Best Tax Software for Small Business 2023
Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor, and CPA with 25 years of experience. He brings his expertise to Fit Small Business’s accounting content.
Danielle is a writer for the Finance division of Fit Small Business. She has owned a bookkeeping and payroll service that specializes in small business, for over twenty years.
Small business owners can prepare their own tax returns for a fraction of the cost of tax professionals as most certified public accountants (CPAs) charge a minimum of $500 for a business return. Below, we’ve identified the best tax software for small businesses based on price, features, and ease of use.
- TaxAct: Best overall small business tax software to prepare corporate and partnership returns
- TurboTax: Best small business tax software for freelancers and self-employed
- H&R Block: Best inexpensive desktop software for corporate and partnership returns
- Block Advisors: Best for having your corporate or partnership business return completed by a tax professional for a low price
- TaxSlayer: Best inexpensive tax software for freelancers with advice from tax pros
- FreeTaxUSA: Best free small business tax software for freelancers
- BoomTax: Best cloud software for filing year-end information returns like W-2s, 1099s, and 1095s
Best Tax Software for Small Businesses at a Glance
DIY Return With Schedule C–Federal | DIY Return With Schedule C–State | Assisted Federal | Assisted State | Full Service Federal | Full Service State | |
|---|---|---|---|---|---|---|
 | $64.95 | $44.95 | Included | 54.95 | N/A | N/A |
 | $129 | $59 | $219 | $64 | $409 | $64 |
 | $94.95 | Includes 1 State | N/A | N/A | N/A | N/A |
 | $85 | $37 | N/A | N/A | $220 | N/A |
 | $49.95 | $39.95 | Included | Included | N/A | N/A |
 | $0 | $14.99 | $7.99 | $7.99 | N/A | N/A |
 | N/A | N/A | N/A | N/A | N/A | N/A |
Audit Guidance and/or Defense | Schedule C Business Income & Loss | Data Import | Deduction Finder | Guidance From a Tax Pro | S Corporation (S-corp) & Partnership Returns | |
|---|---|---|---|---|---|---|
| ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| ✓ | ✓ | ✓ | N/A | N/A | ✓ |
| ✓ | ✓ | N/A | N/A | ✓ | ✓ |
| ✓ | ✓ | N/A | N/A | ✓ | N/A |
| ✓ | ✓ | N/A | N/A | N/A | N/A |
| N/A | N/A | ✓ | N/A | N/A | N/A |
TaxAct: Best Overall Small Business Tax Software
TaxAct is our overall best tax software for small business owners because you can prepare both individual returns and business returns using its online program. It’s the only software reviewed that offers online preparation of both individual returns (Form 1040) and business returns (Form 1120, Form 1120S, and Form 1065).
The biggest drawback to the online program is that the price includes only one return, whereas desktop programs can be used for multiple returns. The typical C corporation (C-corp), S corporation (S-corp), or partnership owner will spend $264.80 to prepare and file both their individual and business returns using TaxAct
Pros
- Online preparation of Forms 1040, 1120, 1120S, and 1065
- Import income and expense accounts from any software as a comma-separated values (CSV) file
- Save time by importing stock transactions
Cons
- Price includes only one return, so it becomes expensive if you have multiple businesses
- No special cryptocurrency support
- No tax pro assistance for business returns
Pricing
- $64.95 per Federal Form 1040 individual return with Schedule C
- $44.95 per state individual return
- $124.95 per Federal Form 1120, 1120S, or 1065 business returns
- $54.95 per state business return
TaxAct Overview
TurboTax: Best Small Business Tax Software for Freelancers & Self-employed
TurboTax Live is our choice for self-employed and freelancers because of its year-round access to tax professionals who are either enrolled agents (EAs), CPAs, or lawyers. These tax pros aren’t only available to answer questions but also will do a line-by-line review of your tax return. TurboTax Live Self-Employed is $119 plus $54 per state. Unfortunately, owners of corporations or partnerships will have to separately purchase TurboTax Home & Business desktop software, which doesn’t include consultation with a tax pro.
Pros
- Year-round access to tax pros
- All tax pros are either enrolled agents (EAs), CPAs, or lawyers
- Import cryptocurrency transactions
Cons
- Owners of C-corps, S-corps, and partnerships must purchase Home & Business desktop software in addition to individual tax software
- Additional state returns cost $55 each
- Expensive compared to programs without access to tax pros
Pricing
TurboTax Self-Employed: best for self-employed and freelancers
- $129 federal Form 1040 individual return with Schedule C
- $59 state individual returns
- Total cost of $188
TurboTax Business (desktop): best for C-corps, S-corps, and partnerships
- $190 includes five federal business returns
- $55 per state business return
Owners of C-corps, S-corps, or partnerships will need to purchase both programs for a total cost of $338.
TurboTax Overview
H&R Block: Best Inexpensive Desktop Tax Software for Corporate & Partnership Returns
With H&R Block desktop software, you can prepare the entire bundle of required returns for business owners for a low fee. For just $94.95, H&R Block Premium and Business will prepare and e-file both your personal federal and state returns (Form 1040) and your federal and state business returns (Form 1120, Form 1120S, and Form 1065). The downside of the desktop software is that it doesn’t include assistance from a live tax professional, which is available with the online program for individuals.
