Taxes are unavoidable, whether you’re filing as an individual or as a business. Filing your taxes as a business can be even more complex and challenging than filing your personal returns, and making even a minor mistake can mean an audit, or worse.
There are special considerations small businesses must bear in mind when doing their taxes, ranging from how to handle employees to knowing which changes and updates will impact the new filing year.
Luckily, business owners have the advantage of being able to choose from an extensive range of business tax preparation software solutions.
Thanks to these professional tax software options, you no longer have to pay an expensive professional to complete your taxes, nor do you have to worry that you’ve done something wrong or missed a crucial detail in dealing with the IRS.
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When selecting the best tax software for your small business, you can often choose between desktop versions and options that let you file business taxes online. The choice really depends on your preferences, as well as the features you’re looking at and your budget.
Some of the characteristics you might consider in your search for the best small business tax software solution include:
- Comprehensiveness: Your tax platform must be able to handle all aspects of preparing and filing your business taxes. It should include everything you might need or want to keep the process streamlined, simplified, and manageable. Look for a professional tax software that will allow you to file all applicable returns, including federal, state, and local taxes.
- Automatic updates: This is an advantage of programs that file business taxes online—automatic updates ensure you’re up-to-date on all current tax laws and regulations that could potentially impact you, so you don’t miss anything in a constantly changing environment.
- Simplified start-up and installation: As a business owner, you don’t have a great deal of spare time to dedicate to launching a new tax software or online platform. That’s why it’s important to look for an option that’s either easy to install or to integrate within your existing technology and business structure. The business tax software you select should ideally take no more than a few hours to have fully up and running. Online options are going to be much faster to get started compared to desktop software.
- Ease of use: Along with being easy to get started, the ideal tax software for small business is also one that’s easy to use, with a simple interface. A variety of employees may use your tax software; regardless of technical expertise, they should feel comfortable using it.
A few other features worth looking for in your small business tax software include:
- The ability to upload W-2s and 1099s directly into the system
- Schedule C options
- A simple way to opt out of those tax situations not applicable to your business
- Options for importing data from other personal finance software you utilize
- Customizable features
- The option to file an unlimited number of returns
Choosing a professional tax software option can be incredibly valuable for your business and your financial peace of mind.
We put together a list of our top five picks for the best tax software for small business. These selections have many of the features we cited above and are all excellent choices for any business or industry.
We’ll highlight these top picks, as well as some of their many standout features, to serve as a guide for you during the process of choosing the best small business tax software.
TurboTax by Intuit is perhaps one of the more well-known tax preparation options for both commercial and personal needs.
TurboTax provides a simple-to-follow, step-by-step approach to completing tax returns and filing, even for people who have very little tax knowledge. It’s this simple way of doing things that make it a favorite product for so many people.
You’re asked questions about your life that are easy to answer as you move through the process, and TurboTax then makes calculations, which are guaranteed to be 100% accurate.
The program is always completely up-to-date with the latest laws, including healthcare, which can be particularly pertinent in a business setting.
General features of TurboTax include:
- You have the ability to automatically import W-2 tax form information directly into your TurboTax return from financial institutions.
- TurboTax double-checks all returns, looking for deductions and credits and also ensuring every detail is correct.
Uniquely, TurboTax offers a satisfaction guarantee, which says you’ll get your taxes done correctly, no matter what.
TurboTax Business is designed for use by S Corps, C Corps, partnerships, estates, trusts, and multi-member LLCs.
Features of this particular TurboTax business tax software product include:
- Covers reporting both income and expenses for the types of businesses listed above.
- Ability to maximize industry-specific tax deductions.
- Guidance and support on S Corp, partnership, C Corp, and multi-member LLC or trust tax forms.
Using this small business tax software lets you import the previous years’ TurboTax returns to save time. You can also gain a year-over-year comparison for your business.
Import profit and loss statements automatically and directly from QuickBooks and TurboTax will even organize them into the appropriate categories.
TurboTax will walk you through each of your deductible business expenses and find you the right deductions so that you pay only what you actually owe.
Other valuable aspects of this method to file business taxes online include:
- You’ll receive guidance on commonly overlooked write-offs and deductions pertinent to your industry.
- TurboTax helps small business owners determine the best tax-saving strategies for assets and reporting depreciations on large purchases.
- Customer Support Agents provide one-on-one technical assistance.
- Thousands of errors are automatically checked for before filing to help users ensure accuracy and avoid triggering an audit.
- If you’re a new business, you’ll find options for determining startup tax deductions for maximized refunds.
- The Audit Risk Meter will check your tax return for common audit triggers, showing whether you’re at a high or low risk.
- You can automatically distribute K-1 forms in PDF format.
- Create as many W-2, 1099-MISC, 1099-INT, and 1099-DIV as you need for your employees, shareholders, contractors, and partners.
- File income tax returns for multiple businesses, regardless of entity.
- With this small business software, free options include e-filing. At no cost, you can file your federal and state tax return with direct deposit, ensuring the fastest possible refund. This is included with TurboTax Online.
TurboTax is available as an installable software for Windows and Mac devices, and it’s also available as an online solution.
TurboTax is a gold standard in the world of small business tax software. Users say that along with being easy to use, it’s also incredibly comprehensive and packed with any and all features you could want in a tax software for business.
TaxACT is known for being simple to use and affordable yet powerful. It’s ideal for businesses of any size and structure, much like TurboTax.
TaxACT lets you get what they call the “best deal in tax,” regardless of the simplicity or complexity of your return.
TaxACT was founded in 1998 to provide affordable digital and download tax solutions, whether you’re an individual, a tax professional, or a business.
The company offers clients a full suite of online, downloadable, and mobile options that make it easier for you to file your taxes on your own, and each product provides step-by-step instructions, as well as a personalized process.
General features of TaxACT include a dedication to accuracy, money-back guarantees on desktop products, and maximum refund assurances.
TaxACT for Small Business
There are a variety of small business tax software options available from TaxACT.
Many of the business tax software options from TaxACT include the following features and offerings:
- You can prepare and print an unlimited number of returns.
- Products are divided into 1040, 1041, 1065, 1120, 1120S and 990 Editions.
- The state editions are sold separately.
- You’ll go through step-by-step guidance to maximize business deductions.
- Small business software free options available from TaxACT include free IRS e-filing for the fastest possible processing.
- You can save time and reduce the likelihood of errors by importing data from your previous years’ TaxACT Return.
- Schedule K-1 items will be automatically allocated. K-1 data is then automatically imported into your 1040 TaxACT return.
- Import you Trial Balance Reports in CSV format from whatever accounting software you use. Once you import this information, you can make edits that will be automatically added to the right lines.
This tax preparation business software product, whether online or in desktop version, is packed with features. In addition to the primary functions listed above, TaxACT also includes the following:
- With TaxACT, you can make the complexity of capital gains much easier.
- Review your assets and take advantage of depreciation reports for the most in deductions.
- You can reconcile book income, which makes it much easier to complete Schedule M-1.
- TaxACT Alerts will go over your return with a fine-tooth comb to make sure you’re not missing anything, whether that’s errors, information you left out or possible savings opportunities.
- You can add multiple copies of forms directly into your TaxACT program.
- Compare your current year’s data to previous years easily and quickly.
- TaxACT uniquely offers the ability to calculate loan payments and more.
The TaxACT Price-Lock Guarantee is something that’s particularly unique about this tax software for business.
The Price Lock Guarantee says that if you create and file your return using any of the available online products, you’ll pay the price it was listed at when you started your return.
Along with TurboTax, TaxACT is seen as one of the most comprehensive, in-depth, and easy-to-use professional tax software products. It pairs ease-of-use and rich features with plenty of customer support when needed, as well as quite a few additional resources that guide you through the process and educate you on how to most efficiently and effectively file your business taxes online.
