Taxact vs. Turbotax for Small Business: Which Is Best?
Running a small business is tough, and tax season can feel even tougher. Choosing the right tax software can make a huge difference in your stress levels and your bottom line. But with so many options, where do you even begin?
This comparison dives deep into two popular choices: TaxAct and TurboTax for Small Business. We’ll explore their features, pricing, and ease of use to help you decide which one is the perfect fit for your specific business needs. Get ready to find out which software reigns supreme!
Whether you’re a freelancer, a sole proprietor, or have a small team, understanding the differences between TaxAct and TurboTax is crucial. We’ll cover everything from the basic features to the more advanced functionalities designed for small business owners. Let’s get started and find the best tax solution for you.
Specs at a Glance:
| Feature | taxact | TurboTax for Small Business |
|---|---|---|
| Tax Forms Supported | Comprehensive | Comprehensive |
| Guidance & Support | Step-by-step guidance | Step-by-step guidance, phone support |
| Importing Tax Documents | Yes | Yes |
| Mobile App | Yes | Yes |
| Multiple Business Types Supported | Yes | Yes |
| Employee W-2 Forms | Yes | Yes |
| Audit Support | Yes | Yes |
| Accuracy Guarantee | Yes | Yes |
| Data Encryption | Yes | Yes |
| Track Business Expenses | Yes | Yes |
| Customer Support Channels | Email, Chat | Phone, Chat, Email |
| Self-Employed Features | Yes | Yes |
Feature-by-Feature Breakdown
Pricing and Plans
- Taxact: TaxAct typically offers more budget-friendly pricing options, often with lower costs for filing federal and state returns. However, the exact cost depends on the specific plan chosen and the complexity of your business. This can be a significant advantage for small businesses looking to minimize expenses.
- Turbotax for Small Business: TurboTax for Small Business is generally priced higher than TaxAct’s comparable offerings. The price reflects the breadth of features and support offered, but it might be less attractive to businesses with very basic needs.
- Winner: taxact
Ease of Use and Interface
- Taxact: TaxAct’s interface is generally considered user-friendly, with a straightforward approach to tax preparation. It may not offer the most modern design, but it is typically easy to navigate, particularly for those familiar with tax software.
- Turbotax for Small Business: TurboTax is known for its intuitive and guided interface, which can be very helpful for users who are less experienced with tax preparation. The step-by-step guidance and clear explanations are a major benefit.
- Winner: turbotax
Tax Form Support
- Taxact: TaxAct supports a wide range of business tax forms, including those for partnerships, S-corporations, and C-corporations. Coverage is comprehensive, although more complex situations might require a higher-tier plan.
- Turbotax for Small Business: TurboTax for Small Business covers various business structures and offers extensive support for many tax forms. It is generally very thorough and supports the forms needed for most small business scenarios.
- Winner: turbotax
Customer Support
- Taxact: TaxAct offers customer support, but the quality and availability of support can vary depending on the plan purchased. Options include FAQs, email, and phone support, with higher-tier plans often providing more direct access.
- Turbotax for Small Business: TurboTax provides robust customer support, including phone support, live chat, and access to tax professionals. The level of support is a notable strength, especially for businesses needing assistance with complex tax issues.
- Winner: turbotax
Integration with Accounting Software
- Taxact: TaxAct’s integration capabilities are more limited compared to TurboTax. While it may support some basic data imports, it might not integrate as seamlessly with popular accounting software packages.
- Turbotax for Small Business: TurboTax offers better integration with popular accounting software, such as QuickBooks. This can streamline the tax preparation process by importing financial data directly, saving time and reducing errors.
- Winner: turbotax
Accuracy and Guarantees
- Taxact: TaxAct provides accuracy guarantees to protect users from penalties and interest due to errors in their software. The specific terms of the guarantee should be reviewed.
- Turbotax for Small Business: TurboTax offers accuracy guarantees, including audit support and guarantees of maximum refund. These assurances can provide peace of mind to users.
- Winner: turbotax
Expert Assistance Options
- Taxact: TaxAct provides options for expert assistance, but the availability and cost of these services may vary depending on the plan. This might include access to tax professionals for guidance.
- Turbotax for Small Business: TurboTax offers various options for expert assistance, including live tax advice and even full-service tax preparation. This is a significant advantage for businesses that need professional help.
