Small businesses need reliable tax software to handle compliance, track expenses, manage payroll taxes, and process deductions. Mistakes can lead to lost deductions, penalties, or IRS audits.
Key expenses to monitor include office supplies, travel, and wages. Payroll taxes and withholdings add complexity, requiring software that stays updated with federal and state regulations.
Efficient tax software automates calculations, tracks deductions, and integrates with accounting tools like QuickBooks and Xero, allowing business owners to stay tax-compliant while focusing on growth.
Key Takeaways
- Small businesses need tax software that supports deductions, payroll integration, and multi-entity filing.
- Features like automated expense tracking, real-time tax calculations, and e-filing streamline tax management.
- Cloud-based solutions offer secure storage, accessibility, and compliance updates to meet changing tax laws.
- Pricing varies based on features, with some offering tiered plans for different business sizes and needs.
- Choosing software with strong customer support, audit assistance, and reporting tools helps businesses manage taxes efficiently and avoid penalties.
Essential Features to Look for in Small Business Tax Software
The right tax software makes tax filing easier, reduces mistakes, and helps stay compliant with IRS regulations. The right features will guarantee correct reporting while maximizing deductions and allowing you the required alternative to later streamline financial management.
Expense & Deduction Tracking
Small businesses have a plethora of deductible expenses, from office supplies to travel and marketing to equipment purchases. Tax software that automatically tracks expenses allows business owners to categorize transactions into deductible business expenses and generate reports.
Payroll & Employee Tax Compliance
For businesses with employees, payroll taxes, wage reporting, and tax withholdings can get pretty complicated. Tax software with payroll features will accurately calculate the respective federal, state, and local payroll taxes, all the while generating W-2 and 1099 forms.
A Seamless Integration with Accounting Software
Many small businesses leverage accounting tools such as QuickBooks, Xero, or FreshBooks to manage their finances. Choosing tax software that integrates seamlessly with these platforms allows the user to eliminate redundant manual data entry, ensuring reporting accuracy and that tax calculations are sound.
Multi-Entity Support
Tax obligations vary by business structure—sole proprietorships, LLCs, S-corporations, and partnerships each require different IRS forms. Tax software with multi-entity support ensures compliance by providing the right forms, such as Schedule C for sole proprietors, Form 1120 for corporations, and Form 1065 for partnerships.
Top Tax Software for Small Businesses in 2025
| Tax Software | Best For | Key Features |
|---|---|---|
| TaxSlayer Self-Employed | Freelancers & contractors | Affordable, supports 1099s & deductions |
| Xero Tax | Accounting software users | Seamless integration with Xero, tax reports & calculations |
| TurboTax Business | LLCs & Corporations | QuickBooks integration, deduction tracking, payroll support |
| H&R Block Business | Small business owners | Expense tracking, audit support, step-by-step guidance |
| FreeTaxUSA Business | Cost-conscious filers | Free federal filing, low-cost state returns |
TaxSlayer
TaxSlayer
- Pricing: Starts from $27.95
- Federal Filing: Starts at $0 – $59.95
- Best For: Self-employed and freelancers
TaxSlayer is Best For
TaxSlayer is a tax preparation software designed for individuals and small business owners seeking an affordable and user-friendly solution for filing their taxes. It offers a range of features to accommodate various tax situations, ensuring accuracy and maximizing refunds.
Pricing & Fees of TaxSlayer
TaxSlayer provides multiple pricing tiers based on the complexity of tax returns:
- Classic – $27.95 for all tax situations, covering all IRS forms, credits, and deductions.
- Premium – $49.95, includes all Classic features plus priority support, Ask a Tax Pro, and live chat.
- Self-Employed – $59.95, tailored for freelancers and business owners with additional support for 1099 and Schedule C filing.
State returns are an additional $42.95. Prices are subject to change and may vary based on promotions.
Overview of TaxSlayer
TaxSlayer simplifies the tax filing process with an intuitive interface that guides users through each step. It supports a wide range of tax situations, from simple W-2 income to complex self-employment income, ensuring users can accurately report their financial information.
The platform offers various support options, including access to tax professionals, to assist users throughout the filing process.
