A Comparison of 2019 Business Tax Preparation Software
Prepare your business taxes using TaxAct, H&R Block, or TurboTax
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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.
This article discussed prices and features for each tax software company, with a table to help you find the right software for your business.
Which Tax Form for Your Business
The business tax software you need depends on your business type and the federal income tax forms you must file.
Sole Proprietor. File Schedule C to report business income as part of your personal tax return .
Partnership. File Form 1065 to report and pay taxes for the partnership. Each partner receives Schedule K-1 for their share of partnership income, to file with their personal tax return.
Corporation or S corporation. 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 corporation.
Where's the Software Version for LLCs?
If you have an LLC, you may be wondering why tax prep software doesn't include an LLC version. That's because the IRS doesn't recognize the limited liability company as a tax entity, and it sets a default (normal) way for LLCs to pay federal income tax:
- A one-owner LLC normally files and pays income tax like a sole proprietor, so use the software version that contains Schedule C.
- A multiple-owner LLC normally files and pays income tax like a partnership, so use the software version for partnerships.
If your LLC has elected to be taxed as a corporation or S corporation, use this software version.
|Biz Tax Forms - Business Type|
|Business type||Owner business income report form||Corporate Tax Form?|
|Sole proprietorship||Schedule C, Form 1040||None|
|Single-owner LLC||Schedule C, Form 1040||None|
|Multiple-owner LLC||Schedule K-1, Form 1040||Form 1065- Partnership return|
|Partnership||Schedule K-1, Form 1040||Form 1065-Partnership return|
|S Corporation||Schedule K-1 for S corp owner, Form 1040||Form 1120S - S Corporation return
|Corporation||Dividend and capital gain income, Form 1040||Form 1120 - Corporation return|
Self-employment Tax and Business Tax Returns
All self-employed business owners (not corporate owners) must pay self-employment tax (Social Security and Medicare Tax) on the net income from their business for the year. If you are one of several owners of a business, the total net income is calculated first, then your part of that income is used for this calculation.
Self-employment taxes are part of your personal tax return; you won't find them on business tax returns. Self-employment tax from your business income is included with any Social Security and Medicare taxes withheld from any payments to you as an employee.
You will need to calculate the self-employment tax you owe for the year on Schedule SE.
Business Tax Software Companies
All of these tax preparation programs offer options for businesses, but the way they offer them differs. The business option might be an all-business one (in H&R Block, for example) or you might need to select a specific business type (in TaxAct). Here are three business income tax software options (in alphabetical order):
H&R Block for Business Income Tax Returns
H&R Block offers online tax preparation for small businesses with their Premium & Small Business Tax Software. This software includes S corporation, C corporation, partnership, and LLC returns.
The Download version for federal and state is $79.95 for unlimited business returns. The cost of one personal state return is free, but additional state programs are $39.95 each, and the cost for e-filing is $19.95 per state. The Download version is only available for Windows. It includes Schedule C, corporation, S corporation, partnership, LLC, and non-profit organization tax forms.
If you want to prepare and file your small business tax return online, H&R Block's "Self Employed Online version is $79.99 plus $36.99 for each state filed.
TaxAct for Business Income Tax Returns
Self-employed Taxes (Schedule C). For 2019 taxes for self-employed and freelancers, you can get the Self-employed+ edition (online). It's for self-employed filers, sole proprietors, and independent contractors. In addition to the main 1040 forms and schedules, it includes:
- Schedule C for your self-employment income and
- Schedule SE for self-employment tax.
This online version is $52.46 for one filing (personal return plus Schedule C and Schedule SE). State filing is an additional $49.95.
The download edition is called the Self-Employed Edition. It's available for $87.43 including one free state return. Be sure you have the self-employed version with Schedule C and Schedule SE.
Business tax-return products from TaxAct for 2019 are available at $109.95 each for:
- Partnership returns on Form 1065
- C corporation returns on Form 1120, and
- S corporation returns on Form 1120S.
State returns are additional at $49.95 per state.
The online and download versions of TaxAct products are available for Windows and Mac.
TaxAct offers tax return bundles: one personal return and one of the business returns for $200 each. For example, the 1065 (Partnership) bundle includes:
- Business 1065 and state, and
- TaxAct Self-employed (1040) and state, with
- one free 1065 federal e-file, one free 1065 state e-file and five free 1040 federal e-files.
Turbotax for Business Income Tax Returns
For Schedule C filers, TurboTax offers several options, based on your business type and whether you want online or download/CD.
The 2019 Turbotax Home and Business edition is the CD/download version for filing a personal tax return including Schedule C. The download version is available for both Mac and Windows. It costs $109.99 and includes one state download and 5 federal e-files.
The Turbotax Self-Employed edition is the online version, at a cost of $90 for one federal return, including a personal tax return.. State returns are $40 each. This version accommodates income generated from goods and services, as well as 1099-MISC forms.
The self-employed edition comes with QuickBooks Self-employed, an online accounting service for very small businesses, to track income and expenses for tax purposes. It includes ways to organize receipts with the use of a phone.
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 $159.99 for a federal return with free federal e-file. Each state filing is 49.99. 5 federal e-files included.
Creating Payroll Tax Forms
H&R Block includes two payroll tax features in its Premium & Business Tax Software version:
- Form 940 for federal unemployment tax return
- Form 941 - Employer's Quarterly Federal Wage and Tax Report
- W-2 Forms - Annual Wage and Tax Reports - for employees, and
- Form 1099-MISC and other 1099 forms for non-employees and other payees.
Turbotax Home & Business allows you to create W-2, 1099-MISC, 1099-INT, 1099-DIV and K-1 forms. You can import your business information from QuickBooks desktop versions. Turbotax has a special website for "Quick Employer Forms" to help you prepare W-2s and 1099-MISC forms (you must sign in to your account first).
TaxAct doesn't have a version of its business tax software that includes the ability to create W-2 forms and 1099 forms.
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.
All of the companies featured in this article offer online support, but be careful about taking online advice. Complicated business tax questions should only be answered by CPAs or Enrolled Agents.
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.
IRS. "Sole Proprietorships." Accessed Dec. 16, 2019.
IRS. "Instructions for Schedule C." Accessed Dec. 11, 2019.
IRS. "Partnerships." Accessed Dec. 16, 2019.
IRS. "Forming a Corporation." Accessed Dec. 16, 2019.
IRS. "Instructions for Schedule SE." Accessed Dec. 15, 2019.
H&R Block. "Premium & Business Download." Accessed Dec. 15, 2019.
H&R Block. "Self-Employed Online." Accessed Dec. 15, 2019.
Taxact.com. "TaxAct Online 2019 Self Employed+ Edition." Forms tab. Accessed Dec. 15, 2019.
TaxAct. "TaxAct 2019 Self Employed Edition." (Download version). Accessed Dec. 15, 2019.
TaxAct. "Home and Business Bundles." Accessed 12/15, 2019.
TurboTax. "Which TurboTax CD/Download product is right for you?" Accessed Dec. 16, 2019.
TurboTax. "TurboTax Business." Accessed Dec. 16, 2019.
H&R Block. "Premium & Business Tax Software." Accessed Dec. 15, 2019.