Need help organizing and computing small business taxes? As a small business owner, managing finances is one of the most difficult jobs, and when issues get to taxes, things get even more complicated.
Fortunately, the correct tax software virtually helps you breeze through this daunting task, giving you more time and decreasing errors.
This article will cover the best tax software for small businesses in mind, enabling you to choose the one that suits your business most aptly.
Whether it is a freelancer, a startup founder, or someone who runs a small shop, these tools can turn the taxation process from a nightmare into a smooth one. Let’s dive in!
Benefits of Using Tax Software for Small Business
Improved Accuracy
Tax programs, including updatable processes and the newest tax schemes, thus help slash user mistakes with the calculation. That helps to eliminate human errors, which can happen with outdated information and handmade calculations.
Usually, the software has built-in algorithms that might pinpoint errors or missing details, making sure that the tax returns are put to the test.
Time Savings
Tax preparation software is beneficial in several ways, one of which is time savings. The software is getting involved in the process of organizing financial records through the calculation of the tax and the filling out of the tax forms.
It may be able to reproduce the data (for instance, the company name and address) that commonly needs to be stated and then transfer the data to the next required form (for instance, the previous or last return), which will obviously save effort and time.
Cost Efficiency
Managing expenses is of key significance for small businesses. Tax software is approximately the lowest-cost option in comparison to a professional tax preparer’s service fee.
The software cost or subscription suddenly takes place, but that ultimately will bring savings, especially for businesses with modest financial affairs.
Ease of Use
Tax software can be as friendly for those without experience in finances or tax law as it is for those with this background.
A lot of tax programs assist in filling out the tax form by leading the user through simple language and giving helpful tips and explanations. These software products are designed to ensure the user’s better understanding and comfort.
Access to Tax Deductions and Credits
The tax software can also help business administrators identify the missing tax deductions and credits that they may not be aware of. Ensuring that all tax-deductible expenses are recorded enables firms not to lose a single penny of claimed deductions and to maximize deductions claimed against their corporate tax liability.
Learning how to categorize and reconcile business transactions is a critical element of this program. It is especially useful for small business owners who may have limited knowledge of tax law.
Enhanced Security and Compliance
Utilizing the mentioned tax software helps to ensure that business information concerning finances is secure and that tax filings are done appropriately. This avoids penalties as the filings are compliant with government regulations.
In addition, a team of software and online filing solutions will keep track of historical filings and help companies stay in compliance throughout the years.
ALSO READ: Best Invoice Automation Software Solutions
How do you choose the right tax software for small businesses?
Assess Your Needs
Starting with an evaluation of your particular needs is a good idea. Take into account the size of your business, the level of financial complexity, and your accounting experience.
If you are working with multi level income streams or running enterprises with a large number of employees in different states, you may think of it as an investment and get more sophisticated software.
Features and Functionality
Software has various features; therefore, identify software with the specific features you require. Core features may consist of logging and segmenting income and expenses, curtailing the applicable deductions, and filing the return form.
The growing features could support payroll processing, inventory management, and multi-state operations. Besides, look for software compatibility with tax statements requested by the specific tax authority.
Ease of Use
Tax software that is best for your business should have a user-friendly interface and a functional conception.
When you are not IT savvy, software that tries to ease the process can be a great help for you, especially if it comes with clear directions and features such as automation.
Security
With personalized financial data being the same, software tax needs have strong safeguards that must not be neglected. Find software that provides encryption, secures data storage, and meets data protection rules.
Cost
Tax software can start for free for simple tax situations and cost more to furnish the necessary features of an advanced professional.
Determine your budget and then see how it will bridge the gap between the estimated time and cost savings from the software.
Customer Support and Resources
The right customer support may become the key, even if you encounter tax matters of different complexity or a software issue.
Enquire about the availability options, such as calling, emailing, or chatting live in real time. Furthermore, videos and forums, along with lessons and webinars, are extremely valuable.
14 Best Tax Software For Small Business
1. Intuit QuickBooks Online
Intuit QuickBooks Online is a top cloud-based accounting solution that meets the needs and preferences of SMBs (small and medium businesses). It provides easy management of financial duties, which include making invoices, engaging in payroll management, capturing and tracking expenses, and financial reporting.
The consequence is that useful information will be exchanged on time, and the possibility of making mistakes will be minimized. Its strong functions that offer automated bank feeds, tax computations, and integration with multi-third-party software can help to improve efficiency and can be applied in pursuit of further growth as business needs increase.
Top Features:
- Automated financial reporting
- Invoicing and payments
- Expense tracking
- Payroll processing
- Tax estimation and deductions
2. TurboTax Business
TurboTax Business is developed for easier tax preparation for not only huge but also medium-sized enterprises. This software further reduces the hassle of business taxes for small firms by providing the tools necessary for filing corporate, partnership, and LLC income tax returns, as well as ensuring compliance with the latest tax laws.
