The Best Tax Software for the Small Business Owner

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    Navigating tax obligations is crucial for small business owners. Finding the right tax software can streamline this process, ensuring accurate compliance and saving valuable time and resources. With many options available, selecting the best tax software tailored to the unique needs of small businesses becomes pivotal in optimizing financial management.

    What is tax software, and how does it work?

    Before we delve into the details of each software, let’s first understand what tax software is. Tax software is a digital tool designed to assist businesses in managing and filing their taxes. It automates tax calculations, ensures compliance with tax laws, and helps identify potential deductions and credits. The goal is to simplify the complex tax preparation process, reduce the risk of errors, and save time.

    How Tax Software Can Help Small Businesses?

    Tax software can be a game-changer for small businesses. It lets you input your business income and deductions, ensuring you take advantage of different tax deductions or credits to minimize your tax liability. It also allows you to pay any taxes owed or receive your tax refund electronically, which can be incredibly helpful, especially for businesses without dedicated accounting teams.

    Moreover, tax software can help small businesses complete their tax returns quickly, providing step-by-step guidance and professional tax help. Even if you need more extensive tax knowledge, the software can guide you through accurately completing your tax filing.

    Our Selection Criteria for the Best Tax Software

    Choosing the best tax software requires an evaluation of the core functionalities, key features, usability, expert support, software integrations, and pricing. All the solutions listed in this article meet these criteria, and we’ve selected them after a thorough analysis.

    >>Recommended Reading: The Best Small Business Accounting Software: A Comprehensive Guide<<

    Features and Functionality

    Choosing tax software for your business requires a thorough evaluation of its capabilities. Look for software that encompasses a broad spectrum of tax scenarios, supports various tax types (income, sales, payroll), and offers comprehensive tools for calculations, deductions, and credits. Ensure it provides e-filing options and simplifies complex tax processes for a seamless experience.

    User Interface and Ease of Use

    An intuitive interface is vital for efficient tax preparation. Seek software with a user-friendly design, easy navigation, customizable dashboards, and clear instructions. An interface that minimizes the learning curve can save time and reduce errors, enhancing overall productivity.

    Integration and Compatibility

    Select software that seamlessly integrates with your existing systems, such as accounting and document management tools. Compatibility across different devices and operating systems ensures flexibility and convenience in accessing and utilizing the software’s functionalities.

    Security and Compliance

    Given the sensitivity of tax-related data, prioritize software that prioritizes robust security measures. Look for encryption protocols, secure data storage options, and compliance with industry standards and regulations to safeguard client information.

    Customer Support and Training

    A robust support system is crucial. Opt for software providers that offer reliable customer support, including access to tutorials, training materials, webinars, and responsive assistance. A supportive network can address issues promptly, ensuring a smooth workflow.

    Scalability and Customization

    Consider the software’s scalability to accommodate your business growth. Additionally, opt for platforms that allow customization to tailor workflows according to your specific requirements and client needs.

    Cost and Value

    Evaluate the pricing structure of the software against its features and benefits to ensure you’re getting the best value for your investment. Whether it’s a subscription model, per return pricing, or a one-time purchase, assess how the cost aligns with the software’s capabilities.

    Reviews and Reputation

    Prioritize software with positive reviews and recommendations from fellow tax professionals. Understanding user experiences, reliability, and performance can provide valuable insights into the software’s suitability for your business.

    Updates and Maintenance

    Regular updates are vital to ensure compliance with evolving tax laws and regulations. Choose software providers committed to timely updates and maintenance, ensuring your software remains current and compliant.

    Trial and Demo

    Before committing, take advantage of trial periods, or demos software providers offer. Testing the software’s functionality, interface, and compatibility with your workflow will help you decide its suitability for your business.

    The Best Tax Software Options in 2024

    Overviews Of The Best Business Tax Preparation Software:

    Here, we present a comprehensive review of the top tax software options for small businesses in 2024.

