As we approach 2025, small business owners are gearing up to navigate an increasingly complex tax landscape. From federal tax laws to state regulations, the maze of tax requirements can be overwhelming. Fortunately, tax software has become an invaluable tool for streamlining tax preparation, ensuring compliance, and ultimately saving time and money.
Choosing the right tax software is crucial for small businesses to ensure accuracy, minimize stress, and avoid costly mistakes. Whether you’re a freelancer, a small business owner, or a growing enterprise, finding the right tax solution is key to keeping your finances in order. In this article, we’ll explore the top 5 tax software options every small business should consider in 2025.
1. QuickBooks Self-Employed
Best for: Freelancers, contractors, and sole proprietors
QuickBooks Self-Employed has long been a trusted solution for small business owners, especially freelancers and independent contractors. Its user-friendly interface, robust features, and integration with QuickBooks accounting software make it one of the most popular choices.
Key Features:
- Expense Tracking: Automatically tracks and categorizes your business expenses, making it easier to claim deductions.
- Tax Estimations: Provides quarterly tax estimates, which is particularly helpful for those making estimated tax payments.
- Mileage Tracking: You can track your business mileage with the app, helping ensure that you don’t miss out on tax deductions.
- Tax Filing Integration: QuickBooks Self-Employed integrates with TurboTax, allowing for smooth tax filing directly within the app.
Pros:
- Seamless integration with QuickBooks accounting software
- Automatically categorizes income and expenses for tax filing
- Mobile app for on-the-go tax management
Cons:
- Limited to freelancers and sole proprietors (doesn’t support partnerships or corporations)
- Some features require higher-tier subscriptions
For freelancers and independent contractors looking for an all-in-one tool that simplifies tax preparation and bookkeeping, QuickBooks Self-Employed is an excellent choice.
2. TurboTax Business
Best for: Small businesses and LLCs
TurboTax Business is one of the most well-known tax software solutions, catering to a variety of business types, including LLCs, corporations, and partnerships. TurboTax offers easy-to-understand guidance through the tax filing process, making it ideal for business owners who prefer a DIY approach without the complexity.
Key Features:
- Guided Tax Filing: Walks you through the process step by step, ensuring that you don’t miss any deductions.
- Business Tax Forms: Automatically fills out and files forms like Schedule C, S-corporation (Form 1120S), and more.
- Audit Defense: TurboTax includes an audit support option, helping you prepare for a potential audit.
- E-filing: Allows businesses to file their federal and state taxes electronically.
Pros:
- Suitable for a variety of business structures (LLCs, corporations, etc.)
- Extensive resources, including live expert assistance
- Automatically imports financial data from QuickBooks Online and other accounting software
Cons:
- Premium features can be expensive, particularly for businesses with more complex needs
- May require additional add-ons for full tax support
TurboTax Business is an excellent choice for LLCs and small businesses that want a reliable tax software with robust features and easy-to-follow instructions.
3. Xero Tax
Best for: Businesses with international operations or complex accounting needs
Xero is a global accounting software that offers an impressive suite of features for small businesses. Although Xero is known for its accounting capabilities, Xero Tax provides a powerful solution for tax filing, particularly for businesses that need to manage multi-jurisdiction taxes.
Key Features:
- Multi-Country Tax Filing: Xero Tax can handle tax filings in multiple countries, making it a great choice for businesses with international clients or operations.
- Automation of Tax Calculations: Xero automates tax calculations and integrates seamlessly with its accounting software, ensuring your records are accurate.
- Real-Time Tax Reporting: Provides real-time tax reports that update as transactions are entered, helping you stay on top of tax liabilities.
- Integration with Payroll: Seamlessly integrates with Xero’s payroll system to simplify tax reporting for employees.