Provides an easy user interface that directs users through their filing tax tax process using step-by-step instructions in order to result in accuracy and avoid overpayment.
The device is proven to be most famously used by business enterprises due to the feature that it has of checking errors, which in turn lowers the possibility of an audit.
Top Features:
- Step-by-step guidance for tax filing
- Automatic identification of industry-specific deductions
- Creation of W-2 and 1099 forms
- Audit risk identification
- Integration with QuickBooks
3. H&R Block Premium & Business
H&R Block Premium & Business helps sole proprietors with personal and business-related tax preparations and is designed specifically for entrepreneurs.
This software package is tailor-made for supporting diverse forms of business documents that may be used by different organizations, including corporations, partnerships, S Corps., LLCs, nonprofits, and estates. It computed and sorted complex tax situations, like itemized deductions, depreciation, and payroll expense reporting. Besides, H&R Block clients can count on professional support.
Top Features:
- Personal and business income and deductions filing
- Real-time audit risk detection
- Expert support
- Data import from other tax tools
- Comprehensive reporting tools
4. TaxAct Business
The TaxAct Business was designed to provide small businesses with a convenient way of doing their own payroll and tax preparation. It covers all tax forms that corporations typically use, including those of S-corps, C-corps, partnerships, and LLCs. In line with this, TaxAct is known for its simple pricing and the powerful suite of tools that flag errors, maximize write-offs, and engage in year-round planning.
In addition to the platform, educational materials are also provided with the aim of addressing complex tax issues as well as explaining other financial topics. If businesses need some chat with a tax specialist or elaborate customer service, TaxAct brings all these options to the client.
Top Features:
- Graduated guidance for filing
- Enhanced depreciation tools
- Year-round planning resources
- Data import capabilities
- Detailed tax and financial reports
5. Xero
Xero is a cloud-based financial management software designed to fulfill the accounting needs of small to medium-sized enterprises. It is unique in its sophisticated nature and ease of use. Through a single interface, it can implement multiple accounting tasks, including invoicing payroll and inventory management, while at the same time giving real-time updates on the financials for any device connected.
Top Features:
- Real-time financial data
- Automatic bank feeds
- Inventory management
- Multi-currency support
- Payroll integration
6. Wave Accounting
Wave Accounting provides cutting-edge, budget-friendly software designed mainly for independent contractors, individual owners, and small startups. Its distinctive selling proposition is its free accounting tools, which contain key features such as invoicing, expense tracking, and financial reports.
When it comes to providing extra-paid services such as credit card payments and payrolls, which integrate with the bookkeeping solution offered by Wave, the company generates revenues. This platform is liked for its easy-to-use interface that allows even people who are not accountants to understand how it operates. Wave allows small business owners to not pay for them to track their financial health by using expensive software.
Top Features:
- Free accounting tools
- Unlimited bank and credit card connections
- Invoice and transaction management
- Payroll services
- Receipt scanning
7. Zoho Books
Zoho Books describes an accounting system designed with the needs of businesses ranging from small to medium enterprises in mind. It helps with the control of sales, purchases, inventory, and customer relations through a user-friendly navigation interface. Through real-time notifications and financial reports, business managers can easily make the right decisions in no time at all.
Zoho Books, which supports several currencies and works best when integrated within the Zoho stack, gives rise to increased productivity as it integrates across CRM, ownage, and more. Furthermore, it automates processes, like monthly bills and prompt payment reminders, until the money is in your bank account.
Top Features:
- Automated workflows
- Custom invoicing
- Time tracking
- Inventory management
- Client Portal
8. FreshBooks
FreshBooks is an accounting program based in the cloud meant mainly for freelancers and small business owners, trying to inculcate simplicity and automation.
It is outstanding in wide areas like invoicing, time tracking, and project management, as users are able to send professional invoices and receive their money faster.
The platform eliminates such communication obstacles due to its good integration with clients as well as team members, and consequently, they become more transparent and efficient.
Additionally, FreshBooks presents clients with meaningful reports that help them understand their business expenses and profits, making their decision-making smarter.
Top Features:
- Customizable invoices
- Expense tracking with receipt scanning
- Time tracking
- Project management features
- Client retainers
9. Gusto
Gusto offers full-service HR and payroll software, with bundled benefits earmarked for different sizes of organizations, from small to medium-sized businesses. It automates payslips, tax returns, and HR functions such as new hire reporting and timesheet tracking.
Another aspect of Gusto that makes it unique is its professional HR help and consulting, which is quite important for the legality of the workforce.
The elegance of the platform’s design and commendable customer service make it an attractive choice for businesses that would like their HR operations to be made manageable and their primary activities to remain the focus.