    1. TurboTax Premium

    • Suitable for: Comprehensive customer service and ease of use
    • Federal Filing Fee: Varies
    • State Filing Fee: Varies
    • Live Support: Available

    TurboTax by Intuit is popular among small business owners thanks to its excellent customer service and user-friendly interface. It provides an IRS audit risk assessment, a step-by-step navigation guide, and multiple ways to contact customer service. However, TurboTax’s attempts to upsell you on features such as IRS audit representation and identity theft insurance may be a downside.

    Professional Plans:


    TurboTax typically offers tiered plans based on the complexity of tax situations and the level of service required. While specific offerings might evolve, here’s a general breakdown of tiered plans you might find for TurboTax Premium:

    1. TurboTax Free Edition

    • Designed for simple tax returns (e.g., W-2 income, limited deductions)
    • Typically accessible for federal filing, state filing might have a fee
    • Basic guidance and support

    2. TurboTax Deluxe

    • Suitable for homeowners, people claiming deductions, and those with charitable donations
    • Covers mortgage interest deductions, property tax deductions, and more
    • Additional guidance for maximizing deductions and credits

    3. TurboTax Premier

    • Geared towards investors and rental property owners
    • Handles investment and rental property income, gains, and deductions
    • Helps with reporting stock sales, rental property income, and royalties

    4. TurboTax Self-Employed

    • Catered to freelancers, contractors, and small business owners
    • Supports business-related deductions, tracks expenses, and calculates quarterly taxes
    • It helps maximize deductions and simplifies business-specific tax forms

    Pros

    • A simple, easy-to-use questionnaire helps identify which documents you need for your small business
    • Excellent customer service with short wait times

    Cons

    • More expensive than comparable products
    • It may try to upsell you throughout the process

    2. TaxSlayer Self-Employed

    • Suitable for: Value, ease of use, availability of expert help
    • Federal Filing Fee: Varies
    • State Filing Fee: Varies
    • Live Support: Available

    TaxSlayer Self-Employed is our top choice overall for small business filers. It provides an easy-to-use platform for filing taxes and can handle complicated returns at a competitive price. One of its biggest draws is that you can electronically file your federal and state tax returns for less than $100.

    Pros

    • Price includes expert tax help to answer any questions you may have
    • Offers guided experience or option of navigating directly to tax forms

    Cons

    • TaxSlayer tax experts have limited training

    Professional Plans:

    Classic

    • Basic plan for simple tax returns, including W-2 income and limited deductions.
    • It is typically suited for individuals with uncomplicated tax situations.
    • It may not include features specific to self-employment.

    Premium

    • Often suitable for homeowners, investors, and those with more complex deductions.
    • It may include additional support for certain self-employment-related deductions and expenses.
    • Likely to provide guidance on various forms, such as Schedule C for self-employment income.
      Self-Employed
    • It is tailored explicitly for self-employed individuals, freelancers, and small business owners.
    • It will likely offer comprehensive support for business-related deductions, expenses, and income.
    • You must provide specialized guidance on Schedule C and other self-employment-specific tax forms.

    Additional or Add-On Services

    • TaxSlayer might also offer additional services or features as add-ons, such as live support, audit assistance, or state tax filing.

    3. H&R Block Self-Employed

    • Suitable for: Ease of use, availability of expert help
    • Federal Filing Fee: Varies
    • State Filing Fee: Varies
    • Live Support: Available

    H&R Block Self-Employed is an excellent product if you’re looking for an easy-to-use platform at a lower cost. Its platform provides simple navigation tools to ensure you can quickly move around the program. If you need extra help, you can work with a tax expert online or in person—for an additional fee.

    Pros

    • H&R Block offers a user-friendly online tax software platform
    • For an additional fee, you can work with a tax professional if you need more help.

    Cons

    • H&R Block is pricier than some competitors

    4. Cash App Taxes

    • Suitable for: Completely free option for all types of tax situations and forms
    • Federal Filing Fee: Free
    • State Filing Fee: Free
    • Live Support: Limited support through email or chat

    Cash App Taxes is the right choice if you seek a free option for all tax situations and forms. It doesn’t try to upsell you, so you can rest assured the program is entirely free. However, it doesn’t come with the bells and whistles you’ll get with other tax software providers.