- Winner: turbotax
Mobile App and Accessibility
- Taxact: TaxAct typically has a mobile app, allowing users to prepare and file taxes on the go. The functionality and features of the mobile app should be evaluated.
- Turbotax for Small Business: TurboTax offers a mobile app that allows users to access their tax information and prepare and file taxes. This is a convenient feature for busy business owners.
- Winner: turbotax
Winner by Category:
| Category | Winner |
|---|---|
| Price | taxact |
| Ease of Use | TurboTax for Small Business |
| Customer Support | TurboTax for Small Business |
| Features | TurboTax for Small Business |
| Overall Value | taxact |
What They Have in Common:
- Tax Form Compatibility: Both taxact and TurboTax for Small Business support a wide range of tax forms, ensuring that various business structures and scenarios are covered. This includes forms for partnerships, S-corps, C-corps, and self-employed individuals.
- Data Security: Both platforms prioritize data security, employing encryption and other measures to protect sensitive financial information during the tax preparation process and when filing.
- Expense Tracking: Both tax software allow users to track business expenses, streamlining the process of identifying and claiming deductions, which can maximize potential tax savings.
- Importing Tax Documents: Both platforms offer the ability to import tax documents, such as previous year’s returns and financial statements, which can save time and reduce manual data entry.
- Mobile Apps: Both tax solutions provide mobile apps, allowing users to prepare and file taxes on the go, providing convenience and flexibility for busy business owners.
TaxAct Vs TurboTax For Small Business Buying Guide
Features and Functionality
Both TaxAct and TurboTax offer comprehensive features for small businesses, including support for various business structures like sole proprietorships, partnerships, and S-corporations. They facilitate the generation of necessary tax forms, such as Schedule C, K-1, and 1065. TurboTax generally provides a more user-friendly interface with extensive guidance, including video tutorials and step-by-step instructions, making it appealing for those less familiar with tax preparation. TaxAct offers a more budget-friendly approach with a relatively simple interface. Both products support importing financial data and offer features for tracking income and expenses. Consider the complexity of your business and your comfort level with tax software when deciding.
Pricing and Value
Pricing is a crucial factor when choosing tax software. TaxAct typically offers lower prices across its various tiers, which is especially attractive for small businesses with tight budgets. TurboTax, while often more expensive, provides different versions with varying features and support levels. The price difference reflects the additional features, such as priority support, access to tax professionals, and more in-depth guidance. Evaluate your business’s needs and the level of support required. Determine if the added features of TurboTax justify the higher cost, or if TaxAct’s lower price point and core functionality are sufficient for your requirements. Compare the total cost, not just the base price.
Ease of Use and Interface
The user interface significantly impacts the tax preparation experience. TurboTax is known for its intuitive interface, clear instructions, and extensive help resources, making it easier for users of all experience levels to navigate the software. TaxAct also has a relatively straightforward interface, but it might not be as visually appealing or offer the same level of hand-holding as TurboTax. Evaluate which interface feels more comfortable and efficient for your workflow. Consider how easily you can locate specific forms, understand instructions, and access support within the software. A user-friendly interface can save considerable time and reduce frustration during tax season.
Customer Support and Resources
Reliable customer support is essential, especially when dealing with complex tax issues. TurboTax generally offers robust support options, including phone, chat, and email support, along with access to tax professionals for personalized assistance. TaxAct provides customer support, including FAQs and online resources, but the availability and responsiveness of their support team may vary. Consider what type of support you need, whether it’s basic troubleshooting, detailed guidance, or direct access to tax professionals. Check reviews to gauge the quality and responsiveness of each company’s support services. Ensure the support options align with your needs.
Accuracy and Guarantees
Accuracy is paramount in tax preparation. Both TaxAct and TurboTax offer guarantees to ensure the accuracy of their software. These guarantees typically cover penalties and interest assessed by the IRS due to software errors. Before purchasing, review the terms of these guarantees to understand what is covered and the steps required to file a claim. Understand the software’s error-checking capabilities and how it flags potential issues before submission. Accurate software reduces the risk of audits and ensures you meet your tax obligations correctly. Consider the security measures each platform employs to protect your financial data.