H&R Block is well-known in the world of tax preparation. Many people turn to this company for in-person filing assistance, but you can also rely on this trusted name to file business taxes online, as well as using a desktop software solution offered by the company.
H&R Block is billed as the world’s largest tax services provider, and there are currently more than 12,000 H&R Block branches located around the world, including company-owned and franchise locations.
Along with these sites, H&R block carries its expertise and reputation to online filing solutions as well as desktop software, so there’s something to suit all business needs.
All of these products include a maximum refund guarantee, as well as a 100% accuracy guarantee. If your return isn’t entirely accurate, the company will reimburse you for the IRS penalties you paid as a result.
H&R Block also offers complimentary in-person support if you are subjected to an audit after using one of their products.
H&R Block Premium and Business
H&R Block Premium and Business is the go-to choice in terms of tax software for small business.
Features of this small business tax preparation software include:
- When you purchase this professional tax software, you’ll have access to free unlimited Business State Program downloads.
- You can make the most of the potential tax benefits for everything from vehicle deductions to asset depreciation, as well as all of your business expenses.
- H&R Block will guide you through how to prepare and file your business returns, and this includes a variety of entities, such as S-Corporations, partnerships, LLCs, and non-profits. You have the ability to e-file up to five personal returns and unlimited returns.
- Utilize the convenient tools included with this small business tax software that allow you to create yearly payroll forms required by the IRS and the ones you need to give to employees, including W-2s and 1099s.
- One of the leading small business software free options available with H&R Block is the import feature, so you can automatically import all of your tax data from the previous year and your W-2s and 1099s from H&R Block as well as TurboTax and Quicken.
As well as the primary features cited above, we selected this as one of the best small business tax software products because of other additional features, like:
- Stringent data security
- Step-by-step security through every detail of filing your business taxes
- The inclusion of forms related to the Affordable Care Act
- Free, unlimited advice from experts
- Accuracy review double-checks
As well as H&R Block’s Premium and Business product, some business owners may opt for the simpler Premium product, which is ideal for self-employed professionals but isn’t applicable to Corporate, S-Corporation, partnership and LLC, estate and trust, and non-profit tax returns. This product also doesn’t offer the ability to create payroll and employer forms, and it isn’t designed to maximize vehicle tax deductions or depreciations for business expenses.
H&R Block offers quite a few features and a sense of versatility that’s appealing to users, but it doesn’t offer as many comprehensive options as some of the other options on this list, which is something to keep in mind when making a purchase.
For example, it’s not the ideal tax software for small business if you need to file a 1065. The primary thing is to make sure the H&R Block product you choose has the specific capabilities you need for your business before purchasing.
E-file is an online platform based in Fairfax, Virginia, allowing users to file federal income and state taxes.
It makes it easy to file taxes online with not only accurate representation and information, but also tax deduction tools.
The process to file business taxes online is relatively straightforward with E-file. All you do is start your return, which is completed by following simple-to-understand tax questions. You can also import your previous years’ data if you’re a returning E-file user, and all the right forms are filled for you.
The E-file software will do all the calculations for you, and you can prepare and file state tax returns simultaneously with your federal returns. If you need to leave your return and come back, E-file will save your progress.
Once you’ve completed your return, you will have the advantage of an automatic error and accuracy check. Then, you can either file your return directly to the IRS or print it and mail it off.
Some of the many features available from this straightforward business tax software solution include:
- There are no income restrictions.
- Every filing status is supported.
- You can calculate capital gains distributions.
- Claim tax credits and deductions.
- It’s easy to report self-employment and small business income.
- You have the option to pay the company fee later if you choose to have it deducted from your refund.
Some of the forms/schedules available when you use E-file include:
- Form 1040: This is the standard individual income tax return.
- Schedule C: This is required if you’re reporting profits or losses from a sole proprietorship.
- Schedule D: This is used for Capital Gains and Losses.
- Schedule K-1: This is the form representing a shareholder’s share of income, deductions, and credit.
