For small business owners, managing taxes can feel overwhelming. The right tax software simplifies the process, saves time, and helps avoid costly mistakes. This guide reviews four popular options for U.S. small businesses:
- QuickBooks Online: Combines accounting and tax prep, tracks expenses, and integrates with TurboTax. Plans start at $25/month.
- TurboTax Self-Employed: Ideal for freelancers and LLCs, with tools for deductions and audit support. Federal filing starts at $129.
- TaxSlayer for Small Business: A budget-friendly option for simpler filings. Self-Employed package costs $52.95 for federal filing.
- H&R Block Online: Offers online filing with optional in-person help. Pricing starts at $49.99.
Each platform caters to different needs, from basic tax prep to advanced features for complex returns. Below is a quick comparison to help you decide.
Quick Comparison
| Software | Starting Price | Key Features | Best For |
|---|---|---|---|
| QuickBooks Online | $25/month | Accounting integration, expense tracking | Year-round financial management |
| TurboTax Self-Employed | $129 (federal) | Deduction tools, audit support, expert help | Freelancers, LLCs |
| TaxSlayer for Small Biz | $52.95 (federal) | Affordable, step-by-step filing guidance | Simple tax needs |
| H&R Block Online | $49.99 (federal) | Online filing with in-person support option | Balanced support and affordability |
Choose based on your business structure, budget, and complexity of your tax situation.
1. QuickBooks Online
QuickBooks Online combines bookkeeping and tax preparation in one platform, making it a go-to solution for small businesses. It helps you stay organized and meet IRS requirements year-round.
Tax Compliance Features
This platform takes the hassle out of tax compliance by automatically tracking your income and expenses. It even generates essential forms, like Schedule C for sole proprietors. One standout feature is its ability to calculate quarterly estimated taxes in real time. As your financial data updates, so do your tax estimates – helping you avoid penalties for underpayment. Plus, it categorizes transactions to create audit-ready records, reducing errors and ensuring deductions aren’t overlooked.
Deduction Tools
QuickBooks Online is designed to help you get the most out of your deductions. It automatically categorizes deductible expenses, such as mileage, home office costs, supplies, and equipment purchases. You can also upload receipts directly using the mobile app, giving you a clear picture of your potential tax savings as they happen. This feature helps you plan smarter and ensures no eligible expense slips through the cracks.
Integration Capabilities
One of QuickBooks Online’s strengths is its ability to integrate with other tools. For instance, its connection with TurboTax allows seamless data transfer, eliminating the need for manual entry. It also syncs with popular expense management tools and payroll services, creating a streamlined financial ecosystem. This ensures all your business data stays accurate and up-to-date for tax purposes.
Pricing
QuickBooks Online offers plans ranging from $25 to $80 per month. The Simple Start plan is ideal for solo entrepreneurs, while the Plus and Advanced tiers are better suited for businesses needing inventory tracking or more detailed reporting. While payroll services and live tax support come at an additional cost, the core accounting and tax features provide solid value. For businesses operating in multiple states, the platform also handles multi-state sales tax tracking and reporting. However, more complex multi-state income tax scenarios may still require professional guidance.
Up next, we’ll dive into TurboTax Self-Employed to see how it serves freelancers and sole proprietors.
2. TurboTax Self-Employeda
TurboTax Self-Employed is designed for freelancers, independent contractors, and small business owners who need guidance with self-employment taxes. Its interview-style interface simplifies the filing process, walking users through complex tax situations step by step.
Tax Compliance Features
TurboTax Self-Employed caters to various business structures, including sole proprietorships, partnerships, LLCs, and S-corporations. It automatically generates essential tax forms like Schedule C for reporting business income and expenses, Schedule K-1 for partnership income, Schedule D for investment details, and Schedule E for rental income.
The software provides year-round tax support, with business tax experts available seven days a week from 5 a.m. to 9 p.m. during tax season. It also includes audit protection at no extra cost, offering personalized audit support if the IRS raises any questions. Additionally, TurboTax guarantees accuracy and maximum refunds, thanks to its built-in error-checking tools that help catch mistakes before filing.
Deduction Tools
TurboTax’s deduction maximizer helps users identify and claim all eligible business expenses. For those on the Premium tier, the software offers tools specifically for self-employed individuals, such as home office deduction calculators and detailed tracking of business expenses on Schedule C. It also supports claiming deductions for investments (via Schedule D) and rental properties (via Schedule E).
A 2023 analysis by Novo of over 4,600 small businesses found that 57% used TurboTax, highlighting its popularity among small business owners for identifying and maximizing deductions.
Integration Capabilities
TurboTax Self-Employed includes a one-year subscription to QuickBooks Self-Employed, making expense tracking seamless. This integration reduces manual data entry and minimizes errors when transferring financial details to your tax return. The platform also supports importing financial data from various sources, including QuickBooks accounts and cryptocurrency exchanges, which is especially beneficial for users managing complex records. TurboTax is available as both a web-based service and a downloadable application, giving users the flexibility to choose their preferred format.
