Freelancing part-time or full-time can help you earn extra income. But a major drawback is handling invoices and taxes on your own. Not everyone is skilled at crunching numbers and managing the accounting side of their small business or side-hustle.
A good tip is to get tax software that can guide you through the process as soon as possible—rather than procrastinating when tax season draws near. That way, you don’t have to worry about compiling invoices, organizing tax receipts, and finding the right solution at the same time.
How do you choose a tax software platform for 2022? Before we dive into the best tax software for self-employed freelancers, let’s discuss a few tips for choosing the right option for your business.
How to Choose the Best Tax Software For Freelancers
Most tax software solutions have a lot to offer. To choose the best fit for your business, consider the following factors:
1. Consider Your Needs
Choosing a tax software solution can be an intimidating endeavor for freelancers doing side hustles for the first time. Even if the price might be a big factor, make sure that the solution fits your needs.
Here are some questions to consider:
- Does it offer support for the forms that you need to file?
- Do you need to get in touch with a tax professional?
- Is there a tool that can help you identify potential tax deductions?
- Does it offer quality customer service and support?
2. Guiding Questions
The best tax software platforms let you answer comprehensive questions while completing the tax form at the same time. Meanwhile, others digitize the process but require a more hands-on approach. The solution you choose should cater to your preferred process—whether you want maximum or minimum involvement.
3. Easy-To-Use Interface
A less-than-ideal or complicated tax software solution could lead to costly errors and deductions. To figure out if the solution is right for you, check out tutorials or try a free plan with limited options.
Then, consider the following questions:
- Does the software have a complicated interface?
- Is it easy to use?
- Is the onboarding process fast?
If you can file taxes with ease, it’s probably worth purchasing. Otherwise, consider another tool for your business needs.
4. Access to a Tax Professional
Besides having reliable software, most freelancers want access to certified tax professionals or Certified Public Accountants (CPAs). In this case, the right solution should be able to give you access to a dedicated expert that understands your tax situation.
There are many ways to get in touch with a professional—virtual, meeting with a tax pro, or one-on-one appointments. Not every solution will offer these services, but you can also hire a Ndiwano tax expert to answer your questions and file taxes for you.
Sometimes busy professionals don’t have time to handle their own tax returns. With that in mind, you may prefer a platform that lets you upload the relevant documents and get a reliable professional to do the rest.
5. Quarterly Tax Reminders
Unlike employees that automatically get taxes deducted from their checks, freelancers and self-employed professionals have to pay quarterly tax on the state or federal level.
When you’re managing a business, it’s easy to forget that taxes are due. The best tax software should be able to send notifications or reminders that prompt you to pay on time. Otherwise, you’ll face an additional penalty.
As a freelancer, you have more forms and invoices than a typical filer. This means you’ll have to opt for pricier plans to track the receipts and tax dues of your small business. Plus, extra fees if you want to seek help from a certified tax professional.
Despite your limited budget, the extra cost is worth it. A reliable solution can help you get reimbursements and save you hundreds or thousands of dollars in your return.
New players in the tax industry may have cheaper services. However, there are well-known software platforms that have built a solid reputation—so every penny is well-spent.
Top Tax Software For The Self-Employed & Freelancers
Now, here’s are some of the best tax software platforms that freelancers can choose from.
1. H&R Block
H&R Block is a popular tax software solution used by freelancers and small businesses. The software supports several federal forms and state forms, allowing users to finish their tax returns accurately and correctly. Best of all, you can get the maximum refund each time.
If you want to file taxes with a pro, H&R Block’s Self-Employed Online Assist service can connect you with a certified tax professional on-demand. You can get personalized guidance and tools to save money and communicate via screen sharing, chat, or video. Alternatively, you can opt to meet a tax professional in an office, gather your docs and let them do the rest.
Interested freelancers can try their free plan with limited features. Paid plans start at $29.99, and full-time freelancers can opt for a self-employed online plan starting at $84.99.
Whether you’re a side-hustler, freelancer, or self-employed professional, TurboTax has got you covered.
Freelancers can answer simple questions and get matched with the right forms. Alternatively, you can snap a photo of your W-2 or 1099-NEC, and the AI will input the details in the right places. More importantly, it can also search and apply over 500 tax deductions to save more dollars.
Looking to work with a pro? TurboTax has a live chat service that lets you connect with an expert or schedule a video call. For zero hassle, hand off your taxes to a CPA professional via the platform—and let them handle the rest.
Turbo tax has a free edition for simple tax returns, while paid plans start at $39. You can visit their website and answer their “select all that apply” section to know the ideal plan based on your situation.
TaxSlayer has a self-employed plan for side hustlers and contractors who need assistance in filing their 1099 and W-2. Just create a free account, and the platform can guide you through finishing your 1099. To avoid late payments and fees, TaxSlayer also gives tax payment reminders so you can complete the process correctly and on time.
Freelancers each have their own concerns in regards to taxation. The good news is you can consult with a tax professional with self-employed or freelance expertise to get the answers you need. In the case of an IRS audit, the platform offers defense and legal representation.
Tax Slayer has a free plan which includes one free state and federal return. Unlike their competitors, TaxSlayer has cheaper paid plans which start at $17.95, while their self-employed plan is priced at $47.95.
Tax Act Self-Employed is a tool that lets freelancers fill up their 1099-NEC, 1099-MISC, or 1099-K with ease. A Tax Deduction Minimizer lets you take advantage of tax deductions applicable to your unique situation. Plus, their Tax Act inspects your return for potential errors to minimize your risk of getting an audit. The full list of forms supported is available on their website.
Much like its competitors, TaxAct offers unlimited assistance from CPA and tax experts. Their Full Service feature connects you with a professional who can prepare, sign and file your taxes for you.
TaxAct has free plans for simple filers and dependents. Their premium options begin at $24.95, while their self-employed plan for freelancers or contractors starts at $64.95.
Shoeboxed is an expense tracker that can transform your receipts into data. It’s best for freelancers and independent contractors who want to digitize paper-based invoices. Once you have placed all your receipts, you can categorize them based on vendor, total spent, date, and payment type.
All this information is used to make comprehensive expense reports which have digital images of your receipts. Since all receipts are accessible, you can easily file taxes or reimbursements.
Shoe boxed can be integrated with popular accounting programs, including Quick books and Wave. You can also import or archive receipts from Gmail into Shoebox—so they never get lost in the midst of numerous files and paperwork.
Shoeboxed’s startup plan begins at $18 per month, and it’s highly recommended for freelancers. You can digitize up to 600 digital documents and 400 physical documents on an annual basis. Unlike its competitors, you can’t use it to connect with tax experts, which may be a drawback for freelancers that want additional help for tax returns.
Which Tax Software Platform Will You Choose?
The right software should have a user-friendly interface and let you handle taxes with ease. Even if it’s your first time, you should be able to file relevant forms correctly. And if you need a pro, you must be able to get in touch with a certified expert in an instant.
Regardless of the solution you pick, we recommend using Ndiwano Workspace to manage your invoices. The business management software platform is a tool that can help freelancers to organize and streamline the operational aspects of their work. You can use it for seamless invoicing and automated task management, as well as access contracts and proposals templates.
You can also get in touch with a Ndiwano tax expert to get answers to your inquiries and get taxes handled for your freelance career. With these Ndiwano services, you’ll be able to manage your finances and taxes with zero hassle.
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