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Best Tax Software for Self-Employed: H&R Block

Best Tax Software for Self-Employed: H&R Block
Credit: H&R Block

After conducting significant research into online tax software, we recommend H&R Block as the best tax software for self-employed filers. We chose H&R Block from dozens of online tax software options for freelancers, independent contractors and companies incorporated as LLCs or partnerships. To understand how we chose H&R Block, you can find our methodology and a list of online tax software vendors on our best picks page.

We found H&R Block to be the most suitable software for very small businesses and self-employed filers. It offers an easy to learn and use platform coupled with access to personalized attention from H&R Block's tax professionals. While the software provides useful corporate income tax services, we specifically focused on its application for pass-through entities filing personal income taxes, like LLCs.

H&R Block was also among the easiest software applications to learn and use of the ones we reviewed. The need for a manageable learning curve is essential for the busy entrepreneurs, so H&R Block scored big points with its simplicity.

Moreover, H&R Block includes strong features and an array of filing forms. The software has federal taxes completely covered and offers generous state filing options. The system searches through a database of 350 deductions and credits to make sure you're really getting what you're owed, and it corrects any errors it comes across to ensure the accuracy of your filings. Users can either download the software or complete their filings online.

H&R Block is highly user friendly. The whole point of tax software is to simplify the process of filing taxes without having to turn to an accountant. H&R Block excels at making the filing process straightforward and easy to navigate; you don't need to be a tax professional to navigate it.

The main screen displays several tabs, including a Welcome screen, your Federal Taxes, State Taxes, an E-Filing tab, and Tax Planning. It also includes a sidebar that features your current federal and state return numbers, a help screen and a list of frequently asked questions.

When you begin filing your taxes, you are asked to complete a survey about life and work changes over the past year. You're also required to fill out personal information like your name, address and Social Security number as well as employer information. The software is secured with bank-level encryption, so your information will be protected.

From there, the software fills out the appropriate form and displays the results for your inspection. It corrects any errors it catches along the way as well.

Below are some of the most useful or impressive features that H&R Block has to offer. Each of these features work together to provide an automated tax experience that takes minimal effort from the user to produce an accurate tax filing. Here's a look at what this software can do:

  • Free imports: H&R Block can import your data from your W-2 or from other leading software, like TurboTax or Quicken, so you won't have to redo all that data entry if you're switching from another vendor.
  • Step-by-step filing: The software guides you through the filing process by displaying on-screen prompts in plain language. The instructions are easy to understand and follow and help keep you on the right track as you proceed.
  • Filing forms: The premium version (essentially required for businesses) includes support for itemized deductions, investment income, retirement income, self-employment income and rental properties. For businesses, these include corporate filings like Form 1120, pass-through filings like Form 1065 and nonprofits that require Form 990.
  • E-filing: Send your tax filings directly to the IRS through the software. Data sent through the program is encrypted and secure.
  • Free, unlimited tax advice: H&R Block comes with free access to a tax expert as well as free in-person audit support. Paid users can schedule a face-to-face meeting at one of H&R Block's 11,000 locations across all 50 states online.
  • Reporting assistance: This feature is available for managing income from capital gains, home sales and retirement assets.
  • Free storage: Archive your documents for later use, whether it's a personal accounting need or in the event of an audit.
  • Maximum refund guaranteed: If using another vendor's software results in a larger tax refund, H&R Block will refund any fees you paid to them for your tax return.

One of the most impressive aspects of H&R Block's tax preparation software is its accuracy. The software typically alerts the user when erroneous information has been entered, or when information is entered in the wrong field. The software was particularly effective at catching mistakes made by human error; it fared as well, if not better, than our other leading contenders. Confidence in your tax software is absolutely essential, so this was a big plus of H&R Block.

Beyond accuracy, H&R Block is thorough. It compares your tax filings a database of hundreds of deductions and credits to make sure you're getting everything you're owed. Beyond the automated assistance, users have access to the insights of a tax expert on staff at H&R Block for no additional cost. When you're not sure that everything is quite right or you just have general questions, there is a person prepared to offer you answers.

One of H&R Block's standout qualities was the level of customer service we experienced. The representatives we spoke with were highly engaged, knowledgeable and eager to answer our questions about the software. We were satisfied that H&R Block's customer service team was honest in their responses and largely helpful to us overall in our search for most suitable tax software for our hypothetical business.

Both customer service and technical support maintain live chat assistance on their websites as well as phone support that's available 24/7. In addition, H&R Block is one of the largest companies in tax preparation. With so many locations, odds are high that there is an office near you if you need in-person assistance.

For an additional fee, H&R Block offers tax audit services and assistance from tax professionals. If you're targeted for an audit, these additional services might prove especially useful.

One downside of H&R Block is that state business filings are not included for free. State filings cost an additional $29.99 for the free edition and $39.99 for the paid versions, which makes its total cost somewhat high. While the additional fee might be a surprise if you're not expecting it, the software remains relatively inexpensive for the level of service it provides.

Another limitation is that the import feature only supports the W-2, 1099 and previous year's data from other supported programs. Business tax filings will have to be redone through the software. Fortunately, filing step by step isn't a particularly long or strenuous process.

Already prepared to choose an online tax software? Here's a breakdown of the rest of our coverage:

Adam C. Uzialko

Adam received his Bachelor's degree in Political Science and Journalism & Media Studies at Rutgers University. He worked for a local newspaper and freelanced for several publications after graduating college. He can be reached by email, or follow him on Twitter.