Pros:
- Ideal for international businesses or those with complex tax requirements
- Strong integration with Xero accounting software
- Real-time updates on tax liabilities
Cons:
- Higher learning curve for new users
- More expensive compared to some basic tax software options
Xero Tax is a great choice for small businesses with complex needs, such as international operations or those requiring a more comprehensive accounting and tax solution.
4. TaxSlayer Classic
Best for: Budget-conscious small businesses and sole proprietors
TaxSlayer has been a longstanding name in the tax software space. Its Classic plan is particularly suited for small business owners and sole proprietors who are looking for an affordable yet effective tax solution. While it may not offer as many features as some of its competitors, TaxSlayer Classic delivers reliable performance at a lower cost.
Key Features:
- Federal and State Tax Filing: Handles both federal and state taxes, with the option to file multiple state returns.
- Deduction Finder: TaxSlayer analyzes your income and expenses to find eligible deductions, helping to reduce your taxable income.
- Simple Interface: Provides an easy-to-use interface, ideal for business owners without extensive tax knowledge.
- E-filing: Supports e-filing for both federal and state taxes.
Pros:
- Affordable pricing, with competitive rates
- Simple and intuitive interface for first-time users
- Offers both federal and state e-filing
Cons:
- Fewer advanced features compared to competitors
- Limited customer support options
If you’re a small business owner on a budget or if you have a relatively simple tax situation, TaxSlayer Classic offers an excellent value proposition.
5. Wave Accounting
Best for: Small businesses seeking a free tax solution with optional paid features
Wave Accounting is a popular free accounting software that also includes tax filing features. While it’s primarily known for accounting, Wave’s tax tools offer an affordable way for small business owners to handle their taxes without breaking the bank. The free version is ideal for small businesses just getting started, but there are also paid features available for those who need more advanced services.
Key Features:
- Free Accounting Software: Wave’s core accounting tools are free, and its tax features integrate directly into the software.
- Tax Estimations: Wave can help you calculate your tax liabilities throughout the year, so there are no surprises come tax season.
- Simple Tax Filing: Offers straightforward tax filing for small businesses and self-employed individuals.
- Receipt Scanning: Wave allows you to scan receipts and track your expenses, ensuring that you claim all possible deductions.
Pros:
- Completely free for basic accounting and tax filing
- Simple to use, with a user-friendly interface
- Scalable features with paid options for additional needs
Cons:
- Limited to basic tax filing capabilities (not suitable for more complex business structures)
- Paid features are necessary for additional functionality
Wave Accounting is a great choice for small businesses and solo entrepreneurs who are looking for an affordable and simple solution for tax filing and accounting.
Choosing the Right Tax Software for Your Business
Selecting the right tax software is essential for streamlining your tax preparation, ensuring compliance, and saving both time and money. Here are a few considerations when choosing tax software for your small business:
- Business Structure: Ensure the software supports your business structure. Some software is ideal for sole proprietors and freelancers, while others cater to LLCs and corporations.
- Ease of Use: Choose a software solution with a user-friendly interface that matches your technical proficiency.
- Features: Consider the features you need, such as expense tracking, multi-state filing, or audit support.
- Cost: Compare pricing to ensure that the software fits within your budget. Some software offers free versions for basic needs, while others have premium pricing for more advanced features.
- Customer Support: Reliable customer support can make all the difference, especially when dealing with tax-related issues.
Conclusion
Tax season doesn’t have to be a stressful time for small business owners. With the right tax software, you can navigate the complexities of tax filing with ease. Whether you’re a freelancer, a sole proprietor, or the owner of an LLC, there’s a tax solution out there to meet your needs.
Also Read: 10 Tax Deductions Small Business Owners Always Forget
QuickBooks Self-Employed, TurboTax Business, Xero Tax, TaxSlayer Classic, and Wave Accounting are all excellent options to consider in 2025. Each offers unique features and benefits, so take the time to evaluate which one aligns best with your business needs and budget. With the right software, tax filing becomes a streamlined and stress-free process, allowing you to focus on growing your business.