As a small business owner, you have plenty of things to think about while running your venture. Taxes are incredibly important, but the tax codes for your state and federal government shouldn't take up too much mental bandwidth once tax season begins. Picking the right piece of tax software can make preparing and filing your annual business taxes less of a hassle.
After testing multiple online and downloadable options, we recommend Intuit TurboTax as the best overall tax software for small business. From its ease of use to its range of features, we believe TurboTax gives small business owners the tools they need to properly file their 2018 taxes.
To understand how we chose TurboTax, you can find our methodology and a list of software vendors on our best picks page.
Over the years, TurboTax has remained a top name in the tax software sector for several reasons. For small businesses, Intuit's offering boasts robust features and promises to help users accurately file with the IRS on a yearly basis. Using the software's online interface is simple, so even if you don't have a degree in finance or haven't read the federal tax code's thousands of pages, you can still file your taxes. All you need is a computer or mobile device.
Along with TurboTax's ease of use, Intuit's software also gives its users peace of mind by maintaining a database of more than 350 deductions and credits. The program seeks out any relevant deductions and credits to help you get the largest tax return possible. Once complete, TurboTax runs an accuracy check before sending forms off to the IRS. In the event of an error or omission, things can get especially difficult for businesses, so being able to double check your filing is a major bonus.
Interface and Usability
During our testing, we found TurboTax to have an easy-to-understand interface. Each prompt through the entire process was easy to read, and information was displayed without forcing you to decipher complicated tax jargon or legalese. You answer a series of interview-like questions, and the software automatically inputs your answers into a relevant tax document. If you've previously used the software, your previous years' returns are automatically transferred to the new return.
As you go through the program's easy-to-follow process, you will go through five tabs: My Info, Federal, State, Review, and File. As you fill out each section, TurboTax recalculates how much of a refund will come from the federal or state government.
At the end of the tax filing process, TurboTax lets you review both your state and federal returns before moving on to e-filing them with their respective tax agencies. The software generates both returns based on the information you provided.
While Intuit offers four tiers for its TurboTax software, small business owners should really only look at the TurboTax Self-Employed package. The following features, which are all included in the Self-Employed version, were just some of the features we found. From managing retail assets to helping you calculate asset depreciation, this tier of TurboTax goes beyond basic tax needs.
- 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 estates 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.
- 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 tracks the depreciation of your large purchases year over year. Moreover, TurboTax helps 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.
- Cryptocurrency transaction support: It wasn't too long ago that cryptocurrencies like bitcoin and Dogecoin were breaking records on the open market. While those days are largely gone, that doesn't mean the crypto concept isn't going to be taxed by the government. This year marks the first time TurboTax helps users report any gains or losses from trying to play the cryptocurrency gamble.
- Support for startups: This year's edition of TurboTax gives newly minted entrepreneurs tax assistance by helping you find deductions related to new, small business.
Like many other programs, TurboTax guarantees their software will be 100 percent accurate. With so much riding on the accuracy of a person or business's taxes, it's important that everything comes out right. To that end, TurboTax runs an accuracy check on every return to make sure everything is accurate. Anything irregular generates an alert.
If a TurboTax filing is inaccurate, the company will pay any IRS or state penalties accrued thanks to its "100% Accurate Calculations Guarantee." Other guarantees and assurances surrounding accuracy can be found on the company's website.
Throughout our time with TurboTax, the support we received in our interactions with customer service was excellent. Posing as a small business owner, we asked a series of tax- and software-related questions that were quickly and clearly answered by the customer representative on the other line. Representatives were informative and attentive to our needs. 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. Other support options, like e-mail and a forum community of experts, are also available. Tutorial videos and FAQs are also located on the company's website and help explain common issues.
While TurboTax is our pick for small businesses, there were some issues that cropped up in our testing – the biggest of which is the pricing. If you want to use their software as a small business, we already suggested picking the TurboTax Self-Employed tier. While that option is the best fit for small businesses and entrepreneurs, it's also among the most expensive options at $119.99. State taxes are not included in that price, with each state filing coming with a $39.99 price tag.
Despite the higher cost, we still find TurboTax to be an exemplary offering for small business owners because of its many useful features, simplicity and accuracy.
Already prepared to choose an online tax software application? Here's a breakdown of the rest of our coverage: