Best Tax Software for Small Businesses in 2020

With a clear and comprehensive approach to tax filing, business owners can trust TurboTax to answer their questions and maximize their returns.

TurboTax is one of the most recognizable names in the business. But do the features live up to the hype? The answer is a decisive “yes,” but you will pay more for all those helpful features. Here’s what you get when you file with TurboTax:

• Error checks while filing and a double check of your finished return
• Maximum refund guarantee (or your money back)
• W-2 uploading through your company or by taking a photo
• Easy income and expense account importing if you have QuickBooks Desktop

TurboTax Self Employed starts at $120 for federal taxes and $50 per state, or you can pay $200 to get live help from a CPA to ensure you’re filing taxes correctly. If you have more than one or two employees, you’ll want TurboTax Business, which costs $160 for federal plus $50 for state filing.

TurboTax fits a lot of small-business needs, but this tax preparation software works especially well if you relate to any of the following:

• You have doubts about which deductions to claim for maximum profit.
• You worry about mistakes and want to cover any holes in your return.
• You want a streamlined system for your business to make the filing process easier and faster.

While all the extra features might be tempting, you may want to search other options if this matches your situation:

• You’re confident about which small-business tax deductions will apply to you, and
• You want to save money when filing.

TurboTax ticks a lot of boxes. It’s easy to use and helps you file quickly. The software’s user interface makes sense and guides you through the process smoothly—and if you still need help, one-on-one support will soon be on the way. And its guarantees (including a maximum refund guarantee) provide peace of mind that you’ll file taxes in a way that benefits your business most.

That said, the features and reliability definitely come with a cost. If you’re self-employed or freelancing, you could save some money with a cheaper service if you already know which tax deductions to claim. The more complicated your business is, the more attractive an option like TurboTax becomes.

For some small businesses, tax filing is a relative breeze, but not every business is so lucky. Maybe you have a lot of tough deduction decisions to make, or perhaps your company needs additional software for accounting or HR.

H&R Block is a popular company with plenty of experience—it's been around for over 60 years. And while it doesn't provide the cheapest software, but H&R Block reassures businesses that every expense and deduction is accounted for. Here are some of the benefits H&R offers:

• Quick, easy integration of past tax return info (even if it’s from a competitor’s software)
• Free audit representation if needed
• Chat help with a tax professional
• Partnership with Xero for day-to-day business accounting needs
• Extra assurance if you choose Tax Pro Review

Software costs for self-employed business owners starts at $79.95​ but can range up to $104.99 (state tax filing starts at $19.95). Additional resources like Xero or Tax Pro Review cost extra.

H&R packs plenty of features into its software, but do you need them? Consider H&R if your business checks off these boxes:

• You have a complex set of itemized deductions and expenses to deal with.
• You want to consult someone on some of your decisions.
• You think you might miss out on some of your deductions without help.

Consider a different option if your business matches this scenario:

• You have straightforward freelance or self-employment income.
• You want the cheapest filing option possible.

There are two major circumstances where H&R Block’s services will benefit your business. The first circumstance is if you worry whether your small business is maximizing every advantage possible. Thanks to online chats with professionals and the option for pros to sign off every last inch of your return, you can rest easy knowing that you did right by your taxes.

Second, H&R could work great if you are also looking for accounting support in addition to help with filing taxes. Through a partnership with Xero, you’ll have several accounting tools that should smoothly integrate with H&R Block when tax season comes around.

But some businesses might not use all those features—in that case, investing in H&R Block would just be throwing money away. If you know which deductions you can claim, or if your business just doesn’t have that many direct expenses, there are cheaper options for filing.

Why lean on experts when you can become the expert yourself? Liberty Tax’s Tax Education School, which offers online and classroom tax courses, is a unique feature that helps tax novices gain tax know-how.

Beyond their unique branding—if you’ve seen someone twirling a sign dressed as Lady Liberty on a sidewalk, it was likely for Liberty Tax—most of Liberty Tax’s features are fairly standard.

• Double-checking system to make sure your return checks out
• Multiple support options, including chat, email, or even in-person help
• Audit assistance if needed
• Online-to-office transition if you ever get stuck mid-filing
• Free tax education courses

If you’re self-employed, you’ll need at least the Deluxe edition, which usually costs $64.95—but thanks to Liberty Tax’s ongoing sale, all of its online tax filing products cost just $44.95. That includes the typically pricier Premium edition, which is perfect for S corporations.

Liberty Tax has reasonable prices and some standard features, but when does it make the most sense for your small business? Consider Liberty Tax if you relate to these factors:

• You want to take its tax education courses.
• You feel more comfortable with the option to meet face-to-face if needed.
• You don’t need many extra features.

