can learn about your tax situation. Whether you choose to file on your own or with professional assistance, TurboTax has professionals standing by to review returns before they’re submitted. This is to ensure accuracy and make sure you get your maximum refund.

TurboTax pricing also varies with these different options. The small business and freelance version of TurboTax Live starts at $90. But you can upgrade to an expert-approved guarantee for $170 or a full-service experience for $260. State taxes are extra. You can also go through the process for free and pay only when you are satisfied enough to file your returns.

2. H&R Block

H&R Block is a tax company with a long and respected history. And they provide tools for both individuals and businesses to file their own returns. H&R Block small business software includes guidance to maximize returns through deductions, corporate structures, and payroll and employer forms. They also provide guarantees for maximum refunds, customer satisfaction, accuracy, and no-surprise pricing.

To use this tool, you simply choose the H&R Block program that works best for your needs and download it. It then walks you through the forms, like adding your income, taxes paid, and itemized deductions. H&R Block makes it easy for you to upload your tax information by taking photos of relevant forms or using info from past returns. Even if in the past you’ve used other tools like TurboTax, H&R Block allows you to easily access that information to start your taxes for the current year. You can also chat live with a tax pro if you have questions throughout the process. This feature costs extra however.

Additionally, since H&R Block has tax offices throughout the country, users can get in-person support when needed. They provide audit support to customers at no extra cost. And you can have a tax pro look over your return before submitting it for an additional fee.

The small business version of H&R Block tax software starts at $79.95 for federal returns. State and local tax prep fees start at $19.99 and vary based on your needs. And you can pay extra for professional assistance through the process.

3. TaxSlayer

TaxSlayer offers a simple tax preparation software for individuals and self employed businesses. TaxSlayer is known for helping customers file their taxes and receive refunds quickly. It’s also easy to tailor the user interface to your needs. You can either file online or use a mobile device.

The platform lets you quickly upload information from W-2 for small business, Schedule C and 1099 forms. Then it walks you through the process of claiming deductions and credits relevant to your business. There’s also the option to chat with a tax pro to ask questions at any point throughout the process. Once you’re done, you can either print your returns or e-file them. The company also provides tax tips and resources tailored to small businesses and self employed individuals. You can even set calendar reminders for quarterly taxes and other relevant deadlines.

Other relevant features of this tax software include a mobile app to file right on your phone and the ability to choose how you want to receive any refunds right in the program. Like many other options, TaxSlayer also provides guarantees for accuracy and maximum refunds. There’s also a TaxSlayer Pro version specifically for accountants and tax professionals who work with clients.

TaxSlayer is one of the most affordable self employed tax software programs available at $47. That’s just for federal returns. So you’ll need to pay extra for state or local returns. But you can go through the process for free and only pay when it’s time to file. There’s also a refund calculator that you can use to get an idea of what you owe for free.

4. FreeTaxUSA

FreeTaxUSA is a free, online tax preparation option that offers a simple process for individuals, self employed workers, and small businesses. The tool isn’t just free for basic returns with a W-2. The small business version and options for those with investments, rental property income, homeownership, and K-1 income credits is also free.

To use FreeTaxUSA, you simply go to the website and choose the option that’s right for you. For example, a freelancer may choose the 1099 version, while a sole proprietor could start with the self employed version. You can then go through forms like those for freelance income, health insurance, and home office expenses.

The service is a verified e-file provider with the IRS. So you can be sure that your returns are submitted quickly and securely. They also provide expert guidance to help users get their maximum refund. And there’s a 100 percent accuracy guarantee. Though this tax software provides plenty of options for self employed individuals, sole proprietors, and freelancers, it’s not as fully featured as some other options. So businesses with especially complicated returns may opt for one that’s a bit more expensive or one with expert assistance.

Of course, the main draw of this online tax software over other options is the price. It is completely free to fill out and e-file federal returns. There is a fee for state returns. But it’s just $12.95. There is also a deluxe version available for $6.99. This tax software also provides live chat support, unlimited amendments, and audit assistance if needed. You can even pay for the state filing and/or the deluxe version with your tax refund if applicable.

5. TaxAct

TaxAct offers a variety of online tax software options for both individuals and businesses. This option is fairly customizable to the needs of each user. If you just need basic assistance, you can keep it fairly affordable. But if you need a fully featured user experience, they offer a ton of forms and assistance options as well.

Along with the customizable experience, TaxAct is known for being easy to use. You can quickly add data from current tax forms or past returns. You can even upload information from prior returns if you used other software programs in the past. Once you add your income from the past year, the software walks you through potential deductions and tax credits like vehicle expenses and home offices. You can even set bookmarks and alerts to help you navigate your returns or go back to certain forms later.