    Pros

    • Completely free
    • It won’t try to upsell you throughout the process like its competitors

    Cons

    • Cash App Taxes doesn’t provide phone support options.

    Cash App Taxes (powered by Credit Karma Tax) offers a comprehensive free tax filing option that covers various tax situations.

    Cash App Taxes Features:

    1. Free Filing Option

    • It Generally provides free tax filing for various tax scenarios, including simple and moderately complex returns.
    • Covers income sources like W-2 wages, interest income, and some deductions.

    2. Comprehensive Support

    • It aimed to support multiple tax forms and situations, catering to many taxpayers.
    • It could include support for self-employment income, certain investment income, and deductions.

    3. No Tiered Plans

    • Unlike traditional tax software, Cash App Taxes (via Credit Karma Tax) didn’t traditionally offer tiered plans with different service levels.

    4. Partnership with Credit Karma Tax

    • Tax preparation and filing services were facilitated through Credit Karma Tax, which is integrated into the Cash App ecosystem.

    5. FreeTaxUSA

    • Suitable for: Low-cost tax software option
    • Federal Filing Fee: Free
    • State Filing Fee: $15
    • Live Support: Available with the Deluxe version

    FreeTaxUSA is a budget-friendly tax software option. Your federal returns are free (no matter how complicated your tax situation is), but you must pay to file state tax returns. It offers options for importing previous tax returns and filing an amended tax return.

    Pros

    • Low cost
    • Offers options for importing previous tax returns

    Cons

    • Charges for state tax returns

    Professional Plans

    FreeTaxUSA Features:

    1. Free Federal Filing

    • Generally offers free federal filing for various tax scenarios, including simple and moderately complex returns.
    • Covers a wide array of tax forms and situations, including W-2 income, deductions, and credits.

    2. State Filing (Additional Cost)

    • Requires a separate fee for state tax filing, although federal filing is often free.
    • State filing prices are typically lower than many other tax software options.

    3. Additional Services

    • FreeTaxUSA might offer additional services or features at a nominal cost, such as priority support, amended returns, or extra support for complex tax situations.

    4. No Tiered Packages

    • Unlike some tax software providers, FreeTaxUSA usually doesn’t have tiered packages with different service levels.

    6. TaxAct

    • Suitable for: Accuracy guarantee
    • Federal Filing Fee: Varies
    • State Filing Fee: Varies
    • Live Support: Available with Xpert Assist addition

    TaxAct’s online tax filing software is straightforward and more affordable than top competitors. Its primary distinction is its $100,000 Accuracy Guarantee and Maximum Refund Guarantee. However, it doesn’t have the feature set of other online tax software options.

    Pros

    • Offers $100,000 Accuracy Guarantee and Maximum Refund Guarantee
    • More affordable than top competitors

    Cons

    • Lacks some features offered by other tax software options

    Professional Plans
    TaxAct typically offers tiered packages for various tax filing needs, providing different service levels and features. As of my last update, here’s a general breakdown of TaxAct’s tiered packages:

    1. Free

    • Features: Basic filing for simple tax returns, including W-2 income and standard deductions.
    • Federal Filing: Usually free for federal filing; state filing might have an additional cost.

    2. Deluxe+

    • Features: Suited for homeowners, those with dependents, itemized deductions, or credits.
    • Support: Includes more robust support for various deductions and credits.
    • Price: Usually at a moderate cost for both federal and state filing.

    3. Premier+

    • Features: Geared towards investors and rental property owners.
    • Coverage: Supports investment income reporting, stock sales, rental property income, and related deductions.
    • Pricing: Typically at a slightly higher cost compared to Deluxe+ for both federal and state filing.

    4. Self-Employed+

    • Features: Tailored for freelancers, independent contractors, and small business owners.
    • Support: Comprehensive assistance for business-related deductions, expenses, and income.
    • Price: Usually at a higher tier in terms of cost for federal and state filing due to specialized features.

    5. Additional Services

    • TaxAct might offer additional services or features as add-ons, such as audit defense, priority support, or professional tax help.

    7. Jackson Hewitt Online

    • Suitable for: Comprehensive support and ease of use
    • Federal Filing Fee: Varies
    • State Filing Fee: Varies
    • Live Support: Available

    Jackson Hewitt Online is known for its comprehensive support and user-friendly interface, making it an attractive choice for various tax filers. It provides multiple options for live help, ensuring users can get assistance when needed. However, pricing might vary based on the complexity of tax situations.

    Service Overview:

    1. Jackson Hewitt Free Edition
      • Designed for simple tax returns (e.g., W-2 income, basic deductions)
      • Often free for federal filing, state filing might have a fee
      • Essential guidance and support were provided.
    2. Jackson Hewitt Deluxe
      • Suited for homeowners, individuals with deductions, and investments
      • Covers mortgage interest deductions, itemized deductions, etc.
      • Additional support for maximizing deductions and credits.
    3. Jackson Hewitt Premier
      • Geared towards investors and rental property owners
      • Handles investment and rental property income, gains, deductions
      • Helps report stock sales, rental property income, and royalties.

    Pros

    • Comprehensive support for various tax scenarios
    • User-friendly interface with multiple support options

    Cons

    • Pricing may vary depending on the complexity of tax situations
    • Limited free options compared to some competitors

    Jackson Hewitt Online caters to a diverse range of tax situations with its tiered plans, offering a user-friendly experience and various support options. However, users seeking entirely cost-free filing might need more options within its service.

    8. Liberty Tax Online

    • Suitable for: Personalized support and diverse tax needs
    • Federal Filing Fee: Varies
    • State Filing Fee: Varies
    • Live Support: Available

    Liberty Tax Online stands out for its personalized support and catering to diverse tax situations. It offers various options for live help, ensuring users have assistance throughout the filing process. However, pricing might vary based on the complexity of tax scenarios.

    Service Overview:

    1. Liberty Tax Basic
      • Designed for simple tax returns (e.g., W-2 income, standard deductions)
      • Often free for federal filing, state filing might have a fee
      • Essential guidance and support were provided.
    2. Liberty Tax Deluxe
      • Suitable for homeowners, individuals with deductions, and investments
      • Covers mortgage interest deductions, itemized deductions, etc.
      • Additional support to optimize deductions and credits.
    3. Liberty Tax Premium
      • Geared towards investors and rental property owners
      • Handles investment and rental property income, gains, deductions
      • Assists in reporting stock sales, rental property income, and royalties.

    Pros

    • Personalized support for diverse tax situations
    • Multiple live support options are available

    Cons

    • Pricing may vary depending on the complexity of tax situations
    • Limited free options compared to some competitors

    Liberty Tax Online offers a range of tiered plans to accommodate various tax needs, providing personalized support and a user-friendly experience. However, users looking for entirely cost-free filing options might need more choices within their service.

    9. eSmart Tax

    • Suitable for: Simple and affordable tax filing
    • Federal Filing Fee: Varies
    • State Filing Fee: Varies
    • Live Support: Limited

    eSmart Tax is known for its simplicity and affordability in tax filing solutions. It caters to straightforward tax situations and typically offers competitive pricing. However, users might need more live support compared to other platforms.

    Service Overview:

    1. eSmart Free Edition
      • Designed for basic tax returns (e.g., W-2 income, standard deductions)
      • Often free for federal filing, state filing might have a fee
      • Essential guidance and support were provided.
    2. eSmart Deluxe
      • Suited for homeowners, individuals with deductions, and investments
      • Covers mortgage interest deductions, itemized deductions, etc.
      • Additional guidance to maximize deductions and credits.
    3. eSmart Premium
      • Geared towards investors and rental property owners
      • Manages investment and rental property income, gains, deductions
      • Assists in reporting stock sales, rental property income, and royalties.