On the other hand, consider looking elsewhere if either of these match your situation:

• You definitely want to file from your computer only.
• Liberty Tax’s unique features don’t benefit you.

Similar to H&R Block, Liberty Tax combines brick-and-mortar storefronts with online offerings. That combination might appeal to some small-business owners, especially anyone who is just starting out. For most people, face-to-face contact works best when working out a tricky tax situation. This makes the online-to-office filing transition especially appealing.

In contrast, if you don’t see yourself visiting in-store or attending the tax education courses, there might be better options at both lower and higher price points. Liberty Tax’s interface and features are pretty standard, and the price is average as well.

While eFile.com has a mixture of useful features, its quirky sense of humor and personable approach to taxes stands out.

Moving past the entertainment aspects of the site, eFile promises a lot of standard features. You can't file a Form 1120 for corporations from the site, but smaller businesses will score a solid value with eFile. Here are some of the features eFile offers:

• Calculator systems for quick estimates before you file
• A personally assigned “Taxpert” support agent
• Free audit assistance
• Unlimited state returns

Businesses will need to buy the premium edition for $34.49. If needed, the fee for unlimited state returns will be $21.00, which is pretty good—competitors like TurboTax charge you over $40 per state.

With a straightforward approach to pricing and a smaller price tag than other options, eFile.com is a compelling option for small-business tax software. Consider eFile if you relate to the following:

• You feel like some humor and diversions might motivate you to file.
• You aren’t sure what features you’ll even need from your tax software.
• You’d like to do some basic number crunching before you file.

On the other hand, consider another option if your business fits these descriptions:

• Your business is not a pass-through entity and needs to file Form 1120.
• You don’t like distractions.

You could benefit from eFile.com if you own a pass-through business, even if you don’t appreciate their more light-hearted approach to filing. Their pricing structure is direct and affordable, and several basic filing features are covered.

However, some might find the website unprofessional, and some of the pop-ups and menus make navigating the site difficult. Since you can’t fill out Form 1120 on eFile.com, you’ll need to find another option if your business is registered as a C corporation.

FreeTaxUSA’s appeal is obvious from its name alone.

If you know the price is right, the real question is whether FreeTaxUSA has the features you need to file properly. Here’s a rundown of what they offer:

• Over 350 credits and deductions accounted for
• Integration of previous tax returns, even from competing tax software
• Email-based customer support
• Tax return backup if you need to print old returns
• Chat support and audit assistance (with Deluxe edition)

You can file your federal taxes for free, and a state return will cost you $14.99. The Deluxe upgrade adds a few features, like amended returns and priority support, for $6.99.

With fewer features and less support than other small-business tax software, who can benefit most from FreeTaxUSA’s low cost? Consider FreeTaxUSA if the following describes your business:

• Your business is simple self-employment or freelance work.
• You want the cheapest filing option available.
• You need little to no support to fill out your tax forms.

On the other hand, consider shopping elsewhere if this matches your business:

• You need to file Form 1120 for a corporation.
• You plan on having lots of questions during the filing process.

FreeTaxUSA will work perfectly for freelancers and other people who file as sole proprietors. You don’t need to spend any extra money on unneeded features, and if you happen to be in a state without income tax, you might file absolutely free.

But this online filing service won’t work at all for more complex businesses. Many business tax forms are unsupported. FreeTaxUSA might also be a poor fit if you need help with questions as you file—its support options and help features aren’t top of the line.

TaxAct is the Toyota Corolla of tax software: affordable, straightforward, and well-rounded when it comes to the benefits it offers.

So what are those balanced benefits? You can generally expect all standard features—plus a few nice bonuses—with the TaxAct software.

• Integration with tax data from a previous TaxAct return
• Integration with accounting software that uses CSV format
• One-on-one help from tax and technical experts over the phone
• Bookmarks and alerts to help you navigate your return

TaxAct helps you file a single federal return for $109.95. State tax returns cost an additional $49.95. If you own a larger business, like a C corporation or S corporation, you’ll pay the same cost.

Consider TaxAct if these benefits appeal to you:

• You have a larger business but want a cheaper filing price.
• You want the comfort of one-on-one support with a tax expert.

On the other hand, consider an alternative option if you identify with these priorities:

• You value a range of additional features.
• You want a cheaper filing option for simpler businesses.

TaxAct is a great middle-of-the-road option for businesses who want a few extra features, such as tax expert support, for a reasonable price. If you or your business is already familiar and happy with TaxAct, you shouldn’t feel pressured to change.

If nothing about TaxAct immediately grabs you, your business might want to find an option that either offers more support and features, like TurboTax and H&R Block, or a cheaper price, like eFile.com and FreeTaxUSA.