As a freelancer, for you to be managing your finances and keeping track of them can be a daunting task. I mean, from tracking income to calculating taxes, the financial side of freelancing can quickly become overwhelming. That’s where tax software comes in.
These tools are designed to simplify the complex world of taxes, helping you stay compliant with tax laws, maximize deductions, and save time and effort in managing your finances.
In this comprehensive review, we’ll explore the seven best freelance tax software for 2023, providing you with the information you need to choose the perfect tool for your tax management needs.
Why Freelancers Need Tax Software
Freelancers face unique tax challenges. Unlike traditional employees, freelancers are responsible for calculating and paying their own taxes. This includes income tax, self-employment tax, and in some cases, sales tax and other local taxes.
Additionally, freelancers often have fluctuating incomes, multiple clients, and various business expenses, all of which can complicate tax calculations.
Tax software can automate many of these tasks, ensuring accuracy and saving valuable time. It can help freelancers navigate the complexities of tax laws, identify potential deductions, and avoid costly mistakes.
Furthermore, many tax software offers additional features like income and expense tracking, financial reporting, and invoicing, making them a valuable tool for overall financial management.
What to Look for in Freelance Tax Software
When choosing tax software, there are several key features and considerations to keep in mind. First and foremost, the software should be easy to use, with an intuitive interface and clear instructions. It should also be reliable and accurate, ensuring that your tax calculations are correct.
Integration with other financial tools is another important feature. If you use other tools to track your income and expenses, the ability to import data from these tools can save you a lot of time and effort.
Similarly, if you need to pay taxes in multiple states or countries, look for software that supports multi-state and international tax calculations.
Expense tracking is a crucial feature for freelancers, as it allows you to keep track of your business expenses and easily claim them as deductions on your tax return. Similarly, the ability to handle multiple income streams is important if you have multiple clients or sources of income.
Finally, you want to consider the level of support the software provider offers. This includes customer support in case you have questions or encounter issues with the software and support in case of an audit.
7 Best Freelance Tax Software for 2023
1. TurboTax Self-Employed
TurboTax Self-Employed, a product of Intuit, is one of the market’s most popular tax software options. It’s designed specifically for freelancers, independent contractors, and small business owners.
Known for its intuitive interface and comprehensive features, TurboTax simplifies the tax preparation process by providing industry-specific deductions and step-by-step guidance. Users often praise its user-friendly design, comprehensive coverage of tax situations, and helpful explanations of tax laws and concepts.
- Expense and mileage tracking: Automatically track expenses and mileage, categorize them, and record them for tax purposes.
- Industry-specific deductions: Find deductions specific to your line of work to maximize your tax savings.
- Data import: Import financial data from various sources for a seamless tax preparation experience.
- Access to tax experts: Get answers to your tax questions from a team of experts.
- Audit support: Get guidance and support in case of an audit.
TurboTax offers three pricing plans:
- Deluxe: $60 for maximizing tax deductions and credits
- Premier: $90 for investments and rental property
- Self-Employed: $120 for personal and business income and expenses
Freelancers and independent contractors looking for a comprehensive, user-friendly tax solution with expert support.
2. H&R Block Premium
H&R Block Premium is a robust tax software that has been a trusted name in the tax preparation industry for over 60 years.
Offering a range of features tailored to the needs of freelancers and independent contractors, it provides real-time data on tax laws and offers the option for expert review.
Users appreciate its easy-to-use interface, comprehensive tax coverage, and the availability of in-person support at H&R Block offices.
- Real-time tax law updates: Stay updated with the latest tax laws to ensure accurate filing.
- Income and expense tracking: Easily track and categorize income and expenses for a seamless tax preparation experience.
- Expert review: Have your tax return reviewed by a tax expert before filing.
- Audit support: Get guidance and support in case of an audit.
- Data import: Import financial data from other tax services for a seamless transition.
H&R Block offers three pricing plans:
- Deluxe: $49.99 for maximizing tax deductions and credits
- Premium: $69.99 for freelancers, contractors, investors, and rental property owners
- Self-Employed: $104.99 for small business owners
Freelancers looking for a balance of affordability and comprehensive features with expert review options.
