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 find our methodology and a list of software vendors on our best picks page.
TurboTax is our overall pick for best tax software for small businesses because it combines powerful features 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 wanting 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 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 runs an accuracy check before filing your taxes. The software is available online for download and via mobile devices.
Interface and usability
TurboTax is incredibly easy to use and spares users complicated tax jargon and legalese. Its easy-to-follow program takes you through six tabs – Personal Info, Business, Personal, State Taxes, Review and E-File – requesting pertinent information along the way. As you enter new data, TurboTax recalculates both your federal and state refunds (or liability) and displays them on a sidebar so you can see how each step impacts your overall returns.
In addition, you can flag fields about which you're unsure, making it easy to return to them later. A notification tab also apprises you 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, which are all included in the Business version, were the most comprehensive and useful features we found in our search for the best tax preparation software for small businesses. From managing multiple businesses to assistance 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 refund or total tax due 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 return and 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 may own.
- Multiple businesses: A standout feature of TurboTax is that you can prepare taxes 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 it 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 ensure 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 have access to the company's audit support service.
We called TurboTax posing as a small business owner, and our experience was highly satisfactory. Not only were customer service reps informative and engaged, but they 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, it has robust support options, including live chat, email and a forum community on the website. There are also 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 $159.99. It will cost you $54.99 extra, but, fortunately, you can import all your federal information that's applicable to your state taxes as well.
TurboTax is slightly more expensive than other tax software applications, but we determined that its many useful features, simplicity and accuracy paid for themselves in the end. For self-employed users that don't require the business package, TurboTax offers a slightly less expensive self-employed tier for $114.99, with a $39.99 fee per additional state return.
Already prepared to choose an online tax software? Here's a breakdown of the rest of our coverage: