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The tax filing process for these individuals is a little different. You need to factor in business income and Social Security and Medicare tax. And there’s other special requirements on the tax return for these business owners.
Take heart. There’s accounting software designed especially for people who work at self employed jobs.
What is Tax Software?
Like the name suggests, this software helps people file their returns. Most like H R block offer e-filing, cloud storage, deduction and credit suggestions and some other features.
These filers need their own set of tax software options.
Why You Should Consider Self Employed Accounting Software
The right software tax forms for these small business owners are cost effective. And there’s some other features self employed individuals need to pay attention to.
Here’s five reasons to consider using the best tax software.
Make Calculations Simple
Accounting software takes care of complicated calculations. No need to tally up the numbers with a spreadsheet and calculator.
Limit Errors
Self-employed business owners can make mistakes calculating deductions and credits by hand.
Get The Right Tax Deductions
These software programs usually provide a list of business-related expenses. This is important when you need to know how to file self employment taxes properly.
Get Help With State Tax Filing
If your location requires it, state taxes needs to be filed separately from federal taxes. Self employed taxes might require a separate return. The rates and rules vary.
The right online tax software supplies the distinction.
Save Valuable Time
Self-employed filers are always up against the clock. This type of software makes time tracking easier because it’s faster than manual data entry.
Additionally, things like expense tracking can be carried forward from one year to the next.
Best Tax Software for Self Employed Professionals
There’s lots of tax preparation software to sort through. Following is a list for self employed individuals and independent contractors. These work with different types of self employment.
1. Quickbooks Self Employed
These industry leaders offer accounting features for self employed workers certain contractors and freelancers.
Quickbooks online are tax software providers that separate personal and business expenses. Tax documents can be transferred to TurboTax.
This online tax software tracks mileage too. Perfect for self employed filers.
Add a tax expert ( accountant) to online Quickbooks for free.
Pricing: There are several self employed package plans to choose from. The first is $7:50 with a monthly subscription. It includes itemized deductions.
2. Turbotax Self Employed
A self-employed small business owner needs to follow a specific set of tax laws.
This tax filing software is good for uncovering industry-specific deductions on your tax return.
This one comes with some of the same features as the others and one specifically on tax rules.
Pricing: You can start for free when you are ready to file your self employed federal return. Self-employed small businesses pay $119 for a federal return.
3. H&R Block
You can start with five free E files and instructions regardless of your tax situation here. The small business tax preparation you can get at H R Block will include accounts payable.
If you have questions about something like capital gains, there is chat access to a tax professional.
Some contractors and freelancers get a lot from these packages. Uber drivers can import their tax information too.
Pricing: The self-employed version at H R Block is a little more expensive starting at $180. But you get to meet virtually or in person with a tax professional and get year-round support.
4. FreshBooks
Keep accurate credit card statements and track expenses with this industry leading software. Freelancers need to pay attention too because fresh book offers accurate billing options and different payment choices.
Keep your financial numbers straight and quarterly taxes on track by sending reports to your accountant.
Pricing: Very small businesses that only have basic needs can start out with the light package. It only costs $7:60 a month.
5.TaxAct
This accounting software for business owners offers custom pricing. It covers tax credits and investment income, financial reports and freelance income plus more.
Pricing: The price here is advertised at 32% less than TurboTax. It’s listed at $79.95 with the state version extra.
Read More: how to file self employment taxes
6.FreeTaxUSA
This company was founded in 2001 by a CPA and some professional software developers. E-file and include rental property income during tax season.
Gig workers pay attention. Vehicle expenses are covered. That’s good news if you’re looking for uber driver tax information.
Check out the types of supported income.
This software product also provides unlimited amended returns when you use their Deluxe Edition. This is an important option if you need to change any of your deductions. You might need to correct an omission or error to your income or correct a credit.
Pricing: Federal returns are completely free. State tax filing costs $14.99.
7.TaxSlayer
This is free software when you file. Unlimited phone and email support. There’s a cash app taxes feature that’s free too. Import data from previous years or even a W2. Gives the big players like H R Block good competition.
The mobile app is noteworthy. It allows clients to use to share information in a secure and safe manner with the sole proprietor or self-employed person. Another interesting feature is the ability to chat in real time from inside the app.
Pricing: Students pay nothing. Self employed business owners pay $47.95.
8.eSmart Tax
Easy online filing and you’ll get maximum deductions and other tax breaks. Affordable Care Act options. Be aware, there’s no mobile app available. This software walks you though 1099-NEC income and has other features.
This is good software if you don’t need to do any filing or gathering info on the go.
Pricing: Federal taxes is $64.95. State tax filing costs $36.95.
9.Jackson Hewitt
There’s an option with this service to have professionals take care of your taxes. There’s excellent error checking involved to keep income and expense tracking accurate. The online version covers a variety of tax law topics.
Looking for an in depth, professional standard? This is great for those self employed business owners who want excellent results.
Pricing: They offer one online fee that covers both state and federal tax returns. The $25 flat fee stays the same for three years.
10.Cash App Taxes
Small businesses should take a good look at this one. Most IRS forms are supported. The pros are quick loading times for the pages. Good mobile apps.
But there’s a few cons here. Like the fact there’s no expert tax advice available.
There’s even a tab you can use to estimate your refund. Check out the max refund guarantee.
The best advantage to this product is you get what you pay for. Look under pricing.
Pricing: This one is free.
What to Look for in Tax Software
Finding the right tax software for small business is easier with a a few tips. Here’s a few of the things you should be looking for.
A Price That Includes State Tax Returns
Make sure any place you are considering is clear about whether they include state returns. Some software charges for these right away. With others it’s an additional cost. You’ll need to consider both state and federal taxes. So it pays to be clear about what what costs extra.
Software That Organizes Deductions
The tax deduction finder feature is helpful. It’s important to get these right so you don’t need to file corrections. Plus, business owners don’t want to miss anything they’re entitled to.
What Are The Guarantees?
Does the company guarantee the products accuracy? Will they stand beside you if you get audited? Making sure both of these features are part of the package.
A Personal Touch
Look for personal and customized explanations of any calculations. Generic clarifications wont do.
A Good Mobile App
Make sure it has a Schedule C option focusing on sole proprietors. And you’re clients can send you data and relevant info.
Can you do your own taxes if self employed?
You need to make sure as a sole proprietor to report business income and expenses on Schedule C. Remember that self-employment taxes includes Medicare and Social Security.
Which is the best accounting software for self employed?
FreshBooks gets the nod as the best accounting software for self employed business owners. The best in class features include the customer service. Save almost 9 invoicing hours a month. Get quick estimates and proposals based on your inventory management numbers.
Which is the best accounting software for calculating self employed business expenses?
According to their website, Quickbooks online tax software saves self employed customers almost $4000 a year in tax savings.
This software separates personal and business transactions. It will also download transactions from your bank accounts.
QuickBooks Self Employed matches up transactions to lines on your Schedule C. It even calculates the different categories like advertising and professional services/legal fees and meals to name a few.
The car and truck category categorizes different expenses when you use a vehicle for your self-employed business. It keeps track of things like vehicle repairs and insurance as well as loans and loan interest. H R Block is a close second when you’re looking for a speedy tax refund.
Image: Depositphotos
