The 2023-2024 tax season ended in April, but if you filed an extension, you have until October 15, 2024 to file your tax return. If you did not get an extension, file today to prevent additional late fees. |
When you work for yourself, it can be difficult to get your taxes done in the midst of the millions of other things you’re doing. Good tax software can help.
When choosing online tax software to handle your return during the current tax season, you should select an easy-to-use, budget-friendly product that provides excellent customer service and can help you find all of the deductions you’re entitled to.
Here are our top tax software picks for freelancers, self-employed people and 1099 contractors.
- Best Tax Software For Self-Employed Of August 2024
- TurboTax— Best Self-Employed Tax Software for Customer Service
- TaxSlayer Self Employed— Best Low-Cost Tax Software for the Self-Employed
- Summary: Best Self-Employment Tax Software
- Methodology
- What Does Online Tax Software Do?
- Who Should Use Self-Employment Tax Software?
- How To Choose Online Tax Software If You’re Self-Employed
- Bottom Line
- Frequently Asked Questions (FAQs)
- Next Up in Taxes
Best Tax Software For Self-Employed Of August 2024
Summary: Best Self-Employment Tax Software
Methodology
We began our analysis by looking at nine popular online tax software providers: Cash App Taxes, eFile.com, Free Tax USA, File Your Taxes, H&R Block, TurboTax, Jackson Hewitt, TaxSlayer and TaxAct.
We then narrowed down our list of finalists to analyze the overall best online tax software and one specifically for self-employed individuals. We included only online tax software companies that provide free tax preparation for simple tax filings for federal and state tax returns. That reduced our list to four: TurboTax, TaxSlayer, H&R Block and Cash App Taxes.
We evaluated the four finalists and created a tax filing profile for a freelancer with business income and deductions. We ran the profile’s details through the software and scored each one across four categories: ease of use, quality of customer service, pricing and help with filing.
To learn more about how Forbes Advisor rates tax products, and our editorial process, check out our Taxes Rating & Review Methodology.
What Does Online Tax Software Do?
Online tax software makes it easier for you to prepare your tax return. With easy navigation tools and simple question-and-answer formats, you’ll be prompted to enter your income and deductions to prepare an accurate tax filing. Most online tax software provides an option for you to import your tax forms, such as your W-2, directly into the program, which simplifies the preparation process.
Working with a tax preparer can be beneficial, and online tax software seeks to provide a similar experience with guided interviews so it feels as if someone is helping you along the way. However, if you are knowledgeable about filing taxes, you can choose to bypass these interviews and enter your information directly into the software. Of course, choosing this option allows you to complete your tax return faster.
Lastly, most online tax software allows you to file electronically, pay any taxes due and request direct deposit payments of any refund.
Who Should Use Self-Employment Tax Software?
If you’re a freelancer or independent contractor, you should choose an online tax software designed for self-employed people. Online tax software for self-employed people can ensure that you take advantage of various tax breaks that can reduce your tax liability. In addition, since the software is updated on a continuous basis, you’ll have the latest tax law changes at your fingertips.
Choosing a self-employed version of online tax software can also provide extra guidance, which is especially important if it is your first time filing your tax return. But you should be careful before choosing to prepare your own self-employed tax return. If your tax return ends up being a bit more complicated than you expected, it may be a good idea to hire a tax professional, such as a certified public accountant (CPA), to prepare your taxes.
The Importance of Using Tax Software
With the ever-changing tax laws, it is increasingly difficult to prepare a tax return by hand. Unless your tax filing includes a simple Form W-2 with only a few deductions, it is important to use tax software. When choosing a tax software package, you’ll want one that is easy to use and budget-friendly, allows for filing of any state tax returns you’re required to file and has great customer service.
If you’re seeking a no-cost way to file, you can take advantage of the IRS Free File program. The program allows taxpayers to file their federal tax returns for free, answering guided interview-style questions; in some cases, state tax filings are free as well. To qualify, your adjusted gross income must be $79,000 or less.
But even if you don’t qualify for the IRS Free File program, you can choose to file at no cost using the IRS Free File Fillable forms. They’re different from the Free File program. You’re required to do more work by completing the tax forms yourself without guidance, and there’s no option for state tax preparation and filing.
How To Choose Online Tax Software If You’re Self-Employed
When selecting the right online tax software option for you, consider the following:
- What add-ons does the product include? For example, consider whether the product includes a tax deduction finding tool or access to a tax expert if needed.
- Is there an additional fee for state tax filing? If so, how much? Does the product include a flat fee for multiple states?
- What options are available for customer service?
- Does the product help you find or discover tax deductions to which you’re entitled?
Bottom Line
Choosing the best software designed for self-employed individuals can help you prepare your tax return quickly and accurately. Before selecting the necessary online tax software, get an understanding of how it works and do your research.
Frequently Asked Questions (FAQs)
What are the best ways to file taxes if you're self-employed?
You can choose online tax software that fits your needs to file your self-employed tax return. However, if your tax return is more complicated, you should consider hiring a professional, such as a certified public accountant (CPA) or enrolled agent (EA), to prepare it for you.
When are tax payments due for the 2024 tax year for self-employed filers?
Self-employed filers are generally required to pay quarterly estimated taxes and file a return annually. The 2024 quarterly tax payments are due April 15, June 17 and September 16, 2024. The final quarterly tax payment is due January 15, 2025. You can use Form 1040-ES, “Estimated Tax for Individuals,” to figure the amount of your quarterly estimated taxes. Returns for tax year 2023 were due Monday, April 15, 2024.
How do I file my taxes for free if I am self-employed?
You can file your taxes for free using the IRS Free File if you have an adjusted gross income (AGI) of less than $79,000. Before using this service, you should browse each product offering to see which free product works best for you. Free File supports self-employment tax forms, including Schedule C and Schedule SE.
Can I deduct my self-employment taxes on my tax return?
Yes, the IRS lets you take a deduction equal to one-half of your self-employment taxes on your federal tax return. As a self-employed person, if your business reports a profit—for the IRS, that means business income minus deductions—you have to pay self-employment taxes, including Social Security and Medicare taxes.
When should I consider hiring a CPA if I’m self-employed?
If you’re worried you’ll make a mistake on your return or your return is very complex, consider hiring a certified public accountant (CPA). Here are a few scenarios where it may be better to turn your taxes over to a pro:
• You started your business during the current tax year.
• You have employees.
• You want to reduce your self-employment taxes.
• You want to max out your contributions to a SEP IRA.
What business deductions can I claim as a freelancer?
Freelancers can claim many deductions to reduce their tax liability. Depending on the type of work you do, the deductions you could claim might include:
• Credit card interest
• Training and conferences
• Self-employed health insurance premiums
• Business travel
• Cell phone services
How much should I put away for taxes if I am self-employed?
Typically, the amount you should set aside depends on your tax bracket and the tax deductions to which you may be entitled. As a general rule, it may be wise to set aside about 20% of your self-employed earnings, or you can use our self-employment tax calculator to estimate the amount.