    Pros

    • Cost-effective options for various tax scenarios
    • Simple and easy-to-use interface

    Cons

    • Limited live support may not be sufficient for complex queries
    • Might not cover intricate tax situations comprehensively

    eSmart Tax offers straightforward and cost-effective options for tax filing, suitable for individuals with uncomplicated tax needs. However, users with more complex tax scenarios might find its features limited.

    10. Wave Financial

    • Suitable for Small business accounting and basic tax needs
    • Pricing: Free (basic features); paid add-ons available
    • Live Support: Limited

    Wave Financial offers a comprehensive suite of tools for small business owners, including accounting, invoicing, and basic tax support. Its free version provides essential functionalities, while additional paid add-ons cater to more specific business needs. However, live support options might be limited compared to some paid software.

    Service Overview:

    1. Wave Free Accounting & Invoicing
      • Designed for small business accounting needs
      • Basic functionalities for bookkeeping, invoicing, and expense tracking
      • Offers essential support for tax preparation and reporting
    2. Wave Paid Add-Ons
      • Additional paid features available for payroll, payments, and advanced accounting needs
      • Can include enhanced tax support or integrations with tax preparation software

    Pros

    • Free basic accounting and invoicing functionalities
    • Tailored for small businesses with essential tax support

    Cons

    • Limited live support options
    • Advanced tax support might require paid add-ons or third-party integrations.

    What is the Best Free Tax Software for Your Tax Filing Process?

    The best free tax software can vary based on your tax situation. Some popular options known for their free versions include TurboTax Free Edition, TaxAct Free Edition, and Credit Karma Tax. Each has its strengths for different tax scenarios, so consider your specific needs.

    Does Small Business Tax Software Work out Business Expenses, Income Taxes, Self Employment Tax, and Federal Income Tax?

    Small business tax software typically handles various aspects of tax preparation, including:

    1. Business Expenses: It assists in tracking and categorizing expenses relevant to your business, ensuring you can claim eligible deductions.
    2. Income Taxes: It helps calculate and report your business income, considering revenue, expenses, and deductions to determine taxable income.
    3. Self-Employment Tax: It often includes tools to calculate and report self-employment taxes, which cover Social Security and Medicare taxes for self-employed individuals.
    4. Federal Income Tax guides in preparing and filing your federal income tax return, ensuring compliance with IRS regulations and deductions specific to your business.

    Different software may offer varying levels of support and features for these aspects, so choosing one that caters to your business’s specific needs and tax requirements is essential.

    Which tax software programs offer the best support for tax payments, filing taxes, tax advice, and audit support guarantees?

    Several tax software programs offer robust support for tax payments, filing, advice, and audit assistance. Here are a few known for their comprehensive support:

    1. TurboTax: Known for its extensive support, TurboTax offers guidance throughout the tax filing process, provides tax advice, and offers additional services like Audit Defense for extra protection in case of an IRS audit.
    2. H&R Block: Offers in-person support at physical locations, online assistance, tax advice, and provides options for tax payment plans. It also provides an “Audit Support” feature to assist users during IRS audits.
    3. TaxAct: Provides tax filing support tools for tax advice and offers an optional “Audit Defense” add-on for extra assistance during IRS audits.
    4. Jackson Hewitt: Offers tax advice support for tax payments and provides a service called “Worry-Free Guarantee,” which includes Audit Assistance if you receive an audit notice from the IRS.
    5. Credit Karma Tax: Known for offering free federal and state filing, it provides support throughout the filing process and includes Audit Defense at no extra cost for eligible users.

    Each software program has unique strengths in providing tax payment support, tax filing assistance, tax advice, and audit support. The specific features and level of support may vary based on the software version or plan you choose, so it’s essential to review each program’s offerings in detail to find the best fit for your needs.

    The Best Tax Software Programs for Small Business Owners in 2024 Bottom Line

    Managing your taxes can be challenging as a small business owner, especially considering the complex tax laws and the need to maximize your deductions while minimizing your tax liability. Thankfully, you can lean on tax software to simplify the process. This article provides a comprehensive guide to the best tax software for small business owners in 2024.

    >>Recommended Reading: The Ultimate Guide to Invoice Software for Small Businesses<<

    Frequently Asked Questions