In 2023, these are the Top 5 Tax Software Platforms for Freelancers.
Working as a freelancer full- or part-time can help you make extra money. However, managing invoicing and taxes on your own has a number of disadvantages. Not everyone is adept at managing the accounting department of their small business or side gig.
It's a good idea to purchase tax preparation software as soon as you can, rather than waiting until tax season is almost upon us. By doing this, you won't have to worry about gathering invoices, sorting tax receipts, and simultaneously coming up with the best solution.
How should a 2023 tax software platform be selected? Before we go into the best tax software for independent contractors, let's talk about some advice for picking the best choice for your company.
How to Select the Best Tax Software for Independent Contractors
The majority of tax software programmes include several features. Take into account the following elements to select the best option for your company:
1. Be mindful of your needs
For freelancers starting out with side gigs, selecting a tax software solution might be a daunting task. Even though cost could be a major consideration, make sure the offered solution meets your requirements.
Here are some queries to think about:
• Does it provide assistance with the forms you must submit?
• Do you require the assistance of a tax expert?
• Do you have access to a tool that can assist you in finding potential tax deductions?
• Does it provide good assistance and customer service?
2. Orienting Issues
The top tax software packages allow you to complete the tax form and respond to in-depth queries simultaneously. Others, though, digitise the process but call for a more active approach. Whatever level of involvement you desire in the process, the solution you select should reflect that preference.
3. A user-friendly interface
Tax software that is less than optimal or difficult to use may result in costly mistakes and deductions. Try a free plan with a few options to see whether the solution is the best fit for you. You can also look up lessons.
Then, think about the following inquiries:
• Is the software's user interface complicated?
• Is it user-friendly?
• How quickly is the onboarding process?
It probably makes sense to buy if you have no trouble filing your taxes. If not, look into a different technology for your business requirements.
4. Having access to a tax expert
Most independent contractors desire access to certified tax professionals or Certified Public Accountants in addition to having trustworthy software (CPAs). In this instance, the ideal solution ought to be able to connect you with a committed professional who is familiar with your tax position.
Contacting a professional can be done virtually, in person with a tax expert, or through one-on-one meetings. You may even engage a Fiverr tax expert to answer your questions and file your taxes for you, however not every solution will provide these services.
Professionals who work long hours occasionally lack the time to manage their own tax returns.In light of this, you might choose a platform that enables you to submit the necessary documents and hire a reputable expert to do the rest.
5. Periodical Tax Reminders
In contrast to workers who have taxes automatically withdrawn from their paychecks, freelancers and self-employed professionals are required to pay state or federal tax quarterly.
Taxes are owed, but it's simple to ignore them when running a business. The top tax preparation software should be able to notify you or remind you to make your payment on time. You'll incur an extra fine if you don't.
6. Budget
You have more forms and invoices as a freelancer than a regular filer.As a result, you will have to select more expensive plans to keep track of your small business's receipts and tax obligations. Additionally, additional costs if you want to consult a licenced tax expert.
Despite your tight budget, the added expense is justified. A dependable solution will assist you in receiving refunds and help you avoid paying hundreds or thousands of dollars in taxes.
The tax sector may have cheaper services from new competitors. But there are software platforms that are well-known and have a good reputation, so every dollar is well-spent.
Best Tax Software For Independent Contractors & Self-Employed
Here are some of the top tax software platforms that independent contractors can select from.
1. H&R Block
A well-known tax software programme used by independent contractors and small enterprises is H&R Block. Users may complete their tax returns accurately and correctly thanks to the software's compatibility for a variety of federal and state forms. The best part is that you can always receive the maximum refund.
H&R Block's Self-Employed Online Assist service will link you with a licenced tax expert on demand if you wish to file your taxes with a pro. You can receive individualised advice and resources to cut costs while interacting with others via screen sharing, chat, or video. As an alternative, you might choose to meet a tax expert in person, gather your paperwork, and let them handle the rest.
Freelancers who are interested can test out their basic plan for free.Paid plans begin at $29.99, with a self-employed online plan starting at $84.99 for full-time freelancers.
2. TurboTax
TurboTax has you covered whether you're a side-hustler, independent contractor, or self-employed professional.
Freelancers can respond to straightforward questions to match them with the appropriate forms. As an alternative, you can take a picture of your W-2 or 1099-NEC, and the AI will enter the pertinent information. More importantly, it can look up and use more than 500 tax deductions to increase your savings.
Looking for a pro to work with? You can book a video call or speak with a professional through the live chat feature of TurboTax.Give your taxes to a CPA expert using the platform for no trouble, and let them take care of the rest.
Simple tax returns can be filed with Turbotax for free, and premium plans begin at $39. To get the best plan for your circumstances, go to their website and complete the "choose all that apply" portion.
3. TaxSlayer
For contractors and side-hustlers who require assistance in completing their 1099 and W-2, TaxSlayer offers a self-employed plan. Simply register for a free account, and the platform will help you complete your 1099. TaxSlayer also sends tax payment reminders so you may finish the procedure accurately and on time and prevent late payments and fines.
Every freelancer has different tax-related problems.The good news is that you can speak with a tax expert who has experience working for yourself or as a freelancer to acquire the answers you require. The platform provides defence and counsel in the event of an IRS audit.
One free state and federal return is part of Tax Slayer's free plan. Unlike its rivals, TaxSlayer offers more affordable paid plans starting at $17.95, while the cost of their self-employed plan is $47.95.
4. TaxAct
With the help of TaxAct Self-Employed, independent contractors may easily complete their 1099-NEC, 1099-MISC, or 1099-K forms. You can benefit from tax deductions that are appropriate for your particular situation by using a Tax Deduction Minimizer. Additionally, their TaxAct checks your return for potential problems to reduce the likelihood of an audit.