The best tax software for freelancers who do their own taxes

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Freelancing isn’t just sweatpants and snooze buttons.

Well, sometimes it is. But most of the time, it’s cabin fever, caffeine withdrawal, shaky cash flow and fierce competition for customers.

In summary, being your own boss is really hard work – and no time is more obvious than during tax season.

Compared to those with a typical 9 to 5 job or even small business owners, freelancers and self-employed people face a unique set of challenges when it comes to filing an annual tax return. For one, you need to keep complete records of all your business expenses throughout the year so you’ll be organized once it’s time to start preparing your return. Next, you need to compile all of your tax documents – from your 1099s to your Schedule Cs – and pay attention to all of your Ps and Qs. You are also responsible for completing the relevant documents yourself while hoping that you have not missed any tax deduction or relief. And, since the money isn’t automatically deducted from your paychecks throughout the year, you’ll also need to make and track your estimated tax payments each quarter.

Perhaps most frustratingly, instead of getting a tax refund like the 9 to 5 crowd, you may have to shell out extra cash to cover the year’s taxes in case your tax payments fail. estimated quarterly taxes would be a bit low. (Or even be penalized if you failed to pay them altogether.)

Oh, and don’t forget the federal self-employment tax you have to pay. Of course, it goes towards Social Security and Medicare, which is cool for Future You – probably maybe? – but not so fun for Current You.

Do you really need tax preparation software?

If your head isn’t already spinning after all that tax talk, consider the fact that a QuickBooks 2018 survey of 500 freelancers found that doing their taxes is one of the toughest challenges facing modern freelancers. It’s an obnoxious and tedious ordeal — so obnoxious and tedious, in fact, that more than a third of freelancers don’t even bother to pay taxes, according to the same survey.

Since tax evasion is somewhat of a crime, filing your return every year is in your best interest. However, simply filing your taxes is not enough. If you try to figure it all out on your own, you could still be hit with costly penalties and interest if you make a mistake. On the other hand, you can always go to a CPA and ask them to take care of your tax return for you, but their high fees could also cost you your pocket.

Fortunately, tax preparation software offers a happy medium between the two. After all, there’s no reason to make the tax filing process harder for yourself than it should be when this modern convenience exists – especially if you’ve just started freelancing or if you are newly independent.

What is tax software?

Tax software is a type of software designed to guide users through the process of preparing and filing their returns, and help them comply with tax laws while identifying all tax deductions and credits that may be available to avoid paying more tax than necessary. Essentially, it’s software that makes doing your own taxes less of a hassle.

Back then, tax software came in the form of a CD-ROM so it could be downloaded to your desktop computer. (Groovy.) These days, you can simply download a program from a trusted tax preparation company’s website. Or, even better, some tax preparation tools are available entirely online or through a mobile app for maximum convenience.

What should you look for in tax software?

As a freelancer or freelancer, you need to keep your eyes peeled for a few specific features while weighing your tax software options. These include:

  • A simple and user-friendly interface

  • A kind of accuracy guarantee

  • Solid customer support

  • Access to a tax expert, if necessary

  • An in-depth review process or tool with intuitive, guiding questions that help you find all possible tax deductions

Remember that you will also need to file your state taxes in addition to your federal taxes. Some tax software providers will include a state for free, but most will charge you per state where you need to file. With the growing popularity of remote work, it can really add up.

Also keep in mind that the cheapest tax software option is not necessarily the best tax software option. The program you choose should be robust enough to handle complicated tax filings, as those of freelancers and self-employed people tend to be quite involved. It should also be able to promise a high level of protection in case you are audited. In other words, now is not the time to be stingy: you want your taxes paid, but also done right. That’s not to say you should pay for features you don’t need, but just make sure your bases are covered, you know?

What is the best tax software for freelancers?

It depends. Would you like to deposit on a mobile device? Do you want to try your luck with free software? Are you depositing at the last minute? Ah, making decisions.

If you have a fairly straightforward tax situation or already have a few years of filing as a freelancer under your belt, you may be able to get by with a very inexpensive or even free tax filing service like Cash App. Taxes or FreeTaxUSA. However, if you need a little outside help analyzing more in-depth things like itemized deductions and the child tax credit, then more budget-friendly accounting software, like TaxAct or TaxSlayer, may be right for you.

On the other hand, if you have a more complicated tax filing situation or are a bit overwhelmed with the very idea of ​​starting your tax return, it may be worth choosing a more expensive tax software option. from the most trusted tax professionals. , such as H&R Block and TurboTax.

There’s a lot to consider among the many options available and we know you probably already have enough on your plate, so we’ve done the research for you. Here are the best freelance and self-employed tax software you can use to start preparing your taxes today.

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