Pricing
TurboTax Self-Employed is priced at $129 for federal filing and $64 per state return. While it’s on the higher end of the pricing spectrum, many users find the comprehensive features and user-friendly experience worth the cost. For more intricate tax needs, TurboTax offers assisted service packages ranging from $209 to $489, or full-service options from $399 to $1,169, with additional fees for state filings. Upgrading to Live Assisted packages for added support from tax professionals costs between $79 and $209, with state fees ranging from $59 to $69. The platform holds an impressive average user rating of 4.6 out of 5 on third-party review sites, reflecting its ease of use and reliable support.
Next, we’ll take a closer look at TaxSlayer for Small Business.
3. TaxSlayer for Small Business
TaxSlayer provides an affordable and easy-to-use tax filing solution tailored for small business owners, freelancers, and sole proprietors.
Tax Compliance Features
TaxSlayer simplifies tax compliance by supporting essential IRS forms like Schedule C (for sole proprietors), Schedule E (for rental income), and Schedule SE (for self-employment tax). The platform guides users through the filing process step by step, includes error checks, and incorporates annual IRS updates to keep everything current. However, it doesn’t cater to more complex business structures that require Forms 1065, 1120, or 1120S, which are necessary for partnerships and corporations.
All plans come with free email and phone support, although these services are mainly available during peak tax season. For year-round assistance, users can access an extensive online help center for basic questions and guidance.
Deduction Tools
TaxSlayer offers tools to help users identify common deductions, such as home office expenses, vehicle costs, and startup expenses. While it doesn’t include a specialized deduction maximizer tool, its step-by-step guidance ensures users can claim eligible deductions without missing out. For those filing with Schedule C or 1099-MISC forms, the Self-Employed package includes a detailed guide specifically designed for self-employed individuals.
Integration Capabilities
Users can import prior year returns and forms like W-2s and 1099s, which saves time. However, the platform lacks integration with popular accounting software and doesn’t support cryptocurrency transactions. This means users with extensive records may need to enter financial data manually. Additionally, TaxSlayer is available exclusively online, as there’s no desktop version.
Pricing
The Self-Employed package is priced at $52.95 for federal filing and $39.95 per state filing, making it a cost-effective alternative to pricier options like TurboTax’s business packages. TaxSlayer offers four pricing tiers:
- Simply Free: Free federal and state filing for basic returns.
- Classic: $22.95 for federal, $39.95 for state.
- Premium: $42.95 for federal, $39.95 for state, with added audit assistance.
- Self-Employed: $52.95 for federal, $39.95 for state.
All plans include an accuracy guarantee, while the Premium and Self-Employed tiers provide access to tax professionals for additional support. With a 4.2 out of 5 rating, TaxSlayer is a solid choice for straightforward tax filing needs.
Next, we’ll dive into H&R Block Online and what it offers for small business tax preparation.
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4. H&R Block Online
H&R Block Online combines decades of tax expertise with modern tools, offering an accessible and affordable option for tax preparation.
Tax Compliance Features
H&R Block Online covers a wide range of tax compliance needs. It supports critical business tax forms like 1040, 1120, and 1065, and allows for the automatic import of W-2 and 1099 forms. For added peace of mind, it offers solid audit support, including professional assistance when necessary. If things get tricky, live support from tax professionals is available to help navigate complex scenarios.
Deduction Tools
One standout feature is the automatic deduction finder, which scans your return to identify potential missed deductions. It also provides clear, step-by-step guidance to help you claim common business deductions with confidence.
Integration Capabilities
H&R Block Online syncs seamlessly with various financial tools, enabling direct data imports. Its mobile app adds convenience, letting you manage your taxes on the go, upload receipts, and even check your refund status from anywhere. These features make the process smoother and more adaptable to your needs.
Pricing
Pricing for H&R Block Online starts at $49.99 and goes up to $109.99, depending on the complexity of your business return and the level of support you require. Higher-tier plans include perks like unlimited professional support, thorough audit assistance, and multiple state filings (note: state filing fees are extra).
Next, explore a detailed comparison of the pros and cons of all four solutions.
Advantages and Disadvantages Comparison
This breakdown compares the strengths and weaknesses of each platform, helping you align features with your specific business needs.
QuickBooks Online is designed for ongoing financial management, integrating accounting and tax preparation. However, it doesn’t handle tax filing directly. Pricing starts at $30 per month, making it a practical choice for businesses focused on day-to-day finances rather than tax filing.
TurboTax Self-Employed stands out for its user-friendly, interview-style interface that simplifies even the most complex tax scenarios. It excels at identifying deductions and offers year-round support. The downside? It’s on the pricier side, with assisted service plans and full-service options ranging from $209 to $1,169, plus additional fees for state filings.