Pros
- Up to five federal e-files included in desktop software
- Import your prior-year return from any tax software
- Free in-person audit support
Cons
- Desktop software requires downloading and installation
- No live tax pros with the desktop software
- Return cannot be accessed from a mobile app
Pricing
Premium Tax Software: Best for self-employed:
- $79.95 to e-file up to five federal individual returns, including Schedule C
- Includes e-filing one state individual return—$39.95 for each additional
Premium and Business Tax Software: Best for owners of C-corps, S-corps, and partnerships
- $94.95 includes e-filing all required returns:
- Personal, federal, and one state return; additional state returns are $39.95; e-filing of state business returns is not available in all states
- Federal C-corp, S-corp, or partnership return
- State business return included
There is also a $19.95 e-filing fee for each individual and business state return.
H&R Block Overview
Block Advisors: Best for Having Your Business Return Completed By a Tax Professional for a Low Price
H&R Block is known for its tax preparation services—and it also offers financial support all year round with Block Advisors. Focusing specifically on small businesses and self-employed individuals, it allows you to either partially or fully outsource not only your tax prep but also your bookkeeping and payroll.
Block Advisors is affordable and offers plans for different budgets, depending on how involved you want to be. You can work with your financial expert on the phone or online and can customize a package that will fit your needs.
Pros
- Access to a financial professional near your home or business
- Ability to tailor a package that includes taxes, bookkeeping, and payroll support
- Customize reports including profit and loss (P&L) statements and structural analytics
Cons
- Pricing isn’t totally transparent and requires a $50 consultation for more information
- Desktop software not available
- DIY option isn’t available for corporate and partnership returns
Pricing
- Self-employed: Starting at $85 to do your own and $220 to work with a pro
- S-corp, C-corp, and partnership: Starting at $260 to work with a pro
- Personalized consultation: $50
- Bookkeeping: Starter plan starting at $50 per month, full-service plan starting at $150 per month
Payroll: Self-employed services starting at $59 per month; One+ Employees plan starting at $70 per month plus $10 per employee per pay run.
Block Advisors Overview
TaxSlayer: Best Inexpensive Tax Software for Freelancers With Advice From Tax Pros
TaxSlayer is ideal for self-employed persons who need a value-priced program to file Schedule C but still want the ability to speak with a tax professional. If you own a corporation or partnership, you cannot use TaxSlayer to file your business tax return. TaxSlayer Self-Employed features priority customer support, a simple interface, guidance for deductions, and audit assistance. Most self-employed people or freelancers will pay $89.90 to file both their federal and state returns.
Pros
- Live support from a tax professional
- Inexpensive
- Cloud-based program can be accessed from mobile app
Cons
- Cannot file C-corp, S-corp, or partnership returns
- Cannot import Schedule C income and expenses
- Cannot import capital gain transactions
Pricing
- $49.95 per federal Form 1040 individual return with Schedule C
- $39.95 per state individual return
TaxSlayer Overview
FreeTaxUSA: Best Free Small Business Tax Software for Freelancers
FreeTaxUSA is ideal for self-employed people looking for free tax software to file their individual federal tax returns, including Schedule C. It isn’t a scaled-down version of a paid subscription, as it’s a full-featured tax preparation software program that includes all forms that most self-employed taxpayers will need. However, FreeTaxUSA cannot prepare C-corp, S-corp, or partnership returns.
Pros
- Import your prior return from TurboTax, H&R Block, or TaxAct
- Free federal return and inexpensive state returns
- Input data through an interview process, similar to paid programs
Pros
- Cannot consult with CPAs or EAs
- Cannot import income and expenses or stock transactions
- Customer support options are very limited
Pricing
- Free to file federal Form 1040 individual return with Schedule C
- $14.99 to file each state
- $7.99 for priority support with live chat, unlimited amended returns, and audit assist
FreeTaxUSA Overview
BoomTax: Best Cloud Software for Filing Year-end Information Returns Like W-2s, 1099s & 1095s
Although BoomTax doesn’t allow for income tax filing or payroll processing, it’s an affordable and easy way to process 1099s, W-2s, and forms related to ACA filing. Its step-by-step approach allow you to complete forms 1099-NEC, 1099-MISC, 1099-DIV, 1099-INT, 1094-C, 1095-C, 1094-B, and 1095-B. Support for Affordable Care Act (ACA) reporting is available for a flat fee of $349 per company for up to 150 employees for the 2022 tax year. Filing for forms 1099 and W-2 starts at $39 for 13 forms.
Pros
- 100% money-back guarantee
- Supports ACA reporting
- Filing for W-2s and 1099s available
- Import from QuickBooks Online and popular payroll providers like ADP and Sage
- Choice of delivery methods include mail, email, or a batch PDF download
Cons
- Doesn’t support income tax filing
- No desktop software
- No mobile app
- No free trial
Pricing
Pay-as-you-go for 1099 and W-2 forms: First 13 forms are $39, and then pricing shifts to per form.
