After conducting a thorough review of online tax software, we recommend Intuit TurboTax as the best overall tax software for small businesses. We chose TurboTax from dozens of online tax software options. To understand how we chose TurboTax, you can look at our methodology and a list of online tax software vendors on our best picks page.
TurboTax is our best overall pick for tax software for small businesses because it combines some of the most powerful features we came across with an extremely thorough and accurate tax-filing process. It is also relatively easy to learn and use, which is a must-have for business owners who want to make short work of tax season without cutting corners or employing a professional. It also has free federal and state filing options for 1040EZ and 1040A filers.
Whether it's a hearty selection of filing forms or the addition of free state-return filing, TurboTax covers all the major bases. It maintains a database of 350 deductions and credits, and TurboTax runs an accuracy check before filing your taxes. The software is available online, for download or via mobile devices.
Interface and usability
TurboTax is incredibly easy to use and spares the user most of the complicated nuance of tax jargon and legalese. An easy-to-follow interview-style process takes you through six tabs — personal info, business tax, personal tax, state taxes, review and e-file — requesting pertinent information along the way. As you enter new data, TurboTax re-calculates both your federal and state refunds and displays them on a sidebar so you can see how each step affects your overall returns.
In addition, you can flag fields about which you're unsure, making it easy to come back to them later. Below that box, a notification tab keeps you apprised of any additional requirements or errors.
When the questionnaire is completed, the user reviews both refunds (the software will create your state return with the same information you entered for your federal taxes) and moves on to e-filing the forms with the IRS and state tax agency.
For any small business owner, the TurboTax Business tier is a must. The following features, which are all included in the business software, were the most comprehensive and useful that we came across in our search for the best tax-preparation software for small business. From managing multiple businesses to assistance in calculating asset depreciation, TurboTax goes above and beyond basic tax needs.
- Guided filing: The guided filing system makes preparing your taxes as easy as answering a step-by-step interview. The software does most of the heavy lifting and provides you with a preview of your expected refunds as you fill out the questionnaire.
- Filing forms: In addition to the scores of filing forms for every kind of incorporated business, TurboTax allows you to create unlimited W-2, 1099-MISC, 1099-INT and 1099-DIV forms for your employees, contractors and other business associates. TurboTax also includes a K-1 form for partnerships and trusts.
- E-filing: Your returns can be sent directly to the IRS at the end of preparation through a secure, encrypted channel. You will be able to track your returns and will receive confirmation when they are delivered.
- Rental assets: TurboTax Business includes a guided real estate and rental component that tallies income and expenses related to any rental properties you might own.
- Multiple businesses: A standout feature of TurboTax is that it allows you to manage tax preparation for multiple businesses in one place. It even covers businesses that are incorporated differently from one another.
- Direct deposit: You won't have to wait for a check by mail if you don't want to. Turbo Tax supports direct deposit of your refund into your bank account.
- Asset depreciation: TurboTax also includes an asset-depreciation feature that will track the depreciation of your large purchases year over year. Moreover, TurboTax will help you determine a specified tax strategy.
- W-2 snapshot: Take a photo of last year's W-2 if your income hasn't changed and upload the image to TurboTax. The software will do the rest. Snapshot saves you the tedious task of filling out all those fields manually.
TurboTax runs an accuracy check on every return to make sure the appropriate fields are filled out and the information makes sense. It will alert you if anything seems amiss before filing. The company guarantees 100 percent accuracy.
TurboTax will also cross-reference your tax information with 350 deductions and credits to make sure you receive any tax benefits to which you're entitled. And if you should be the target of an audit, you will also have access to the company's audit-support service.
We called TurboTax posing as a small business owner. Our experience was highly satisfactory. Not only were customer service reps informative and engaged, but they also went out of their way to make sure we were taken care of properly. We came away with a better understanding of the product and felt that their responses were tailored to the specific needs we explained for our fictional business.
TurboTax offers phone support, though the hours of operation vary from location to location. However, the company has robust support options, including live chat, email and a forum community on the website. TurboTax also boasts a wealth of educational materials, like tutorial videos and FAQs, which cover a wide range of questions and include most of the essential information.
The main drawback to TurboTax is that state filings are not included in the already higher-than-average price of $149.99. It will cost you $50 extra, but fortunately you can import all your federal information that's applicable to your state taxes as well. Overall, TurboTax is slightly more expensive, but we determined that its many useful features, simplicity and accuracy pay for themselves.
Already prepared to choose an online tax software? Here's a breakdown of the rest of our coverage: