Tax Software for Small Businesses: Top Tools and Costs

Tax Software for Small Businesses: Top Tools and Costs

Tax Software for Small Businesses: Top Tools and Costs

  • Doing your taxes is an important part of being a small business owner, but complicated laws and tax filing regulations can make it a time consuming process.
  • Many small businesses turn to tax software to help automate tax processes and help them find the best deductions for their small business.
  • Learn more about tax software and how to find the right one for your business below. 

What is Tax Software for Small Business?

Tax software for small business is any solution that a small business owner or account manager can use to prepare their own taxes without using a tax preparer or tax professional. Some solutions are cloud-based, meaning they’re available online from any device, and some are desktop-based, which means they live on your computer. In general, a tax software solution will help you e-file your business and personal taxes with the IRS.

Small business tax software solutions will walk filers through the filing process step-by-step, helping determine federal tax and state tax liability, as well as which tax return to file. This can be particularly helpful for taxpayers trying to figure out simpler tax returns, like income tax returns, self-employment tax, state returns, and federal tax filings. For these simpler tax situations, tax preparation software can help find most tax deductions for small businesses. 

Many tax software providers offer a free version as well, which can be great for small businesses and sole proprietors who are just starting out. Some tax software solutions also offer a maximum refund guarantee, even with the free option, which can help small businesses feel a sense of security when filing with the IRS. 

Top 5 Best Tax Software Solutions for Small Business of 2023

Here are our top picks for tax filing software for small business

1. TaxAct

TaxAct provides tax prep services for small businesses of all types, including partnerships, S corps, C corps, and non profit organizations. They also have an inexpensive version for sole proprietors. 

2. Intuit TurboTax 

TurboTax allows you to file your taxes online yourself or hire an expert to do it. While TurboTax Live offers three services for individual filers, TurboTax has two products for business owners: TurboTax Home & Business for sole proprietors and contractors who receive a Form 1099 for $119, and TurboTax Business for corporations, partnerships, and LLCs, which starts at $170 for federal filing and $55 per additional state filing. TurboTax integrates directly with popular accounting software Intuit QuickBooks, which makes it easy to get the previous year’s business income and expenses directly from your books. While they previously offered  their own tax filing system, Credit Karma Tax is partnering with TurboTax to offer tax filing for small businesses. 

3. Cash App Taxes

Cash App Taxes boasts a 100% free tax filing with a maximum refund guarantee and free audit defense. While you have to download the mobile app to your phone and create an account to use the service, you can file your taxes from a computer after you’ve registered. The service is best for individual tax filers, but you can report business income and losses from a sole proprietorship with Cash App Taxes.

4. FreeTaxUSA

FreeTaxUSA allows small business owners to prepare and e-file federal taxes for free, although each state tax filing costs $14.99 after that. The service is best for freelancers, sole props, and contractors, although S corporations and partnerships can use their Schedule K-1 forms to file as well. 

5. TaxSlayer Pro

With their cloud-based software and mobile app (TaxesToGo), TaxSlayer Pro allows small businesses to prepare their taxes conveniently. While they don’t offer a fully free version for small businesses, their services range from $1,295 to $1,495 and offer free unlimited e-filing for federal and state taxes. They also allow for multiple users to access the program and integrate with banks online to upload tax documents securely. 

Tax Preparer vs. Tax Software

If you want to file your own taxes to save money, tax software is probably your best bet. With free tax software available, tax software companies can help with your federal tax returns, state tax returns, and using online tax forms to file. If you’re just planning to take the standard deduction and use a Schedule C form to file your business taxes, this can be a great option.

As we stated previously, tax preparation software is better for simpler tax situations, whereas more complex tax situations may be better suited to a tax preparer. A full-service tax pro, like a CPA or other accountant, can help with more complicated tax situations. Getting tax advice from a tax expert can help you be sure you’re itemizing deductions properly and getting the top tax refund for your business expenses. If you have other income, like rental income or investment income, a tax pro can help you figure out how best to file to get the best return.  

There are companies that will provide hands-on tax preparation services, such as H&R Block or Jackson Hewitt. They provide tax support services during tax season, and individuals and small businesses rely on them for federal filing and state filing. However, for more help throughout the full year, 

Some of the differences and similarities between using tax filing software and an accountant or other professional for tax prep include:

Tax SoftwareTax Preparer
In-person helpX
Customer supportXX
DIY filing optionsX
Free tax filingX
Accuracy guaranteeXX

Bottom Line: How to Choose a Tax Software Program That Best Fits Your Business

Finding the best tax software for small business comes down to a few important points. You want to make sure you find a software that has a user friendly interface and is known for a good user experience. Taxes can be complicated enough without a software service making you more confused.

It’s also important to consider cost when finding a tax software solution. While a free version may seem like a great idea, if you have more complex tax issues, like rental property or unemployment income, you may want to consider a deluxe or paid option. And, again, the bigger your business and the more complicated your tax returns get, especially with more itemized deductions, you may want to consider a tax professional to make sure you get the best return.

No matter what tax service you choose, you need to make sure that you have your tax documents from the last year in order. It’s a good idea to keep your taxes in mind throughout the year, and track your business income and expenses at least every month. That way, you’re not rushing at tax time to figure out where you spent your money and what kinds of deductions you can get. 
You can use Nav to help you find the right tax software for your business, learn how to establish business credit, and find financing like small business loans and business credit cards.

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