A Comparison of 2018 Business Tax Preparation Software
Prepare your business taxes using TaxAct, H&R Block, or TurboTax
As a business owner, you might be considering online or desktop software if you prefer doing your own taxes. Three major tax software programs—TurboTax, H&R Block, and TaxAct—offer both online and desktop versions to prepare federal income tax returns as well as your state business tax returns.
What Forms Do You Need?
The software you need depends on your business type and the federal income tax forms you must file. You would file Schedule C along with your personal tax return if you're a sole proprietor or single-member LLC, so you'll need a tax software version that includes Schedule C.
You'll need tax software that includes Form 1120 if you're a corporation, or software that includes Form 1120S if you're an S corp. You'll need software with Form 1065 if you're a partnership or multiple member LLC.
What These Tax Programs Include—and Don't Include
All three major tax preparation programs offer options for businesses.
The programs will also prepare your personal taxes for the year if you purchase one to prepare Schedule C. Each of these returns calculates your self-employment tax (Schedule SE) and includes it in the appropriate sections of your personal tax return.
You'll might have to buy a separate program for your personal taxes if you purchase software for partnerships, corporations, or multiple member LLCs. These preparation programs don't always include personal tax return information, although the products can sometimes be bundled.
H&R Block for Business Income Tax Returns
H&R Block offers online tax preparation for small businesses with their Self-Employed version, including Schedule C and Schedule SE. The cost is $94.99 as of 2018, including one state return, but e-filing the state return is $19.95 extra. Each additional state return will run you $39.95.
This is one of the lower priced options out there. Of course, it doesn't include all the bells and whistles of some other software, but it does share many of the same features.
The software allows you to import last year's tax return from Quicken or TurboTax—something the other software providers don't do. The only real complaint with H&R Block is that it's not particularly user-friendly. Your options for entry of information can be a bit limited if you don't take them in a chronological order determined by H&R Block.
You can start your return for free. You don't have to pay up until you're ready to file.
The Premium version includes only Schedule C-EZ and no Schedule SE. You can use the Premium download version with both Windows and Mac, and the Premium version can be used for Schedule C filing.
The Premium & Business download version includes Schedule C, corporation, S corporation, partnership, LLC, and non-profit organization tax forms for $89.95, and you can prepare up to five federal returns. You can create payroll tax returns as well, a feature not offered by TurboTax or TaxAct. This is the only H&R Block program that will allow you to create and file W-2 forms and 1099 forms.
Perhaps the best perk associated with H&R Block products is that they offer more than 12,000 retail offices around the country. You can meet with someone in person to help you straighten things out if you run into a problem. A professional will review your return for accuracy if you request a Tax Pro Review online.
Unlimited business state returns are included, but state e-file is an additional fee. You can prepare your personal return on both the Premium & Business and Self-Employed editions.
TaxAct for Business Income Tax Returns
TaxAct is one of the least expensive options available. You'll need the Freelancer edition or the Sole Proprietor edition if you want to file Schedule C along with your personal tax return. The cost is $39 for the online version, but that doesn't include a state return. The download edition is $76, including one free state return.
The online versions of TaxAct products are available for Windows and Mac, but the download version is only available for Windows.
TaxAct doesn't have a version of its software that includes the ability to create W-2 forms and 1099 forms.
Business tax return products for 2018 are all $60 each: Form 1065 for partnerships, Form 1120-S for S Corporations, and Form 1120 for C Corporations. The cost includes only one return, with an additional cost for a state return. You can bundle these and save money if you have more than one type of business. A state return will cost an additional $37.
TurboTax for Business Income Tax Returns
TurboTax offers the most comprehensive software in both a Self-Employed edition and a Business Edition.
You have both online and CD/download options to file a Schedule C with the TurboTax Self-Employed edition. It costs $119.99 as of 2018, and this includes one state return. Additional state returns are $39.99, and if you want TurboTax to e-file a state return for you, that's $19.99.
The Self-Employed edition accommodates income generated from goods and services, as well as 1099-MISC forms. You can prepare and file both Schedule C and your personal return. There's even a version of the Self-Employed edition that's specifically designed for Uber and Lyft drivers.
Corporations, S corporations, and partnerships, including multiple-member LLCs, will need TurboTax Business, either the online or CD/download version. Forms for all business types are included. The cost is $169.99. State returns are $54.99. This software is pricey, but it will let you prepare up to five federal returns, not just one, and you don't pay until you're ready to file. You can work on your return free of charge until you get to that point.
One nice feature of this software is that you can import your business information from QuickBooks desktop versions, although not from QuickBooks Online. And TurboTax offers very good audit support for an additional cost.
You'll need the Home and Business version of TurboTax desktop or the online Self-Employed version if you want to use TurboTax to create W-2 forms and 1099 forms.
Keep in mind that all these prices can increase—and often do increase—as the tax deadline nears unless the software provider decides to offer a deal to drum up last-minute business.
Should You Do Your Own Business Taxes?
Even if you're able to purchase software to do your business taxes, the question still remains whether you should try to complete this task on your own.
You might think that it's not much of a challenge to do your own business taxes along with your personal taxes if you're filing a very simple tax return with Schedule C. Just don't forget that you must still calculate and pay self-employment taxes if your small business has a profit for the year. TurboTax will remind you.
You might want to enlist the help of a tax professional who's familiar with the appropriate type of return if you're faced with preparing a more complex business tax return for a partnership, multiple member LLC, or corporation.