Best Tax Software for Small Businesses in 2023

Are you hoping to tackle 2023 taxes like a champ? Small-business tax software can minimize tax season stress while maximizing your tax return. Our top tax software for small businesses is TurboTax, Intuit's popular tax-filing software, but it's not the only option. Check out Business.org’s picks for the year’s best tax software options below.

FreeTaxUSA’s appeal is obvious from its name alone: With FreeTaxUSA, you can file your federal taxes for free, and a state return costs just $14.99. The Deluxe upgrade adds a few features, like amended returns and priority support, for $7.99.

And the additional features you get for exactly zero dollars aren’t half bad either. For instance, the software lets you integrate previous tax return information, offers email-based customer support, and accounts for over 350 credits and deductions. But since the software is free, you’re still looking at fewer benefits than you’d get with Liberty Tax or H&R Block. As a result, FreeTaxUSA works best for freelancers and sole proprietors.

TurboTax is one of the most popular tax software options for a reason (well, several). For starters, the software walks you through every step of the tax-filing process, asking clear questions and pointing you toward often overlooked tax deductions. The clean interface speeds up tax filing, and TurboTax’s maximum refund guarantee gives you some extra peace of mind.

That said, the features and reliability definitely come with a cost—especially if you wait until the end of the tax season to file, when TurboTax’s prices tend to jump. Currently, TurboTax  Premium starts at $129 for federal taxes and $59 per state. If you’re a member of a partnership, S Corp, or C Corp, you’ll want TurboTax Business, which starts at $190 for federal plus $55 per state.

Sure, eFile.com’s low federal filing starting price is a perk—but where the software really soars is in state tax filings. Unlike big-name competitors like H&R Block and TurboTax, eFile.com charges one flat price for unlimited state tax filings.

So how affordable are we talking? Small-business owners should buy the Premium edition, which normally costs $37.49 for federal filings with state returns costing $22.49. With eFile.com, you can’t file a Form 1120 for corporations from the site. If your business is registered as a C corporation, you’ll need a different tax software provider. But smaller businesses score a solid value with eFile.

Seen Lady Liberty twirling a sign on a sidewalk recently? That’s Liberty Tax. Like H&R Block, Liberty Tax combines brick-and-mortar storefronts with online offerings—a great perk for new business owners who might want face-to-face help untangling tricky tax situations. Plus, Liberty Tax’s Tax Education School offers online and classroom tax courses. If you’re a brand-new business owner, these courses can help you gain tax know-how to save time and money the next time tax season rolls around.

If you’re self-employed, you’ll need Liberty Tax’s Premium plan, which starts at $85.95 for federal tax filing plus $36.95 per state.

H&R Block is a popular company with plenty of experience—it’s been around for over 60 years. And while it doesn’t offer the cheapest software, it’s a tad cheaper than TurboTax with all the same guarantees. H&R Block also has hundreds of locations all over the country. If you decide halfway through filing taxes that they’re too complicated to tackle on your own, you can always call your local branch and decide on next steps with a certified accountant.

H&R Block’s additional features include the following:

• Quick, easy integration of past tax return info (even if it’s from a competitor’s software)
• Free in-person audit representation if needed
• Live chat help with a tax professional (available at an additional cost)

H&R Block starts out a little cheaper than TurboTax: its software for self-employed business owners costs $84.95 for federal filing plus $36.99 per state filing. 

TaxAct is the Toyota Corolla of tax software: affordable, straightforward, and well-rounded. You can expect all standard features—plus a few bonuses—with the TaxAct software, including integration with previous tax data, one-on-one help from tax experts (over the phone), and accounting software integration.

As a solid middle-of-the-road option, TaxAct gives business owners options like accountant support without overwhelming you with the bells and whistles of more comprehensive (and more expensive) software. TaxAct helps you file a single federal return for $64.95. State tax returns cost an additional $44.95. Even larger businesses, like a C corporation or S corporation, pay the same cost.

We doubt most business owners would refer to tax season as a breeze. But with the right tax software, tax-filing season becomes less stressful for sole proprietors, employers, and freelancers alike. Instead of stressing about tax filing, let your software take the front seat while you spend more time doing what you love: focusing on your business.

Want a little more info on filing small business taxes before you dive into software? Check out our guide to filing taxes as a small business for even more tips.

Thanks to the government’s recent tax-filing extension, the tax deadline isn’t quite around the corner—but it’ll still arrive sooner rather than later. Whether you have or haven’t filed yet, we hope you’re in for a substantial return. But since tax laws vary drastically from state to state, the place you choose to set up shop can influence your business’s growth, success, and sustainability.

How? Well, for starters, seven of our top states lack a state income tax, and one, Tennessee, has just a 1% rate. Some, like Washington, are famous for their startup culture and tech friendliness; it’s practically a given that their tax laws would incentivize small business owners. Other winners, like South Dakota and Montana, are rural states where the cost of living is low—and so is the cost of starting a business, which makes the area enticing to small-business owners, individuals, and families alike.

In contrast, our lowest ranked states have notoriously high taxes and high costs of living, especially California and New York. The lack of tax deals might make them less appealing to business owners who are trying to make money, pay their employees, send in the rent check on time, and, you know, eat the occasional meal or two.

Of course, while location is crucial to your tax prospects, it isn’t the be-all and end-all of tax deals—or of business success. State business taxes often break down by industry, so you’ll want to do more research before planning your immediate move from Minnesota to Wyoming. Still, if tax deals are important to your business, give our top picks an extra look; a good tax bargain can nudge your business in the right direction.

To determine the best and worst states for business tax deals, we looked at four tax rates in each state:

• State income tax rate (weighted 40%)²
• Combined state and federal corporate tax rate (weighted 20%)³
• Combined state and local sales tax rate (weighted 20%)⁴
• Property tax rate (weighted 20%)⁵

We weighted each rate and assigned the states’ scores based on how high or low their tax rates were. Specifically, we normalized each measurement on a 0–1 scale with 1 as the measurement that would most positively affect the final score and 0 as the measurement that would most negatively affect the final score. These adjusted measurements were then added together with the weights mentioned above to get a score of out of 100.

Different business entities each use different tax forms—we’ll give you a quick rundown.

If you’re self-employed and your small business isn’t registered as a legal entity, you should fill out a Form 1040, which is your personal tax return. As part of your 1040, you’ll also need to complete the Schedule C portion, which allows you to report the income and expenses from your sole proprietorship. These same forms will also work if you registered your business as an LLC with you as the sole member.

Every member of a partnership, LLC, or S Corporation needs to fill out Form 1065 and a Schedule K-1. Each of these business organizations pass through business income to the owners or shareholders, so the members will need to account for those earnings under Schedule E in their personal income taxes.

Unlike the organizations above, C Corporations do not pass through income to the business owners. These businesses file their corporate taxes using Form 1120. If you’re a business owner, you should get a Form 1099 to inform you of the income you made from the business for your personal return.

Different situations require extra forms, like a Form 720 for excise taxes (necessary if you sell items like tobacco, alcohol, or gasoline) or Form 941 for taxes withheld from paychecks.

Given the immense liability involved in sending cash every year (or quarter) to Uncle Sam, we carefully analyzed each tax platform's data privacy practices, accuracy guarantees (if any), ease-of-use, ability to handle complex tax situations, value for the money, and other nuanced features.