Why I Choose TaxSlayer
TaxSlayer stands out for its affordability and comprehensive features. Unlike some tax software that charges extra for certain forms or schedules, TaxSlayer’s Classic edition includes all necessary forms for a flat fee.
The platform also offers robust support options, such as the Ask a Tax Pro feature, providing users with access to tax professionals for personalized assistance. Its user-friendly design and commitment to maximizing refunds make it a compelling choice for a wide range of taxpayers.
Key Features of TaxSlayer
Ask Tax Pro for unlimited support
TaxSlayer offers access to tax professionals through its Ask a Tax Pro feature, providing personalized guidance. Users can get answers to complex tax questions, ensuring accuracy and compliance with IRS rules.
Comprehensive tax filing
TaxSlayer supports all major IRS forms and schedules, making it suitable for a variety of tax situations. Whether users have W-2 income, self-employment earnings, rental properties, or investments, the platform ensures they can file accurately.
Maximum refund guarantee
The platform helps users claim every deduction and credit they qualify for to maximize their refund. TaxSlayer guarantees that users will receive the maximum refund possible, or their filing fees will be refunded.
Integrations of TaxSlayer
TaxSlayer offers several integrations to enhance the tax preparation experience. Here’s a breakdown of its key integrations:
- Accounting & Financial Management Integrations – QuickBooks Online, TaxDome
- Tax Document Management – Form8949.com
Customers of TaxSlayer
TaxSlayer serves a diverse clientele, including individual taxpayers, self-employed professionals, and small business owners seeking efficient tax preparation solutions. While specific client names are not publicly disclosed, TaxSlayer has garnered positive feedback from numerous users.
Pros & Cons of TaxSlayer
| Pros | Cons |
|---|---|
| Affordable pricing for all plans | Limited features for complex returns |
| User-friendly interface | Extra fees for state filing |
| Free federal tax filing for simple returns | Fewer in-person support options |
| Strong customer support options | |
| Quick & accurate tax calculations |
Final Thoughts
TaxSlayer is an excellent option for individuals and small business owners seeking affordable, comprehensive, and user-friendly tax preparation software. Its range of features, competitive pricing, and robust support options make it a strong contender in the tax software market.
While it may lack in-person support, its online resources and access to tax professionals provide ample assistance for most users.
Xero Tax
Xero Tax
- Pricing: Starts from $35
- Best For: Accounting software users
Best for
Xero Tax is an advanced tax preparation solution designed for accountants, small businesses, and corporations looking to have a smoother filing experience. Its seamless integration with Xero’s cloud accounting software helps businesses manage taxes, financial reports, and compliance from a single platform.
Xero Pricing
Xero offers a range of pricing plans tailored to meet the diverse needs of businesses. Here’s a breakdown of their current offerings:
Ignite Plan
- Regular Price: $35 AUD per month
- Promotional Price: $3.50 AUD per month (valid until 28 February 2025)
Grow Plan
- Regular Price: $70 AUD per month
- Promotional Price: $7 AUD per month (valid until 28 February 2025)
Comprehensive Plan
- Regular Price: $90 AUD per month
- Promotional Price: $9 AUD per month (valid until 28 February 2025)
Ultimate 10 Plan
- Regular Price: $115 AUD per month
- Promotional Price: $11.50 AUD per month (valid until 28 February 2025)
(*Prices are in AUD and include GST. Promotional pricing is available to new Xero subscribers in Australia who sign up by 28 February 2025. At the end of the promotional period, standard rates will apply. Xero reserves the right to change pricing at any time.)
For more detailed information and to choose the plan that best fits your business needs, visit Xero’s official pricing page.
Overview of Xero Tax
Xero Tax allows for effortless preparation of taxes and electronic lodgment necessary for the ideal accountants and businesses handling multi-client responsibilities. This feature helps automate tax calculation, create compliance-ready reports, and seek accurate tax lodgments.
With cloud functionality, you can prepare and file tax return forms directly with tax agencies, thus eliminating hard work and guaranteeing conformity with exact regulations. The built-in collaboration further allows accountants and business owners to review tax details in real-time, thus streamlining the workflow for tax preparation.
Why Choose Xero Tax
Xero Tax is a powerful, cloud-based tax solution that fits naturally with Xero Accounting and various other financial instruments. Differently from a live system, it enables automated tax filing, along with the ability to lodge and complete forms directly, giving client data a smooth transition from financial records into the software.
Multi-entity support allows businesses and accounting firms to manage tax obligations across multiple clients or business structures, from sole proprietorships to partnerships and LLCs to corporations. Its compliance-first approach to help ensure that tax filings comply with the latest regulations decreases the risk of mistakes or audits.
Xero Tax Features
Seamless Integration with Xero Accounting
Xero Tax integrates natively with Xero’s accounting system, enabling companies to retrieve financial information automatically, minimizing errors and automating tax reporting.
Automated Tax Compliance & Electronic Lodgment
The tax software creates tax forms, computes liabilities, and lodges returns electronically to tax authorities, guaranteeing correct and compliant filings.
Multi-Entity Support for Businesses & Accountants
Xero Tax accommodates sole proprietors, partnerships, LLCs, and corporations and is thus well-suited to tax professionals handling multiple business clients.
Integrations of Xero Tax
Xero Tax integrates with other financial management and accounting solutions to offer a smooth tax preparation process:
- Accounting Integration – Fully integrates with Xero Accounting for real-time access to financial data.
- Tax Agency Portals – Electronic lodgment directly with government tax agencies for quick and compliant lodgment.
- Document Management – Upload and store tax documents for simple audit preparation and review.
Customers of Xero Tax
Xero Tax is utilized by a diverse range of companies across various industries. Here are some notable examples:
- Visual Contrast: An art and design studio aiming to make art accessible. xero.com
- Xendoo: A financial services company providing online accounting and bookkeeping solutions. xero.com
- Good Wood: A company dedicated to building equitable businesses. xero.com
- Frogtown Brewery: A Los Angeles-based brewery along the LA River. xero.com
- Take Tiny Action: A business emphasizing the impact of small, consistent actions. xero.com
- Butter&: A company known for its unique approach to business and confections. xero.com
- Olive and Poppy: A business inspired by wine country, creating related gifts. xero.com
Pros and Cons of Xero Tax
| Pros | Cons |
|---|---|
| Seamless integration with Xero Accounting | Custom pricing may not suit small businesses |
| Cloud-based access for real-time collaboration | Best suited for businesses already using Xero |
| Automated tax compliance and electronic lodgment | Limited support for freelancers and sole proprietors |
| Supports multiple business entities | |
| Direct filing with tax agencies |
Final Thoughts
Xero Tax is a robust tax solution for accountants, bookkeepers, and businesses seeking automation and compliance-driven tax filing. Its connection with Xero Accounting, cloud accessibility, and multi-entity capability make it an ideal choice for practices that service multiple clients.
Though its reliance on Xero’s ecosystem and custom pricing is less than ideal for sole users, companies and tax practitioners that are already leveraging Xero will see a totally automated, compliance-oriented tax filing process.
TurboTax
TurboTax
- Pricing: Varies on Filing Options
- State Filing: $39 per state
- Best For: Comprehensive tax guidance
TurboTax is Best For
Individuals and small business owners looking for intuitive, guided tax software with expert assistance, maximized deductions, and seamless filing options.
Pricing & Fees of TurboTax
TurboTax offers a range of online tax filing options to accommodate various tax situations. Here’s a breakdown of their current offerings:
TurboTax Free Edition
- Cost: $0 Federal, $0 State, $0 to File
- Best For: Simple tax situations (W-2 income only)
TurboTax Live Assisted
- Starting Cost: $39* Federal (State additional)
- Best For: Taxpayers seeking expert assistance while filing
TurboTax Live Full Service
- Starting Cost: $89* Federal (State additional)
- Best For: Individuals preferring a tax expert to handle the entire filing process
(*Prices are subject to change and may vary based on promotions. Starting prices are for federal returns; state returns may incur additional fees. For the most current information, visit TurboTax’s official pricing page.)
For more detailed information and to choose the plan that best fits your tax situation, visit TurboTax’s official website.
