The Benefits of Using Tax Software for a Small Business

Tax software for small business owners is a good option for tight budgets. It's better than preparing forms manually without any help, and reputable software programs are accurate and accepted by the Internal Revenue Service (IRS). It's not necessary for many startups or small businesses that don't earn a significant income to hire a small business tax accountant to file taxes. The benefits of using tax software make small business tax filings doable, if you're willing to put in the time to use it.

1. Finds All of Your Hidden Business Deductions

You'll lower your small business tax rate when you can find and maximize your deductions. The IRS has publications on its website,, for every type of business deduction available to small business owners. However, understanding it all or how to apply the information is overwhelming to many small business owners. A tax software program for small business simplifies the same information, and provides step by step guidance to find and claim deductions. The one you choose should ask questions about your business along the way, and calculate your deductions for you based on up to date small business tax laws. Don't use older editions of the software. An online tax software program may be your best option.

2. Makes E-Filing Easy

Most tax software for small business tax filings includes an e-filing feature. After you've had the opportunity to view your federal and state taxes, you're asked how you would like to pay for taxes owed, or how to receive your tax refund. You can then sign your returns with an electronic signature and file your taxes with the IRS online, using the tax software. It's secured, and the IRS approves it much faster than paper tax returns. E-filing is great for early birds who want to receive their tax refund early or pay their tax liability earlier rather than later. It also works well for small business owners who are filing close to the due date of the tax form they're filing. They don't have to worry about the hassle of mailing in forms with a paper check, especially if they're filing on the actual due date. They can take care of everything right from their home office computer.

3. Lowers Chance of Mathematical Errors

It wouldn't be a true statement to say that tax software programs are perfect, and free of mathematical errors. However, in almost all cases, the math is correct. Small business owners are more likely to make errors when doing the math manually than a tax software program. Companies that make and sell tax software for small businesses are covered by liability insurance in the event the program miscalculates and the business ends up owing more taxes to the IRS or has to legally defend itself. It's for this reason that most programs will check for errors before you can submit your returns to the IRS.

Choose a tax software for your small business that's affordable, continually updated and accessible online. These tend to be more reliable than others on the market.