If you run a small business, preparing accurate annual tax returns is required by law. According to the National Society of Accountants, the average cost to prepare taxes for a small business ranges from around $184 per year for a Schedule C to around $825 per year for a corporation. While an accountant may offer peace of mind, you can often save quite a bit by doing your taxes yourself with small business accounting software.
Most tax software packages come with similar guarantees for accuracy and a maximum refund, but the user experience and features can vary widely. To select the best tax software for small business, we reviewed 10 different small business tax software options based on product features, ease of use, accuracy, and more. So, if you’re looking to do your own small business taxes, here are the best tax software offerings for small business.
The 5 Best Tax Software for Small Business of 2020
Best Overall: H&R Block
We chose H&R Block as best overall because it is a trusted name in tax preparation and its tax software for small businesses and business owners offers an excellent user experience and covers a wide range of tax situations. It offers a straightforward user interface that makes it easy to do your taxes accurately the first time.
Online version includes self-employment and small business income on your personal tax returns
Online version includes option to upgrade for on-demand assistance from a tax expert
Mobile app allows you to upload tax documents and track tax filing status
Business versions are priced higher than competitors
Partnership and corporation forms are only available in the desktop version
Can’t fully complete your taxes with the mobile app
H&R Block is a well-known brand in personal and business tax preparation. It was founded in 1955 and operates around 10,000 retail locations around the world. If you want to do your taxes on your own, you can choose between online and downloadable versions of H&R Block’s tax software.
In 2019, H&R Block prepared 23 million tax returns, and eight million people used H&R Block Online to do their taxes.
Windows desktop users get the most robust options, including corporation or partnership tax forms and employee-specific tax forms. This comes through H&R Block Premium & Business, which costs $79.95, as of October 2020. If you can get by with a Schedule C, you can file with Premium Online for $69.99 or Self-Employed Online for $104.99. Both require an extra $44.99 per state. If you have significant business expenses, you’ll need the higher-priced Self-Employed Online version.
Both the online and desktop versions do a good job of walking you through complex tax situations. If you think you’ll need extra help, you can upgrade your H&R Block Online account to Online Assist. It costs $159.99 for Premium plus $44.99 per state. For Self Employed it will cost you, $189.99 plus $49.99 per state. Online Assist includes on-demand help from tax experts including CPAs and enrolled agents.
Whether you file online or with the download version, the tax software comes with a maximum refund guarantee and 100% accuracy guarantee. The online version includes at-home audit support, while the desktop version includes in-office audit support. Whichever you choose, H&R Block covers most tax situations and is a good choice for many business owners, which is why it gets our best overall ranking.
Best for Partnerships and Corporations: TaxAct
TaxAct includes an option to complete tax filings for partnership and corporations completely online and is the only place you can prepare taxes for a partnership or S-Corporation with either a PC or Mac online, which is why it's our choice as best for partnerships and corporations.
Completely online federal and state taxes for partnerships, C-corporations, and S-corporations
Unlimited free support from tax specialists and technical support by phone and email
Choose between online and download versions
Discounts available for bundling personal and business taxes
You can only file taxes for one business with each copy you purchase
Limited options for audit support
State forms may not be available to file electronically
Downloadable version for Windows only
TaxAct is a large provider of online and downloadable tax software that has completed over 60 million tax returns since its inception in 1998.
Business owners who file online will pay $109.95 plus $54.95 per state. That includes sole proprietors who file with a Schedule C, partnerships that require Form 1065, corporations that file with Form 1120 or Form 1120S, and tax-exempt organizations that file Form 990.
The download version, available for Windows only, has the same $109.95 pricing with a slightly lower $49.95 per state charge. You can bundle personal and business for a total of $200.
The online experience isn’t quite as polished as some of the larger competitors, but it is generally intuitive and easy to follow. If you need assistance along the way, tax help and technical support are both available by phone. Customer service (without tax help) is also available by email.