- Schedule SE: This is the self-employment tax.
- Forms 4797: This is where you record sales of business property.
- Form 8846: This is for Employer SS and Medicare taxes paid on certain employees.
Again, this is hardly an exhaustive list of the available forms, but we included it to give you an idea of the capabilities and options available with E-file.
E-file is a basic way to file your business taxes online, and while it may not offer all the features of something like TurboTax, it does have many advantages, like the Auto Tax Form Selection option. E-file will choose the right tax form for you after you select a package—Free Basic, Deluxe, and Premium.
You can then be automatically upgraded or downgraded based on the answers you provide. This ensures that you’re always paying the lowest possible price for the tax preparation solution you need, without any sales gimmicks or upsell attempts.
E-file is also a less expensive alternative to options such as H&R Block and TurboTax. If you don’t qualify for the free basic services available from E-file, you will still pay up to 64% less compared to other small business tax software preparation options, making this an appealing platform for anyone seeking something that’s budget-friendly and tailored to their unique business needs.
E-Smart guarantees to deliver accurate online tax filing on both federal and state returns, guaranteed.
Some of the general features of e-Smart include a credit maximizer, which is an automatic check for hundreds of credits and deductions, as well as electronic W-2 import to reduce the likelihood of errors.
E-Smart also includes live customer support from experts through each step and importing options, even if you filed with a competitor during the previous year.
Finally, other general features include professional audit assistance and the Smart Bundle, which lets you protect all of your important documents in a streamlined, organized way.
Other general features you’ll have access to include:
- Free chat and tax support
- State tax preparation
- Tax return amendments
- ACA forms
- Itemized deductions
- Self-employment income
- Business expenses
- Home office deductions
- Gains, profits and loss, and S-corporation
- Enhanced audit assistance
E-Smart Tax Premium
If you’re exploring the e-Smart products specifically designed as tax software for business, you’ll likely opt for the Premium option.
Premium is the best choice for small-business owners, and it’s strengthened by the inclusion of Professional Tax Advice.
With e-Smart Premium, you’ll be able to access Affordable Care Act Forms, including those required if you need an Exemption or Hardship. Other features unique to this professional tax software product include:
- Earned Income Credit features
- Credit maximizers
- Health Savings Accounts forms
- Schedule B income reporting from interest and investments
- Schedule C income deductions
- The ability to report common self-employment and business expenses
- Simplified reporting on Form 8829—Asset Depreciation
- Easy Schedule D filing which includes gains, profits and loss, and S-Corporation
You can also use the Premium edition of e-Smart to file state taxes for as little as $29.95.
In addition to the offerings available for filing business taxes online, one of the distinctive elements of e-Smart that compelled us to include it on this list are the extensive tax resources that can help you develop a better understanding of not just taxes, but your finances in general.
E-Smart offers in-depth guides on the basics of taxes, as well as guides to the Affordable Care Act law, including the forms, credits, and exemptions you’ll need to understand and utilize.
You can also use the website to find information on not just federal taxes but also state filing information and deadlines, and there is a range of helpful calculators available on the website.
We like e-Smart for quite a few reasons, including the free chat support for all customers, which makes it convenient to seek help while you file your business taxes online.
As long as you feel like you’re up to the challenge of filing your own business tax returns, this is a low-cost option. It doesn’t have all the bells and whistles of some of the more expensive versions of business tax software, but it is still great for its simplicity and the fact that it’s relatively budget-friendly.
Choosing the Best Small Business Tax Software
When you do the required research to select the best tax software for your small business, you’re doing yourself a tremendous favor.
You’ll have a tool on your side not just to ensure your returns are filed correctly, but that you’re paying the least possible amount of taxes and taking all of the available deductions.
It’s our hope that our top picks will help you move ahead in your search for the best tax preparation business software, armed with vital information and a useful sense of comparison.
We hope you have found this “Top 5 Best Tax Software for Small Businesses – 2016” article useful.
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AdvisoryHQ Review Team
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