TaxAct also offers support from a tax expert when needed. Their Xpert Help option lets you get help through an online form or even schedule a phone call. This feature does come with an added fee. But you can request unlimited guidance through the process. Other interesting features include tax calculators, educational resources, and the ability to check the status of your return and refund quickly online.

TaxAct starts for free with basic federal returns. For business specific software products, the sole proprietor and self employed versions start at $64.95 for federal returns. And those for partnerships, C and S corporations are $109.95. You’ll pay extra for state returns. But they also offer bundle savings for those who need to file multiple returns.

6. Jackson Hewitt Online

Jackson Hewitt provides an online tax software that’s simple for small businesses and individuals. The online tax return portal is made for individuals and select small business users. There are plenty of forms and options for freelancers and sole proprietors. But those with more complicated tax returns may opt for a more robust tax software. However, Jackson Hewitt also has local offices throughout the country and offers professional assistance online. So those who want extra assistance with their tax returns can certainly get it through this company.

The tool provides a step-by-step process to help users fill out their returns quickly and accurately. And you can even track your returns, make payments, and track the progress of eligible refunds through the same portal. They also have live experts available to help online when needed. Or you could opt for the company’s Tax Pro From Home option. This is basically the same as hiring a tax expert to complete your returns for you. But you can upload forms and complete the entire process from home instead of visiting an office.

In addition to its tax filing services, Jackson Hewitt Online also allows users to save their tax documents in a secure online portal for up to three years. This makes it easy to go back and confirm data if needed. And you can easily use those forms on next year’s returns as well. Jackson Hewitt also uses encryption, account monitoring, and multi-factor authentication to protect users’ security.

Unlike many other tax filing tools, Jackson Hewitt Online offers one set price for both federal and state tax returns. You pay $49 for federal and unlimited state tax returns, or $25 if you just need to file at the federal level. The Tax Pro From Home option starts at $69 for simple returns. But small businesses or those with lots of tax credits or rental property income likely need the Premier option. That one costs $249 plus an added fee per state taxes.

7. Liberty Tax

Liberty Tax operates local tax offices in communities around the country for those who want to get their taxes done in person. But they also provide an online tax software for those who want to save money or prepare their own tax returns from home. Their online tax tool can help with various forms and issues, including the earned income tax credit, business tax rates, rental property income, and student loan interest.

Liberty Tax Online is known for fast tax preparation. Simple returns can even be completed within 15 minutes. You start by choosing the online tax software option that fits your situation. They have tools for everything from simple tax returns to those for self employed individuals and small businesses. Then you can complete the necessary forms online without downloading any complicated software programs.

In addition to the ease of use, Liberty Tax software offers support through various channels. You can chat online, call, or even visit a local office to get help from a tax professional. Of course, extra fees may be involved. But this option may be attractive to those with complicated tax returns. Additionally, Liberty Tax offers online tax courses to help individuals and business owners learn more about various tax issues. This may be especially helpful for beginners who plan to file their own tax return forms for years to come.

Liberty Tax offers various levels of pricing based on how complicated your tax returns are. The Premium product, which is best for small businesses and freelancers, is normally $89.95. But they’re offering it for just $44.95 this year. State forms are also available within each software product.

8. Credit Karma Tax

Credit Karma Tax offers an online tax filing tool that is completely free. It includes both state and federal returns. And the company even provides audit defense and max refund and accuracy guarantees. For those who are thinking about switching to Credit Karma from other tax software products like TurboTax or H&R Block, they let you easily import last year’s tax return from those tools.

The tax preparation portal is completely online. So you just need to sign up for an account and confirm your identity. Then the tool will walk you through the process of filling out your returns. You can even upload information from some basic tax forms like a W-2 just by taking a photo of them.

Since it’s a free product, Credit Karma Tax is mainly aimed at individuals. But it does include support for Schedule C tax filing and various business related forms. Businesses with especially complicated tax filing needs, or those who need to file prior year’s returns or prepare taxes in multiple states will need a more fully featured tax preparation tool.

Lots of other tax tools claim to offer free returns, but only for individuals or simple tax return filing. Or they may charge extra for state taxes or other features. Since Credit Karma is a financial company with tons of other products and services, it offers a tax software that is actually free, even for self employed and small business users. You just need to sign up for an account to access it.

9. eFile.com

eFile.com is an online service that specializes in electronic tax filing. The online platform offers a wide array of tax software programs for different purposes. So each user can tailor the experience to their specific needs. For example, there are W-2 forms, basic tax forms, 1040 forms, and 1099 forms. There are even options for filing tax extensions and other specialized services.

