2016 Business Tax Preparation Software Compared

Doing 2016 Business Taxes on TaxAct, H and R Block, or TurboTax

Business Tax Software
Software for Business Taxes. -Oxford-/Getty Images

Updated for 2016 Business Tax Returns

If you are looking for business tax software, here is a comparison of the three major tax software applications - TurboTaxH&R Block At Home, and TaxAct.  All three tax software applications include products to prepare business tax returns, as well as state business tax returns.

Can I Use Tax Software to Prepare My Business Taxes? 

Many business owners ask whether they can use tax preparation software for their business taxes.

The ability to use this software for business tax returns depends on the type of business you have

The business income tax software you need depends on the form you are filing:

  • If you are a sole proprietor or single-member LLC, you file business taxes on Schedule C, along with your personal tax return. You will need the tax software version that includes Schedule C.
  • If you are a corporation, you need tax software that includes Form 1120
  • If you are an S corporation, you need tax software that includes Form 1120S
  • If you are a partnership or multiple-member LLC, you need tax software that includes Form 1065.

 

What These Tax Programs Include - and Don't Include

All three major tax preparation programs offer options for businesses. These are the software types and prices for 2016 tax returns. If you are purchasing the return to get your Schedule C prepared, that return also prepares the rest of your personal taxes for the year.

 

As part of preparing Schedule C, each of these returns calculates your self-employment tax (Schedule SE) and includes this tax on the appropriate sections of your personal tax return. 

The business tax return preparation programs for corporations and partnerships do not include personal tax return information, although the products may be bundled.

 

I've included information (where I could find it) on whether these programs include creation and filing of W-2s for employees and 1099s for non-employees. 

TaxAct for Business Returns

If you are filing a business tax return on Schedule C along with your personal tax return on Form 1040, you will need TaxACT Premium. The cost is $30, but that doesn't include a state return. 

Business tax return products for 2016 are all $60 each: 1065 for partnerships, 1120S for S Corporations, and 1120 for C Corporations. You can bundle these and save money, if you have more than one type of business. Tax-exempt business returns (on IRS Form 990) are also $60. 

TurboTax for Business Returns

To file a tax return for your small business on Schedule C you have two options: 

TurboTax Home & Business is the CD/download version for both Mac and Windows products.The cost is $99.99, including one state download and 5 federal e-files. 

TurboTax Self-employed is the online version. It is $89.99 with any state returns additional. 

For corporations and partnerships (including multiple-member LLCs),  you will need TurboTax Business (CD/download).  The cost is $149.99 and the state return is additional. One feature of this software is that you can import your business information from QuickBooks desktop versions (but not from QuickBooks Online).

 

All of these versions of TurboTax allow you to create and file W-2 forms and 1099 forms. 

H&R Block for Business Returns 

You can use the Premium Edition for $74.95 if you are doing a Schedule C (state returns additional).

The Premium & Business version includes Schedule C, corporate, S corporation, partnership, and LLC tax forms for $89.95. Unlimited business state filing is included, but state e-file is an additional fee. This is the only H&R Block program that will allow you to create and file W-2 forms and 1099 forms. 

Should you do your own business taxes? 

Even if you are able to purchase software - either downloaded or on a CD - to do your business taxes, the question still remains about whether you should try to complete this task on your own.

 

In most cases, if you have a very simple tax return on Schedule C, you may find it easy to do your own business taxes along with your personal taxes. 

In this case, don't forget you must still calculate and pay self-employment taxes if your small business has a profit for the year. 

In other cases, with a more complex business tax return for a partnership, multiple-member LLC, or corporation, you should probably get the help of a tax preparer who is familiar with this type of return. 

If you have questions, be sure to contact your tax professional. 

This article suggests some ways you can save money on tax return preparation.