TaxAct guarantees accuracy and the maximum possible refund but doesn’t include audit support. You can pay extra during your tax preparation process to add support with their third-party partner Protection Plus. Overall, TaxAct is an excellent choice for those who can handle things primarily on their own and perhaps the only choice for Mac and Linux users who want to do partnership or corporation taxes on their own, which is why it's our top tax software choice for partnerships and corporations.
Best for Self-Employed: TaxSlayer
We rank TaxSlayer as best for self-employed because of low pricing and a highly rated online experience that works well for self-employed tax filers who earn via a 1099 and need to complete a Schedule C.
Low pricing for federal tax return compared to larger competitors
Self-employed version includes access to a tax professional
Chat, email, and phone support available
All federal filings are free for active-duty military families
No download version available
No support for forms 1065, 1120, or 1120S for partnerships and corporations
TaxSlayer traces its roots in tax preparation to 1965. It started offering tax software to professional tax preparers in 1992 and launched its consumer-facing do-it-yourself tax software business in 1998. With TaxSlayer, you can do your taxes online or with the TaxSlayer mobile app.
The Self-Employed version costs $47 plus $39 per state. This version includes tax preparation for a 1040 Schedule C for those who operate as sole proprietors as well as LLCs. If you have a side hustle and get a 1099 tax form, for example, TaxSlayer Self-Employed would handle your needs. Active-duty military can file all federal tax forms for free and just pay the $39-per-state fee.
The Self-Employed includes access to a tax professional for help with all of your individual tax questions while completing your taxes. It also includes priority phone and email support as well as live chat for technical support. The Premium and Self-Employed versions include three years of IRS audit assistance.
TaxSlayer includes a 100% accuracy guarantee and a guaranteed maximum refund. While it doesn’t work for certain businesses that are required to complete more complex tax returns, it does a great job of handling the needs of many self-employed individuals, making it our top choice for those needing a Schedule C.
Best for At-Home Assistance From a Tax Pro: TurboTax
TurboTax is a market leader and includes an option to get on-demand support from a tax professional at home as well as robust technical support for its online and downloadable products, which is why it is our pick for best for at-home assistance from a tax pro.
Online version is best for self-employed business owners while Windows-only downloadable version covers all businesses
Online version has the ability to upgrade for live support from a CPA or enrolled agent
Excellent online interface that’s easy to use and navigate
More expensive than some competing tax software
1065, 1120, and 1120S forms only available for Windows-only desktop version
Little additional tax support without paying for TurboTax Live
TurboTax is one of the largest providers of DIY tax software and a good choice for many businesses. TurboTax is owned by Intuit, a California-based software company founded in 1983. TurboTax offers online, desktop, and mobile apps to prepare and file your taxes.
Most business owners using the online version of TurboTax would benefit from TurboTax Self-Employed, which includes personal and business income and expense tax forms. This version costs $120 plus $50 per state. Windows users can install TurboTax Home & Business, which includes federal and one state for $119.99. Additional states cost $44.99. This version is needed if you want to prepare taxes for a partnership or corporation.
If you want extra help and have questions about your taxes along the way, TurboTax Live includes access to a CPA or other tax expert on-demand, including evening and weekend hours. The TurboTax Live version of Self-Employed costs $200 plus $55 per state. This includes tax support along the way and a final review of your taxes before filing. All versions include regular access to product and technical support.
No matter which version you choose, TurboTax includes a 100% accuracy guarantee and a maximum refund guarantee. Customers are also protected by included audit support for three years for most returns. TurboTax is popular for a reason: It has one of the best user interfaces and great built-in guidance while completing your taxes. If it covers your situation but you think you may want extra help along the way, adding on TurboTax Live could be a smart decision.
Best for Low Cost: FreeTaxUSA
FreeTaxUSA's extremely low pricing starts at $0 for federal returns and $14.99 for state returns including self-employment income, making it our review's best for low cost.