Top Features:
- Full-service payroll
- Employee benefits management
- Compliance management
- Time tracking
- HR tools
10. Sage Business Cloud Accounting
The flexibility in the cloud accounting steps of Sage Business Cloud Accounting and the process of growing the accounting are the reasons for this accounting to be a scalable accounting solution for small to medium-sized enterprises. It helps with a massive range of functions, such as invoicing, expense management, forecasting, and tax management processes.
The software is made to grow with business, adjusting to it with advanced features like multi-user access and inventory management that you require. The cloud-based system of Sage guarantees that financial data is accessible no matter when or in any place that any business needs, leading it to be agile and informed.
Top Features:
- Cloud-based invoicing and expense management
- Cash flow forecasting
- Multi-user access
- Compliance management
- Integration with popular apps
11. Kashoo
Kashoo is a simple and straightforward accounting solution that you can do anywhere using your favorite mobile device or computer. It is made for small businesses and their owners.
It provides the main capabilities that solve simple but complicated financial tasks, such as invoice creation, tracking expenses, and reporting, all of which are managed through a very simple and easy-to-use interface.
Among the many incentives Kashoo offers is a live update dashboard, which mirrors the situation of a given business’s financial wellness.
Top Features:
- Simple interface for accounting tasks
- Multi-currency support
- Automated bank feeds
- Tax remittance tools
- Comprehensive financial reporting
12. Patriot Software
Patriot Software is a great solution for small companies because it is designed to be a complete, easy-to-use payroll and accounting software for these organizations. Its payroll tool stands out in this regard with its automation for payroll tax administration and simplicity for users, as well as a low cost for access to the whole service.
Patriot Software comes with a wide range of basic yet useful tools for tracking expenses and income, generating invoices, and creating monthly reports to handle the day-to-day accounting needs of the business.
Top Features:
- Affordable full-service payroll
- Employee self-service portal
- Time and attendance tracking
- Tax filing assistance
- Simple setup and use
13. Bench Accounting
Bench Accounting combines sophisticated software with reliable service in order to supply not only all the bookkeeping assistance that can be needed but also an effortless and intuitive platform.
These services are designed as a way for small business owners who need to fully outsource bookkeeping services. The company matches its customers with CFOs who are able to offer monthly financial statements and support clients in filing their tax returns on an annual basis.
The platform itself can be used easily, giving business owners a chance to access their business financial data at any time. In addition, the owners will use the platform to oversee the performance of their organizations.
Top Features:
- Personal bookkeeper and financial team
- Monthly financial statements
- Year-end tax preparation
- Expense tracking
- Visual financial insights
14. FreeAgent
FreeAgent is an overall cloud accounting application made in a way that accurately suits the business needs of sole traders, small businesses, and consultants. It consists of a one-stop shop where its users can handle business invoices, expenses, time tracking, and projects.
FreeAgent also features the inbuilt tax aspects, like the tax forecast and filing reminders, which assist the users in complying with tax demands. You can think of the FreeAgent dashboard as the pinnacle of its functionality.
There you will find your actual cash flows and the profit margins of your projects. Also, it facilitates multi-currency invoicing, which is good for businesses with global customers.
Top Features:
- Dashboard financial overview
- Time tracking and invoicing
- Expense management
- Project management
- UK-specific features like VAT and Self Assessment
Pro Tip: Managing payroll taxes can be a complex task for small businesses. While tax software takes care of filing and calculations, some HR software options integrate seamlessly with them. This can streamline processes like employee onboarding, automatic tax withholding, and generating accurate tax reports. Consider exploring ‘Best HR Management Software‘ for tools that can integrate with your chosen tax software.
Ending Note
Selecting the proper tax software for small business may be the key to smooth financial outcomes and efficient bookkeeping. Ranging from the paid, large-range features offered by QuickBooks Online and TurboTax Business to the specialized and user-friendly tools found in Wave and FreshBooks, all of these platforms come with distinctive advantages.
Analyze your own business conditions, the funds you can use, the specific features of each software, and make the right decision. Give yourself the power to use the tools that you need and keep them from becoming a big hassle during tax season.
FAQs
What factors should I consider when choosing tax software for a small business?
Seek tax software that has a comprehensive set of tax forms, links to an accounting system, functionality for checks and errors, and an option for e-filing with the IRS. Another set of valuable capabilities is tax calculation assistants, different business entity support, and the ability to contact tax professionals.
How can tax software save hours for small-business owners?
The software for the tax automates calculations, organizes data clearly, and ensures compliance with recent tax laws on a daily basis. Several programs incorporate functions that draw data straight from your account system, which lightens the load of manually keying in the data and, in turn, improves accuracy.
What kind of service will tax software vendors provide?
The best accounting software providers would be those that offer round-the-clock support, which includes video tutorials, user guides, and advice from experts for complex queries. Help can be provided by various means of support, which may include live chat, emails, phones, and help articles within the product.
