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- For my 2018 taxes, I tested out multiple tax preparation tools online to find where I would save the most when filing my taxes.
- After a new tax law went into effect, I became eligible for a deduction on profits from my business. All tax software did not treat this equally.
- TurboTax correctly applied the Qualified Business Income Deduction, which saved me thousands on my taxes.
- Learn more about using TurboTax on Tax Day 2020 »
As a small business owner, I'm always looking for ways to squeeze more value out of the dollars I bring in the door. The new tax law that went into effect in 2018 was particularly friendly to business owners like me, but not all self-prepared tax programs handled that new law correctly.
Here's a look at what happened and why I'm using TurboTax again this year for my family's taxes.
All tax software should be the same
There is only one set of tax laws. If you enter everything correctly, one would assume your results would be the same no matter which tax software you use. Reading through the experiences of personal finance enthusiasts on Reddit shows that most people find that to be the case.
Because desktop, web, and mobile tax prep apps should be asking you similar questions to fill out the same forms, any differences between them should come down to rounding and be a few dollars or less.
Tax programs let you try them out for free, and only pay when you're ready to file, so you can even prepare your taxes more than once just to compare. Or for fun if you're a money nerd like me.
Tax prep results are not always equal
If you have somewhat unique circumstances, however, the results are not always equal. Last year, I tried doing my taxes a couple of times and found TurboTax gave me the best result by a fairly wide margin. I was expecting things to match up within $10 or so, but the difference came out to thousands of dollars.
I went through the questions again, multiple times, to look for any errors on my part. I did find a couple of small things to fix, but the difference in my taxes was still in the thousands.
I put on my accountant hat and started digging into the numbers. I found the difference was the brand new Qualified Business Income Deduction.
This new deduction gets business owners a 20% deduction on business profits. Because I operate as an S-Corporation, a significant portion of my income is business profits, so the difference in how it was treated was a big deal for me. The other tax software I tried didn't account for this deduction correctly.
TurboTax is best for business owners
Tax prep software from TurboTax, H&R Block, TaxAct (which I use for my business taxes), Credit Karma Tax, FreeTaxUSA, and TaxSlayer should all give you the same results. I can't try them all every year, but in my past tests, I have found TurboTax to be the best choice for business owners like me.
While it certainly isn't the cheapest, the forms, customer support, education resources, and results at TurboTax make it my first choice. My savings of thousands of dollars from the Qualified Business Income Deduction, however, was a clear reason to pick TurboTax regardless.
If you have simple taxes or qualify for the IRS Free File program, you will probably do just fine anywhere you choose to file.
Even business owners can do their own taxes
While I have corporate accounting experience, I've never been a professional tax preparer. I'm not a CPA. I don't have any tax credentials. Still, even without an accounting degree or certification, I find it very easy to do my taxes myself online.
I used to hire a professional tax preparer every year, but after finding mistakes that could have cost me hundreds of dollars or more, I decided to take over and handle my taxes myself. After all, no one knows my money better than I do.
If you're a small business owner, I enthusiastically recommend TurboTax for your personal tax return. It gives me the best overall experience and results. I'm already signed up to use it again this year. It's not the cheapest way to do my taxes, but it's money well spent.
Use TurboTax to file your personal tax return this year »
- More tax day coverage:
- When are taxes due?
- How to file taxes for 2019
- What is a tax credit?
- H&R Block vs. TurboTax
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