Overview of TurboTax
TurboTax is a leading tax software designed to simplify the filing process for individuals, self-employed professionals, and small businesses. An intuitive, step-by-step interface guides users through tax forms, helping them identify eligible deductions and maximize refunds.
The platform offers a range of options, from self-guided filing to expert-assisted and full-service tax preparation, ensuring users of all experience levels have the right support. Features like AI-powered audit detection, automatic error checks, and direct deposit refunds make TurboTax a comprehensive choice for hassle-free tax filing software.
Why Choose TurboTax
TurboTax stands out for its user-friendly design and expert-backed accuracy. Unlike some tax software that requires users to have prior tax knowledge, TurboTax simplifies the process with personalized guidance, real-time refund calculations, and audit protection.
Additionally, the availability of TurboTax Live gives users direct access to CPAs and tax professionals who can review returns or even file taxes on their behalf. This tax software also integrates seamlessly with financial platforms, payroll providers, and bookkeeping tools, making it especially beneficial for freelancers and small business owners.
Key Features of TurboTax
Audit support and accuracy check
TurboTax automatically scans for potential errors and inconsistencies before users submit their returns. The tax software provides explanations and suggestions for corrections to minimize audit risks.
Step-by-step tax guidance
TurboTax simplifies the filing process by breaking it down into easy-to-follow steps. Users answer simple questions about their income, deductions, and financial situation, and the tax software automatically fills out the necessary forms.
Max refund guarantee
TurboTax helps users maximize their tax refunds by identifying every eligible deduction and credit. The software analyzes income, expenses, and filing status to uncover potential savings.
Integrations of TurboTax
- Payroll Integrations – QuickBooks Payroll, Gusto, ADP, Paychex, OnPay
- HR Software Integrations – BambooHR, Workday, Zenefits, Rippling
- Accounting & Financial Management Integrations – QuickBooks, Xero, NetSuite, Wave
- Investment & Banking Integrations – Robinhood, Coinbase, Fidelity, Charles Schwab
Customers of TurboTax
TurboTax serves individuals, self-employed professionals, and small business owners, partnering with various payroll providers and financial institutions to simplify tax filing.
Pros and Cons of TurboTax
| Pros | Cons |
|---|---|
| User-friendly interface | Higher pricing for premium features |
| Step-by-step guidance | Limited customer support options |
| Maximizes deductions & credits | Extra fees for state filings |
| Integrates with financial apps | |
| Supports multiple tax situations |
Final Thoughts
TurboTax is a top choice for individuals and business owners who want a guided, easy-to-use tax software experience. With its step-by-step approach, refund maximization tools, and expert support, it ensures accuracy and peace of mind.
While premium plans can be costly, the software’s extensive features, audit protection, and live expert assistance make it a solid investment for stress-free tax preparation.
H&R Block
H&R Block
- Pricing: Varies on Filing Options
- State Filing: $37 per state
- Best For: In-person and virtual filing
H&R Block is Best For
Individuals and small business owners looking for a tax preparation software that offers a balance of affordability, ease of use, and expert-assisted filing options.
Pricing & Fees of H&R Block
H&R Block offers a variety of tax filing options to accommodate different tax situations and preferences. Here’s an overview of their current offerings:
H&R Block Free Online
- Cost: $0 Federal, $0 State, $0 to File
- Best For: Simple tax situations
H&R Block Deluxe Online
- Starting Cost: $35 (State additional)
- Best For: Taxpayers with credits and deductions
Assisted Tax Preparation Services
- Starting Cost: $89 + additional state fee
- Best For: Individuals seeking professional assistance
(*Prices are subject to change and may vary based on promotions. State returns may incur additional fees. For the most current information, visit H&R Block’s official website.)
For more detailed information and to choose the plan that best fits your tax situation, visit H&R Block’s official website.
Overview of H&R Block
H&R Block is a trusted name in tax preparation, offering both DIY tax software and expert-assisted services. The platform provides a guided experience with an intuitive interface, helping users maximize deductions and file taxes accurately.
Users can choose between self-filing, expert review, or full-service tax preparation, depending on their needs. H&R Block also offers in-person tax assistance at physical locations, making it a flexible option for those who prefer professional support.
