If you are a small business owner, you’ll probably welcome anything that makes the tax filing process, well…a little bit less taxing. That’s where tax preparation software comes in and automates much of the process. While different programs have different features, they all offer a few main advantages: They take much of the stress away from business owners preparing their taxes and save them time and money.
When are Business Taxes Due in 2022?
If you are a small business owner filing your 2021 federal taxes, then the deadline to file your business tax return is April 18, 2022. That deadline applies to household employers, freelancers, sole proprietors and single-owner LLCs, household employers and C corporations. On the other hand, partnerships and S corporations must file their federal taxes for the tax year 2021 by March 15, 2022. Also, if you live where April 18 is a holiday, your taxes will be due the following day on April 19.
Why You Should Consider Small Business Tax Software Programs
Processing the taxes for your business doesn’t have to be too unpleasant when you have the right tools. But you have to remember it can go beyond just filing a W-2 for small business depending on your business structure. If you are self-employed, there are a number of reasons to consider using online tax software when preparing your business taxes:
- Better time and money savings: The time you will save using tax software is huge. You can easily knock an hour off your prep time if not more. This benefit is especially helpful if you have to file Schedule C and other forms.
- Ease of use: All the programs we reviewed are easy to use, even if you have no prior experience with tax software. They walk you through the process step by step, and most include help features in case you get stuck.
- Accuracy: The best tax prep software options are highly accurate, which reduces the chances that you will make an error on your return. This fact is especially important if you are self-employed or have a complex tax situation.
- Deductions and credits: Most programs have built-in features that help you find deductions and credits you may be eligible for, saving you a good deal of money.
- Free expert support: Many tax prep software programs offer free support, audit assistance and advice from tax professionals.
- Streamlines the process: Using tax software programs can help you stay organized and on top of your taxes throughout the year. This aspect can save you time and money in the long run.
10 Best Tax Software for Small Business
For our guide to the top tax preparation software packages for 2022, we looked at a variety of factors when selecting them, including key features, ease of use, customer reviews and cost per plan. By the time you finish reading, we’re sure at least one of them will help you choose the right program to file your self-employment income at tax time.
1. H&R Block
H&R Block’s easy-to-use online tax software works well for anyone from small business owners to large, complex corporations that need multiple ways for filing. Nearly half a million reviewers using H R Block rate it 4.4 out of 5 stars on their website too. Their wide range of features, audit support and online assistance from tax pros make them a standout among their competitors. Their self-employed business plans for business expenses and income range from $87.99 for federal and $44.99 per state to one that’s $194.99 for federal and $49.99 per state (includes assistance from tax pros).
2. Intuit TurboTax
Self-employed tax filers who use QuickBooks will likely find the TurboTax software package the best overall option for filing their federal tax return. Aspects that make the package popular are its robust support from tax pros, four different ways to do your taxes and audit support. Reviewers on TurboTax’s website rated their tax prep experience 4.6 out of 5 stars. Their self-employed business plans range from $89 federal and $39 per state that includes expenses and business income to full service that $389 federal and $49 state that provides assistance from tax pros.
3. FreeTax USA
FreeTaxUSA is one of the few FREE tax software programs that offer expert support for all tax situations, making it a darling among budget-conscious small business owners. That means filing is free for all federal tax returns, including IRS e-file and premium tax forms, and state filing is $14.99 per state. But, as you would guess, the cheapest online tax filing software around will come with some criticisms. For instance, 12% of reviewers on Trustpilot who used FreeTax USA for filling out their online tax forms said there was a lack of support and that the software could be challenging to use.
efile.com’s DIY software for doing taxes offers quick filing and inexpensive, up-front pricing. Rates for filing start at $19.49 to $34.49 (with a 25% discount), and they are well-known for year-round discounts. For instance, they often run promotions where you can take more off your tax preparation fee with a promotion coupon code at checkout.