ACA filing:
- Premium: $349 per company for up to 150 employees, email and phone support, and unlimited corrections; state reporting for DC, NJ, RI, and CA
- Enterprise: Custom quote; includes unlimited companies and employees, priority email and phone support, and unlimited corrections
Optional fees:
- ACA Form Mailing: $1.99 per form
- ACA Form E-Delivery: 30 cents per form
- 1099 Form Mailing: $1.65 per form
- 1099 or W-2 Form E-Delivery: 25 cents per form
- W-2 Form Mailing: $1.75 per form
- TIN Verification Service: $125 per batch
If you don’t want to pay extra for form delivery, you can download the forms as a PDF file and arrange the delivery. BoomTax allows you to file information returns late, but we suggest doing so as soon as possible to minimize penalties.
BoomTax Overview
When deciding on a business tax software, you should consider the other business systems your small business requires and try to select a combination of software that best fits your needs. To choose the best small business tax software, you need to understand which returns you must file. How your business is organized for tax purposes will determine the required returns to file.
Filing Requirements for Self-employed, Sole Proprietorships & Freelancers
Self-employed taxpayers, sole proprietorships, and freelancers are treated the same for tax purposes. These businesses must report their income on Schedule C of the individual tax return, Form 1040. There’s no separate business tax return.
Filing Requirements for C-corps
C-corps must report their business income and tax liability on a corporate tax return, Form 1120. All business income is taxed on the corporate return and has no effect on the individual tax return unless the corporation pays dividends to the owners.
Filing Requirements for S-corps & Partnerships
S-corps and partnerships are required to report their business income on a federal tax return filed separately from the owner’s return. S-corps must file a Form 1120S, and partnerships must file a Form 1065. Both Form 1120S and Form 1065 include a Schedule K-1, which shows each owner’s share of the business income. The income on Schedule K-1 is commonly referred to as flow-through income and reported on the owner’s individual return, Form 1040, Schedule E.
Filing Requirements for a Limited Liability Company
A limited liability company (LLC) may be treated as a sole proprietorship, C-corp, S-corp, or partnership.
Costs & Features
In addition to federal returns, most individuals and businesses must file state returns. When comparing the cost of small business tax software, be sure to include the cost for all your required returns.
Most small business tax software now includes the option to consult with a live tax professional. The software can only produce accurate returns when you enter accurate information. Answering a question incorrectly can have a dramatic effect on a tax return. The more complicated your return, the more important it’s that the software provides a tax professional to consult with during the preparation.
The key features you should look for in small business tax software are:
- Cost: Owners of corporations and partnerships generally require at least four returns, and sole proprietors require at least two returns.
- Support for tax forms: The tax software can prepare business entity returns for S-corps (Form 1120S), C-corps (Form 1120), partnerships (Form 1065), sole proprietors (Form 1040, Schedule C), and rental property (Form 1040, Schedule E).
- Data import: Tax software can import data from bookkeeping software and financial institutions.
- Deduction finder: The tax software helps business owners find deductions for their industry and pick the best way to deduct depreciation and car expenses.
- Error checking: The tax software must have diagnostics to check for mistakes and potentially missing data.
- Live tax professionals: Consultation and perhaps even a review by a tax professional is critical for complicated returns. Simply clearing all the issues from the error check doesn’t guarantee the return is correct. Preferably, tax professionals should be either CPAs, EAs, or lawyers, instead of somebody trained by the software provider.
- Ease of use: The tax software must be relatively easy to learn and navigate.
- Customer support and help resources: The tax software must provide an online knowledge base and customer support by phone or email.
Frequently Asked Questions (FAQs)
What software does H&R Block use?
H&R Block uses its own proprietary software to prepare taxes for both individuals and businesses. It also offers both an online and desktop version of its software for those who want to prepare their own taxes.
Is there a TurboTax for small business?
TurboTax offers two products to serve small business owners. TurboTax Home & Business is designed for sole proprietors and 1099 contractors, while TurboTax Business helps you prepare taxes for corporations, partnerships, and LLCs.
Is FreeTaxUSA really free?
Yes, you can file a federal tax return for free and state tax returns for $14.99.
How much does small business tax software cost?
The cost of small business tax software can vary depending on the specific software and the features it offers and the forms that you need to file. On average, prices will range from $50 to $200 for a basic software package. More advanced packages with additional features such as real-time collaboration and data import/export capabilities can cost up to $500 or more. Many software providers offer free trials so that you can test out the platform before committing to a purchase.
What are potential tax write-offs for small businesses?
Common tax write-offs for small businesses include start-up costs, business equipment and supplies, home office expenses, advertising and marketing, travel expenses, legal and professional fees, vehicle expenses, and employee benefits.
Bottom Line
Small business owners should consider their needs carefully when choosing tax software for preparing their business and personal tax returns. If your business is a corporation or partnership, you need software that will prepare Form 1120, 1120S, or 1065—in addition to your personal Form 1040. You want software that will make it easy to transfer your accounting data, maximize your tax deductions, check for errors, provide unlimited customer support, and allow you to consult with a tax professional when you need it.
