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
Best Tax Software for Small Businesses At a Glance
 |  |  |  |  |  | |
|---|---|---|---|---|---|---|
DIY Return With Schedule C–Federal | $64.95 | $119 | $74.95 | $85 | $49.95 | $0 |
DIY Return With Schedule C–State | $44.95 | $54 | Includes 1 State | $36.99 | $39.95 | $14.99 |
Assisted Federal | Included | $209 | N/A | N/A | Included | $7.99 |
Assisted State | $54.95 | $59 | N/A | N/A | Included | $7.99 |
Full Service Federal | N/A | $399 | N/A | $220 | N/A | N/A |
Full Service State | N/A | $59 | N/A | N/A | N/A | N/A |
Audit Guidance and/or Defense | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
Schedule C Business Income & Loss | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
Data Import | ✓ | ✓ | ✓ | N/A | N/A | N/A |
Deduction Finder | ✓ | ✓ | N/A | N/A | N/A | N/A |
Guidance From a Tax Pro | ✓ | ✓ | N/A | ✓ | ✓ | N/A |
S Corporation (S-corp) & Partnership Returns | ✓ | ✓ | ✓ | ✓ | 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 (Forms 1120, 1120S, and 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
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
Features
- Accuracy/Maximum Refund Guarantee: If you receive a reduced refund, increased tax liability, or have to pay a penalty or interest due to an error caused by its team, TaxAct will refund your software costs and pay any difference in your lower refund or higher tax liability.
- Mobile app: The TaxAct Express app lets you e-file your federal and state tax returns, file free federal extensions, track your IRS refund, and capture W-2 data.
- Deduction maximizer: Using a question-and-answer format, TaxAct will provide you with a step-by-step guide to assist you with completing your returns while also maximizing your deductions. Self-employed individuals will be able to identify common deductions that are specific to their work.
- Tax calculator: TaxAct’s tax calculator allows you to look ahead to future years by creating what-if scenarios in your current return. You can also project changes to the data to estimate your tax liability for current or future years.
- Data import: You can import your previous year’s tax return as a PDF, regardless of whether you used TaxAct or another tax software.
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.
TurboTax
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
Features
- Deduction maximizer: TurboTax can search over 350 tax deductions and credits to ensure that you’re able to find every available opportunity to maximize your refund. It also provides step-by-step guidance to turn your investments into tax breaks.
- Mobile app: The TurboTax mobile app lets you use your mobile device to file your taxes on the go, including the ability to talk live on-screen with one of TurboTax Live’s tax experts. It also allows you to take a photo of your W-2 and upload it to the app.
- Donation calculator: Available with the Deluxe, Premier, and Self-Employed plans, ItsDeductible is a free online tool that uses market data from online thrift stores, retail shops, and auction websites to estimate the dollar value of your donated items.
- TurboTax Live: With both assisted and full-service tax assistance options, TurboTax Live gives you the option of access to expert advice or a tax expert who’ll prepare and file your taxes for you.
- 100% Accuracy Guarantee: You can fix errors before you file easily with TurboTax’s CompleteCheck, which checks for missing, incomplete, or conflicting information. It guarantees that all calculations are 100% accurate, or it’ll cover any penalties or interest that’s charged by the IRS.
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 $89.95, 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 (Forms 1120, 1120S, and 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.
H&R Block
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
Features
- Maximum Refund Guarantee: H&R Block provides a Maximum Refund Guarantee, which guarantees that if you discover an error in the tax preparation software that entitles you to a larger refund or smaller liability, H&R Block will refund your software fees. You can also use the software to amend your return at no additional charge.
- Audit guarantee: If, after filing your return, you receive an IRS or other tax notice related to the return you filed with the tax preparation software, H&R Block will provide assistance with understanding it. You’ll also receive guidance as to the steps to take in responding at no additional charge.
- Tax calculator: Answer a few questions about your life (like whether you’re single or married and have children), income, and expenses, and H&R Block’s tax calculator will estimate your filing status and taxable income.
- Tax Identity Shield: With the goal of protecting you from identity theft, H&R Block’s Tax Identity Shield includes a dark web identity watch, credit report access, and identity monitoring. If you do become a victim of tax fraud, it offers assistance from a specially-trained agent to help you recover your refund.
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.
Block Advisors
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
Features
- Personalized tax help: With Block Advisors, you’ll receive unlimited live support from a tax advisor who has specialized training in small business taxes. They’re available year-round and have an average of 12 years of experience.
- 100% Accuracy Guarantee: If Block Advisors makes an error on your return, it will reimburse you for any resulting penalties and interest. To qualify, the error must not be due to incomplete, inaccurate, or inconsistent information supplied by you.
- Accessible support: Block Advisors are available via phone, live chat, or video call.
- Year-round accounting assistance: In addition to its tax services, Block Advisors also provide bookkeeping and payroll support. For other options, check out our recommendations for the best online bookkeeping services.
- Xero partnership: Block Advisors partnered with Xero to provide full access for free.
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.
TaxSlayer
Pros
- Live support from a tax professional
- Inexpensive
- Cloud-based program can be accessed from mobile app
What's Missing
- Cannot file C-corp, S-corp, or partnership returns
- Cannot import Schedule C income and expenses
- Cannot import capital gain transactions
Features
- Guaranteed maximum refund: With the exception of the Simply Free plan, TaxSlayer will refund your purchase if you don’t receive the maximum refund that you’re entitled to, as long as you’re able to prove that it cannot be attributed to data that was entered incorrectly.
- Tax refund calculator: You can estimate your tax refund using your paycheck or W-2 with TaxSlayer’s refund calculator. It’ll also give you an idea of your potential taxable income and assist with finding credits and deductions that you can claim.
- Mobile app: TaxSlayer’s mobile app lets you file your taxes, view the status of your return, and receive updates with personalized notifications.
- PDF file import: TaxSlayer allows you to import tax returns that are stored as PDF documents, even if they were prepared with other online tax preparation programs. It supports forms 1040, 1040A, and 1040EZ.
- IRS audit assistance: Available with TaxSlayer’s Premium plan, you’ll have access to TaxSlayer’s IRS-certified professionals and enrolled agents (EAs). This service is available for up to three years after the IRS accepts your file.
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.
FreeTaxUSA
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
Cons
- Cannot consult with CPAs or EAs
- Cannot import income and expenses or stock transactions
- Customer support options are very limited
Features
- Prior-year returns: You can access, print, and file past-due federal tax returns from 2015 to 2021 for free, and state tax returns for $17.99 each. If your prior-year returns were filed with another tax preparation program, you can upload a PDF of your return to FreeTaxUSA.
- Audit assistance: Available with the Deluxe Edition upgrade, FreeTaxUSA offers audit assistance, which includes access to a tax specialist who’ll help you with audit notices and/or the audit process.
- Unlimited amended returns: You can prepare and file an amended return to correct a return that has already been filed with the IRS. The fee for Free users is $17.99, and Deluxe users can file as many amended returns as necessary.
- Tax return storage: As a FreeTaxUSA user, your tax returns will be stored securely in your account for up to seven years. If you use the software two years in a row, the prior year’s information will automatically be carried into the current year’s taxes.
- 100% Accuracy Guarantee: FreeTaxUSA stands by its services with its 100% Accuracy Guarantee. If you end up having to pay a penalty or interest because of an error that it has made, FreeTaxUSA will reimburse those fees.
How To Choose the Best Small Business Tax Software
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.
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.