Tax Form Support and Compliance
Ensure that the software supports all the tax forms required for your business structure and activities. Both TaxAct and TurboTax support standard business forms, but it is important to verify that it supports any specialized forms relevant to your business. This includes forms related to specific industries, employee benefits, or unique financial situations. Software should be updated regularly to reflect the latest tax laws and regulations. Confirm that the software complies with all federal and state tax requirements. Verify that the software is compatible with your accounting software or data-importing capabilities to streamline your tax preparation process.
Who Should Buy What?
Buy taxact If…
- You are looking for a more budget-friendly tax preparation solution.
- You are comfortable with a self-guided tax preparation process.
- You need comprehensive tax form support for various business types.
- You are looking for a reliable software without the premium price tag.
Buy TurboTax for Small Business If…
- You require more in-depth guidance and prefer direct access to expert support.
- You value a user-friendly interface and a more streamlined tax preparation experience.
- You want access to a comprehensive suite of features and tools.
- You are willing to pay a premium for added features and support.
Frequently Asked Questions
What types of businesses does TaxAct support?
TaxAct supports a variety of business structures, including sole proprietorships, partnerships, and S-corporations. It provides the necessary forms and schedules for these business types, such as Schedule C, K-1, and 1065. The specific features and forms available depend on the version you choose. TaxAct offers different versions catering to various business complexities and sizes, ensuring a solution tailored to your needs. Always verify the software supports the specific forms you need.
What types of businesses does TurboTax for Small Business support?
TurboTax for Small Business supports a wide range of business structures, including sole proprietorships, partnerships, S-corporations, and limited liability companies (LLCs). It covers the tax forms and schedules needed for these business types. The software helps you navigate complex tax situations specific to small businesses. TurboTax also offers features to help with bookkeeping, expense tracking, and other financial aspects. Ensure the version you select supports your specific business needs.
Which software offers better support for complex tax situations?
TurboTax generally provides more comprehensive support for complex tax situations. It includes expert guidance, live tax advice, and access to tax professionals who can assist with specialized needs. TaxAct offers customer support and resources, but may not provide the same level of personalized assistance. Consider the complexities of your business and whether you need direct access to tax experts for guidance. TurboTax is often a better choice for businesses with intricate tax matters.
How do TaxAct and TurboTax handle data security?
Both TaxAct and TurboTax employ robust security measures to protect your financial data. They use encryption, secure servers, and other security protocols to safeguard your information during transmission and storage. They are compliant with industry standards and regulations regarding data protection. Review their privacy policies to understand how they handle your data and what measures they take to ensure its security. Regularly update your software and use strong passwords to further protect your information.
Can I import data from my accounting software?
Yes, both TaxAct and TurboTax offer data import capabilities to streamline tax preparation. They support importing data from popular accounting software like QuickBooks and other financial programs. This feature saves time and reduces the risk of manual errors by automatically transferring financial information. Before choosing a software, confirm it supports your accounting software. The import process simplifies the process and provides a consolidated view of your financial data.
What are the key differences in pricing between TaxAct and TurboTax?
TaxAct typically offers lower prices across its various tiers, which is especially attractive for small businesses with tight budgets. TurboTax, while often more expensive, provides different versions with varying features and support levels. TurboTax pricing reflects the additional features, such as priority support, access to tax professionals, and more in-depth guidance. Carefully evaluate your needs and budget when comparing pricing to determine which option offers the best value for your business.
Which software is easier to use for a first-time user?
TurboTax is generally considered easier to use for first-time users. It features an intuitive interface with step-by-step guidance, video tutorials, and clear instructions. TaxAct also offers a user-friendly interface, but it might not provide the same level of hand-holding as TurboTax. Consider your comfort level with tax software and how much support you need during the tax preparation process. TurboTax’s user-friendly design can be beneficial for those new to tax filing.
Final Verdict
Both TaxAct and TurboTax offer robust features for small businesses, but they cater to different needs. TaxAct provides a cost-effective solution with essential functionalities, making it suitable for budget-conscious businesses with straightforward tax situations. TurboTax, while pricier, offers a more user-friendly experience, extensive guidance, and access to tax professionals, ideal for businesses seeking comprehensive support. The best choice depends on your budget, tax complexities, and comfort level with tax preparation.
Winner: TurboTax