TaxAct is a solid favorite among S and C corporations and partnerships who like the fact that it is the only place online that allows you to either use a PC or a Mac to file the taxes for your business. Additionally, they offer discounts for bundling personal and business taxes and have a user rating of 3.6 out of 5 stars on Consumer Affairs. For partnerships, C corporation and S corporations, the plan is $124.95 federal and$49.95 per state. Additionally, the software can help you get sole proprietors and the self-employed the most business deductions possible for $75.96 for federal and $54.95 per state. However, one of their main downsides is that they only have limited options for audit support.
6. Tax Slayer
TaxSlayer’s good reviews, easy-to-use interface, and excellent features plant it on many “Best of” lists for the self-employed, including ours. The company offers a $47.95 starting option for filing personal and business income and expenses, 1099s and Schedule Cs. Each state return is $36.95 added to that, and TaxSlayer transfers all the relevant information from your federal to your state return.
7. Jackson Hewitt Online
Jackson Hewitt Tax Service has been around for 35 years, and roughly 95% of their respondents on their website said they would recommend their tax services to a friend. The company is the second- largest tax preparer in the U.S., and they have several offices across the country if you need to ask a tax professional for help. Their tax packages start at $25, and this option works incredibly well if you have multiple state returns since they offer unlimited state returns for $24.
8. Liberty Tax
Liberty Tax is the sister company of Jackson Hewitt, and currently, they are the third-largest tax service franchise company worldwide. Unfortunately, Liberty Tax does not offer a free online filing product, but self-employed tax filers will pay $44.95 for federal and $39.95 per state for their 2021 premium tax filing software. They also have a user rating of 4.5 out of 5 on Google Reviews.
ezTaxReturn is one of the most affordable tax software services you can find online, with free federal tax filing for simple returns and a price point of $39.95 for more complex filings (state + federal). EzTaxReturn has several testimonials on its website, and customers have praised their online tax tools for their ease of use. One of the main downsides could be making over $69,000 or less since that is the cutoff threshold for using it.
10. Online Taxes at OLT.com
Online Taxes, also known as OLT.com, is another affordable option for internet tax software services, and they pride themselves on giving you a maximum refund and 100% customer satisfaction. They offer both a free and premium edition, which includes options for the self-employed and small business owners. For the free plan, federal returns are $0, and state is only $9.95. Premium prices start at $7.95 for federal returns and state returns. The company has been around since 1999 and offers free support via phone, chat and email.
What is the best tax software for small businesses?
The best online tax software for filing a tax return for your small business hinges on several factors, such as the features you want, your business’s legal structure, and how much support you need. With this in mind, we’ve summarized the main advantages from the list:
- Best Overall Tax Software: H&R Block.
- Best Online Support: TurboTax.
- Best for S Corporations and Partnerships: TaxAct.
- Best Online Tax Software for the Self-Employed: TaxSlayer.
- Best Value: FreeTaxUSA, ezTaxReturn and OLT.com.
- Best for Unlimited State Returns: Jackson Hewitt.
What happens if I miss the tax deadline?
If you miss the tax deadline, a few things can happen. The most common penalties for filing taxes late are failure-to-file and failure-to-pay penalties if you don’t pay by the due date. However, if you can show that you had a good reason for not filing on time, the IRS may waive the failure-to-file penalty. You can also ask for a payment plan if you can’t pay your entire tax bill at once.
Should I hire a tax professional to help with my small business tax filing?
There are a few things to consider when deciding whether or not to hire a tax professional to help with your small business’s tax filing. The most important factor is how complex your taxes are. If you have more than one business, own property, or have investments, you may need the help of a professional to get all those tax figures and deductions you need.
You should also consider how comfortable you are with doing your own taxes and whether or not you have the time to do them. If you decide to hire a professional, make sure you choose someone who is qualified and reputable. You can check the IRS website for a list of registered tax preparers in your area.
Lastly, keep in mind that tax preparation fees are a deductible expense, whether it’s a DIY filing or working closely with a tax professional or accountant.