To use this tool, you simply select the most relevant option on the company’s website. Then you can start filling out the forms for free and even access expert guidance along the way. You can use the tax calculators online with no commitment. Then you simply need to sign up for an account to actually file — or pay for a premium account if necessary. Most business owners will likely need a premium account.

This online tax preparation tool also comes with features like premium support and a personal tax support page. You can even calculate your tax refund or bill completely free using the estimator tools available on the website. So business owners may be able to figure out their tax bill early but then wait until closer to the deadline to file to make budgeting easier.

The pricing structure for eFile.com varies depending on what features you need. There’s a free version for basic returns with a w-2. The deluxe edition supports 1099 forms. So it would be sufficient for freelancers and contractors at $24.95. And the premium version, which supports business income and all tax forms and schedules, costs $34.95. This tool also lets you file unlimited state returns for one set price. There is no per state fee like there is with other tools like TurboTax and H&R Block. Additionally, eFile.com offers a price beating program. So if you can get similar returns filed for a lower price, let them know and they’ll beat the rate by 10 percent.

10. ProConnect Tax

ProConnect Tax is not built for small business owners that want to complete their own simple returns. Instead, it has all the professional features needed for tax professionals to manage returns for a variety of clients. This makes it an ideal choice for independent accountants, bookkeepers, and tax preparers.

From Intuit QuickBooks, ProConnect Tax includes more than 5,600 forms and over 20,000 calculations. It also includes diagnostic tools to catch errors and maximize returns. This can help tax professionals keep clients happy and improve their workflow and output without having to worry about small mistakes.

It also includes productivity features like the ability to automatically input data from client forms into their returns. So you can save time and reduce small clerical errors. The tool even includes secure cloud backup and a cloud based portal. So you can easily request documents from clients and share return information with them from anywhere.

Pricing is calculated based on the number of returns you file. So small accountants don’t need to spend big accountant money to enjoy the same functionality. It starts at $56.67 for personal returns and $70.78 for business returns. And those prices go down if you file ten or more. You can also enjoy a free trial and only pay once you submit returns.

Tax Preparer vs. Tax Software: What’s the Difference?

Filing a tax return each year is non-negotiable. But choosing how to file is up to each business. The first decision you’ll likely need to make is between a professional tax preparer and tax software.

Whether TurboTax, H&R Block or another tool, tax software involves preparing your tax return on your own. The process is usually relatively simple. And each tool should walk you through the process of claiming your income and deductions. However, this does require a small time commitment from you or a member of your team. And though the process is usually pretty self-explanatory, some tax knowledge may be beneficial for those with complicated returns. This is often the more economical option, especially for small businesses with simple taxes.

Using a tax preparer means relying on a person outside your organization to prepare and file your tax return for you. This generally costs a bit more than tax software. And you’ll need to drop off or submit all of your tax documents to them. However, a professional may have more knowledge about complex tax issues related to your returns. So they could potentially help you minimize your taxable income and reduce your annual bill by providing guidance. For example, they may let you know that you could fit into a lower tax bracket by contributing more to a retirement account. This option may also save time for those with especially complicated taxes.

What does tax software for small business cost?

Prices for small business tax software vary. However, it usually falls between $50 and $100. You’ll pay more for advanced features like expert assistance and state tax return filing. But programs designed for simple small business or self employed taxes generally fall on the lower end of the cost spectrum. A few products, like Credit Karma Tax and FreeTaxUSA, even offer free tax filing options for individuals and self employed filers.

How do you choose the best tax software for small business?

To choose the best tax software for your small business, start by making a list of “must have” features. For example, if your business has complicated tax returns, you may need a tax filing software with expert support. If you are self employed and claim benefits from military service, you need a tool that includes relevant forms for those benefits. Popular options like H&R Block and TurboTax offer a wide array of features. But those on a tight budget might prefer a free option like FreeTaxUSA or Credit Karma Tax.

Which tax software is best for tax preparers?

If you’re a tax preparation professional, you need a software program that offers a huge array of features to suit various client needs. ProConnect Tax from Intuit Quickbooks is made specifically for tax preparers. So the tool offers bulk pricing for filing returns and has the array of features you need to suit both individuals and businesses. TaxSlayer also offers TaxSlayer Pro which comes with a variety of features and pricing models for tax professionals. Some small tax companies may be able to get by with a simpler tool if all their clients have the same basic needs. But a professional option is generally more beneficial.

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This article, "Best Tax Software for Small Business Filing in 2021" was first published on Small Business Trends