Free federal filing and low-cost state filing for business taxes reported on Schedule C
Low-cost $6.99 upgrade to Deluxe Edition includes priority support and live chat
Amended returns are free and audit assistance is included in Deluxe Edition
No download version available
No support for partnership or corporation tax preparation
Less-robust support with the basic free edition
FreeTaxUSA is a low-cost solution for doing your own taxes online. FreeTaxUSA was launched in 2001 and is owned by CPA firm TaxHawk, Inc. FreeTaxUSA is an online tax preparation service that works in your web browser; there is no downloadable version available.
The federal version is free for all users in most cases, though many users will pay up to $22 for the full tax preparation experience. That’s broken down to a $14.99 fee per state and a $6.99 fee if you decide to upgrade to the Deluxe version. Deluxe includes priority support, live chat, unlimited amended returns, and audit assistance. If you live in a state where no tax return is required, you can file completely for free.
Support is limited for users of the free version, which makes sense, as you are not paying for anything. The live chat with priority support included in the Deluxe Edition is available from 9:00 a.m. to 9:00 p.m. Eastern, Monday through Saturday.
FreeTaxUSA includes a maximum refund guarantee and 100% accuracy guarantee. If you choose the free version, you have access to every federal tax form and won’t have to pay anything in some cases. If you are looking for a budget solution for your self-employed tax return, FreeTaxUSA is a good option.
What Is Tax Software for Small Business?
Tax software for small business is an online, desktop, or mobile option to complete your taxes on your own without paying a professional preparer. Depending on the software you choose, you may be able to file self-employed taxes with a Schedule C or more complex taxes for a partnership or corporation. While personal tax preparation software focuses only on Form 1040 in most cases, small business tax software has the ability to complete taxes for businesses of all sorts.
Tax Preparer vs. Tax Software for Small Business
If you are overwhelmed by the idea of doing your own taxes or don’t feel confident using computers, you definitely don’t have to do your taxes yourself. In those cases, you can hire a professional tax preparer, often a CPA, to do your taxes for you.
Tax professionals often have a detailed understanding of tax laws and can offer money-saving advice. However, behind the scenes, accountants use similar tax software to what you use when doing it yourself, so you certainly don’t have to pay extra for a professional preparer.
What Can a Small Business Write Off?
Small businesses can write off most expenses directly related to running the business. That can include equipment, labor, office supplies, and any services your business needs to operate. In some cases, it may even include a deduction for use of a home office or vehicle for business purposes.
If you have serious doubts or questions about what your small business can write off, it may be worthwhile to pay for an upgrade to a version of a tax program where you can access expert advice.
Why Do Small Businesses Get Audited?
Small businesses and business owners may be audited for several reasons. Those can include a mismatch of your tax return and tax forms reported by other businesses, excessive expenses, business losses, missing income, and high deductions. If you underpay your taxes, you could also wind up getting extra attention from Uncle Sam.
According to the IRS, there were 771, 095 tax returns audited for the 2019 tax year, which accounted for about 0.4% of tax returns.
What Does Small Business Tax Software Cost?
Small business tax software ranges in price from free for federal returns up to around $200 for more complex returns, plus an additional fee for state filings which can cost around $15 to $50 per state. Some tax software includes upgrades for additional support or features that can increase costs compared to basic returns.
How We Chose the Best Tax Software for Small Business
This review was based on information gathered on 10 different tax software options for small businesses. The winning software programs offered a good user experience including important features to prepare an accurate tax return in a timely fashion. Additional factors reviewed include cost, customer reviews, software popularity, and available options for both technical and tax support.
National Society of Accountants. "National Society of Accountants Reports on Average Tax Return Preparation Fees." Accessed June 26, 2020.
H&R Block. "Our Company."Accessed October 12, 2020.
Internal Revenue Service. "Compliance Presence." Accessed October 12, 2020.