Why Choose H&R Block
H&R Block stands out for its combination of affordability, ease of use, and access to expert tax help. Unlike some tax software that is purely online, H&R Block gives users the option to visit local offices for in-person assistance.
It’s Worry-Free Audit Support, which provides guidance in case of an IRS audit, and the Tax Pro Review service allows users to have a professional review of their return before submission. The software also integrates with major financial and payroll platforms, making tax filing more seamless for individuals and business owners.
Key Features of H&R Block
Max refund guarantee
H&R Block helps users maximize refunds by searching for every eligible deduction and credit. The tax software continuously checks for overlooked tax-saving opportunities and provides real-time refund updates.
Step-by-step guidance
H&R Block is a tax filing software that simplifies with an intuitive, question-based process that guides users through their returns. The platform ensures accuracy by automatically selecting the correct tax forms based on user input.
Expert tax assistance
Users have access to tax professionals through live chat, expert reviews, and full-service tax filing software. Whether needing a quick answer or a professional to review a return before submission, H&R Block ensures that expert help is always available. In-person assistance is also an option at nationwide retail locations.
Integrations of H&R Block
- Payroll Integrations – ADP, Gusto, Paychex, QuickBooks Payroll, Paycor
- HR Software Integrations – BambooHR, Workday, Zenefits, Rippling
- Accounting & Financial Management Integrations – QuickBooks, Xero, NetSuite, Wave
- Investment & Banking Integrations – Robinhood, Coinbase, Fidelity, Charles Schwab
Customers of H&R Block
H&R Block serves a diverse clientele, including individuals, self-employed professionals, and small business owners. In the fiscal year 2022, the company prepared 20.5 million U.S. tax returns, with 8.5 million clients utilizing their DIY products.
While specific client names are not publicly disclosed, H&R Block’s extensive network of tax professionals and comprehensive service offerings make it a trusted choice for a wide range of taxpayers seeking reliable tax preparation assistance.
Pros & Cons of H&R Block
| Pros | Cons |
|---|---|
| Easy-to-use interface | Extra fees for advanced features |
| In-person & online filing options | Limited support for complex tax situations |
| Affordable pricing for basic plans | Upsells for additional services |
| Strong customer support | |
| Accurate tax calculations |
Final Thoughts
H&R Block is a solid choice for individuals and small business owners who want easy-to-use tax software with the option for professional assistance. While premium features can add to the cost, the platform’s extensive support and refund optimization tools make it a valuable investment.
Its combination of online and in-person tax support, along with a strong accuracy guarantee, makes it a reliable option for those seeking a stress-free tax filing experience.
FreeTaxUSA
FreeTaxUSA
- State Filing: $14.99 per state
- Federal Filing: Free
- Best For: Affordable and easy online tax filing
FreeTaxUSA is Best For
FreeTaxUSA is an online tax software designed for individuals and self-employed professionals looking for an affordable and straightforward way to file their taxes. It offers a full suite of tax filing features at a fraction of the cost of competitors while ensuring accuracy and maximizing refunds.
Pricing & Fees of FreeTaxUSA
FreeTaxUSA provides a transparent pricing structure:
- Federal Tax Return – $0.00 – All federal tax forms are free, regardless of complexity.
- State Tax Return – $14.99 per state return.
- Deluxe Edition – $7.99 – Includes priority support, unlimited amended returns, and audit assistance.
- Pro Support – $39.99 – Offers personalized advice from tax specialists via phone, live chat, or screen share.
(*Prices are subject to change and may vary based on promotions. For more details, visit the official pricing page)
Overview of FreeTaxUSA
FreeTaxUSA makes tax filing simple with a step-by-step interface that guides users through every section of their return. It supports various tax situations, from basic W-2 filings to more complex self-employment, investment, and rental income cases.
With robust features and affordable pricing, it provides an excellent alternative to higher-cost tax software without compromising accuracy. The platform ensures users can maximize deductions, track potential errors, and file their taxes efficiently, whether filing independently or with professional assistance.
Why Choose FreeTaxUSA
FreeTaxUSA stands out due to its cost-effectiveness and comprehensive support for tax forms. Unlike some competitors that charge extra for additional forms, FreeTaxUSA allows all users to access federal filing for free, no matter their tax situation.