TaxSlayer for Small Business is a cost-effective solution, offering essential tools like a deduction finder and unlimited phone and email support. It earns a solid user rating of 4.2 out of 5. However, its affordability comes at the expense of advanced features, limited audit support (only available as an add-on), and no support for more intricate business forms.
H&R Block Online provides a middle-ground option by combining online convenience with the ability to seek in-person help. It includes features like an automatic deduction finder and professional audit assistance. While pricing is moderate and adjusts based on your business needs, advanced features are locked behind higher-tier plans, which can drive up costs. Additional fees also apply for state filings.
Here’s a quick summary of the key features and drawbacks for each platform:
| Software | Pricing | State Filing | Key Strengths | Major Weaknesses | User Rating |
|---|---|---|---|---|---|
| QuickBooks Online | Starts at $30/month | N/A | Accounting integration, expense tracking | Requires separate tax filing software | N/A |
| TurboTax Self-Employed | $209–$1,169 (assisted services) | $59–$69 | Easy-to-use interface, year-round support | High cost with expensive add-ons | 4.6/5 |
| TaxSlayer for Small Biz | Around $59 | ~$39 | Budget-friendly, unlimited support | Limited advanced features, extra for audits | 4.2/5 |
| H&R Block Online | Moderately priced (varies) | Extra fees apply | Online and in-person support, deduction finder | Advanced features require upgrades | Not specified |
Final Recommendations
Based on the comparisons above, here are some tailored suggestions to fit various business needs.
For budget-conscious sole proprietors and freelancers, TaxSlayer is a solid choice at $52.95 for federal filing and $39.95 per state. However, it’s important to note that TaxSlayer is designed for simpler business setups and doesn’t support S-corp or partnership returns. If your business structure is straightforward, this could be a cost-effective option.
Small businesses with more complex tax needs might find TurboTax Self-Employed worth the investment, starting at $129 for federal filing. Its interview-style interface simplifies the process, while its advanced deduction tools help uncover potential savings. Plus, it offers year-round access to tax experts and includes audit protection. Another bonus? A full year of QuickBooks Self-Employed is included, making it easier to track expenses and maximize deductions throughout the year.
If ongoing financial management is a priority, QuickBooks Online, priced at around $30 per month, is a great fit. While it doesn’t handle tax filing directly, it integrates seamlessly with TurboTax, reducing manual data entry and minimizing errors. This combination works well for businesses that need consistent expense tracking alongside automated tax workflows.
For those seeking a balance between support and affordability, H&R Block Online is a versatile option, with prices ranging from $49.99 to $109.99. It offers the ease of online filing while also providing access to in-person or virtual tax professionals. This makes it a good choice for business owners who want professional guidance without paying for a full-service solution.
Your business type also plays a role in selecting the right software. Sole proprietors can generally work with any of these platforms, but partnerships and S-corps will benefit from TurboTax’s comprehensive form support. Multi-state businesses should also account for additional state filing fees, which range from $36.99 to $69 per state, depending on the provider.
Before diving in, assess your tax situation, explore free demos, and consult professionals for more complex scenarios. Make sure you have all necessary documents ready, and consider scheduling a consultation with a tax expert if needed. Choosing the right software now can save you time and help avoid costly mistakes when tax season rolls around.
FAQs
What should I consider when choosing the best tax software for my small business?
When choosing tax software for your small business, it’s important to consider a few key aspects: features, pricing, ease of use, and customer support. The ideal software should streamline the tax filing process, ensure compliance with tax regulations, and help identify deductions that align with your business activities.
Take into account your unique business needs. Do you need to manage multiple income sources? Track expenses efficiently? Or perhaps integrate with other tools you already use? The right software should not only save you time but also minimize errors, making tax management less of a headache as your business continues to grow.
What are the key differences in features and pricing between QuickBooks Online and TurboTax Self-Employed for small business tax needs?
While we can’t dive into a detailed side-by-side comparison of QuickBooks Online and TurboTax Self-Employed, here’s what you should know: both tools are widely used by small business owners aiming to simplify tax management. QuickBooks Online is geared toward comprehensive business accounting, helping with tasks like tracking income, expenses, and overall financial health. On the other hand, TurboTax Self-Employed is specifically designed for individual tax filing, particularly for those with self-employment income.
To decide which one suits your needs, it’s best to explore the official resources for each platform. This will give you a clearer understanding of their features and pricing options.
Can tax software handle complex multi-state filings for small businesses?
Many tax software programs are well-suited for handling the complexities of multi-state tax filings for small businesses. They’re built to streamline the process by walking you through the specific requirements for each state and ensuring compliance with different tax regulations.
When selecting a software solution, prioritize features like support for state-specific filings, automatic calculations for multi-state income, and accurate preparation and filing of state returns. These tools can help you save time and minimize the chances of mistakes – especially important if your business spans multiple states.