Additionally, users can upgrade to the Deluxe or Pro Support packages for personalized expert assistance. Its user-friendly design and features, such as audit support and refund maximization tools, make it a strong choice for individuals and business owners alike.
Key Features of FreeTaxUSA
Comprehensive tax filing
FreeTaxUSA supports all major IRS forms and schedules, ensuring users can file tax returns for various financial situations, including self-employment, investments, and rental income. Whether filing a basic return or reporting business deductions, the platform covers everything without additional costs.
Maximum refund guarantee
The platform helps users claim every eligible deduction and credit to ensure they receive the highest refund possible. FreeTaxUSA continuously scans for tax-saving opportunities based on income, expenses, and filing status.
Additionally, the real-time refund tracker provides users with an instant estimate of their expected return. The tax software also includes a tax estimator tool, allowing users to plan ahead by forecasting their refund before they start the filing process.
Audit assistance
FreeTaxUSA includes audit assistance in its Deluxe package, providing users with guidance in case of an IRS inquiry. This service offers step-by-step explanations of the audit process and instructions on how to respond effectively.
Integrations of FreeTaxUSA
FreeTaxUSA offers limited direct integrations but allows users to import prior year tax data from other tax software platforms, making it easier for returning users to transition seamlessly.
Customers of FreeTaxUSA
FreeTaxUSA serves a wide range of individual taxpayers and self-employed professionals seeking affordable and efficient tax preparation solutions. While specific client names are not publicly disclosed, the platform has garnered positive feedback from numerous users.
Pros & Cons of FreeTaxUSA
| Pros | Cons |
|---|---|
| Free federal tax filing for all users | Limited customer support (no phone support in free version) |
| Low-cost state tax filing | Basic user interface compared to premium competitors |
| Supports all major tax forms and schedules | No direct W-2 or 1099 import from employers |
| Accuracy and maximum refund guarantee | |
| Affordable Deluxe edition with audit support |
Final Thoughts
FreeTaxUSA is an excellent choice for individuals and self-employed professionals looking for an affordable, feature-rich tax software. Its low-cost pricing, support for all major tax forms, and user-friendly approach make it a standout option in the tax software market.
While it may lack some of the advanced integrations and high-end customer support of premium competitors, its focus on cost-effectiveness, accuracy, and audit support makes it a valuable option for anyone looking for a straightforward and budget-friendly tax filing experience.
Conclusion
The selection of tax software is crucial for small businesses to make tax filing simpler, comply with rules, and take full benefit from deductions. The ideal solution must streamline expense tracking, accommodate payroll taxes, integrate with accounting packages, and provide audit support.
As a freelancer, small business owner, or handling multiple entities, the right tax software choice based on your company requirements can save time and alleviate tax stress. Products such as TurboTax Business and H&R Block Business include robust support, and FreeTaxUSA and TaxSlayer are more budget-friendly options.
Companies working on Xero Accounting might find that using Xero Tax facilitates easy integration. With automation, compliance resources, and tax professional help, business owners can concentrate on growing their companies and remain ready to file throughout the year.
Frequently Asked Questions
What is the best tax software for small businesses in 2025?
TurboTax Business, H&R Block Business, TaxSlayer Self-Employed, FreeTaxUSA Business, and Xero Tax are among the top options. The best choice depends on your business size, tax complexity, and budget.
How does tax software help with expense tracking?
Most tax software automatically categorizes business expenses, tracks deductions, and integrates with accounting platforms like QuickBooks and Xero, making it easier to file accurate tax returns.
Do small businesses need tax software with payroll support?
If you have employees, choosing tax software with payroll tax support helps manage withholdings, generate W-2s, and ensure compliance with federal and state payroll tax regulations.
Is free tax software a good option for small businesses?
Free options like FreeTaxUSA Business work well for basic business filings, but businesses with employees or multiple income streams may benefit from paid tax software with advanced features.
How can small businesses avoid tax penalties?
Keeping detailed expense records, filing quarterly estimated taxes, and ensuring tax software integration with bookkeeping systems help businesses stay compliant and avoid IRS penalties.