3. TaxAct Freelancer
TaxAct Freelancer is a cost-effective solution that has been serving taxpayers since 1998. Designed specifically for freelancers, it offers a range of features to simplify tax preparation and filing.
TaxAct is often recognized for its affordability, comprehensive tax resources, and helpful guidance throughout the tax preparation process.
- Year-round tax resources: Access a wealth of resources to help understand and manage taxes throughout the year.
- Deduction maximization: Identify and claim all possible deductions to ensure you don’t pay more tax than necessary.
- Comprehensive reports: Generate detailed reports to clearly understand your tax situation.
- Data import: Import data from other tax services for a seamless transition.
- Support: Get assistance with any issues or questions via phone and email support.
- Deluxe+: $47.95 for homeowners with deductions, credits, and adjustments
- Premier+: $57.95 for investments, rental property, and prioritized support
- Self-Employed+: $77.95 for business deductions, year-round planning resources, and tax specialists
Freelancers looking for a cost-effective, user-friendly tax solution with comprehensive features.
4. QuickBooks Self-Employed
QuickBooks Self-Employed is an all-in-one solution from Intuit, a leader in financial software. It integrates tax calculation and accounting, helping freelancers track income and expenses, calculate taxes, and file tax returns. Known for its robust features and seamless integration with TurboTax, QuickBooks is often praised for its comprehensive financial management capabilities and user-friendly design.
- Expense tracking: Automatically track expenses, categorize them, and record them for tax purposes.
- Invoicing and payments: Quickbooks allows you to create and send professional invoices and accept payments from clients directly through the platform.
- Tax calculations: Calculate the estimated taxes you owe each quarter to avoid surprises at tax time.
- Integration with TurboTax: Seamlessly transfer your financial data to TurboTax for easy tax filing.
- Support: Access robust customer support, including live chat and phone support.
- Self-Employed: $15 per month for basic features like tracking income & expenses, capturing & organizing receipts, and estimating taxes.
- Simple Start: $25 per month for all Self-Employed features plus sending estimates, tracking sales & sales tax, and managing 1099 contractors.
- Plus: $70 per month for all Simple Start features plus managing bills, tracking time, and tracking project profitability.
Freelancers who want an all-in-one solution for accounting and tax management.
FreshBooks is a cloud-based accounting solution that has been serving small businesses and freelancers since 2003. While it’s primarily an accounting tool, FreshBooks offers tax-friendly features like expense tracking, time tracking, and financial reports. Known for its intuitive design and comprehensive accounting features, users often praise FreshBooks for its ease of use, excellent customer service, and ability to manage all aspects of business finances in one place.
- Expense tracking: FreshBooks allows freelancers to easily track and categorize expenses, making it easier to claim deductions at tax time.
- Time tracking: The software includes a time tracking feature, which is useful for freelancers who bill clients by the hour.
- Invoicing and payments: FreshBooks makes it easy to create professional invoices and accept payments from clients.
- Financial reports: The software generates detailed financial reports, providing insights into your income, expenses, and profitability.
- Support: FreshBooks offers robust customer support, including live chat and phone support.
- Lite: $15 per month, which covers up to 5 clients
- Plus: $25 per month, which covers up to 50 clients
- Premium: $50 per month, which covers up to 500 clients
Freelancers who need a comprehensive accounting solution with tax-friendly features.
6. Zoho Books
Zoho Books is another best freelance tax software and part of the Zoho suite of business software. It’s a comprehensive accounting solution that offers a range of features for freelancers, including automatic bank feeds, a collaborative client portal, time tracking, and expense tracking.
Zoho Books is often recognized for its affordability, comprehensive features, and seamless integration with other Zoho products. Users appreciate its user-friendly interface, robust reporting features, and excellent customer support.
- Automatic bank feeds: Zoho Books can connect to your bank account to automatically import transactions, saving you time on data entry.
- Collaborative client portal: The software includes a client portal where you can collaborate with clients, share files, and get feedback.
- Time tracking: Zoho Books includes a time tracking feature, which is useful for freelancers who bill clients by the hour.
- Expense tracking: The software allows freelancers to easily track and categorize expenses, making it easier to claim deductions at tax time.
- Support: Zoho Books offers robust customer support, including live chat and phone support.
- Basic: $9 per organization per month
- Standard: $19 per organization per month
- Professional: $29 per organization per month
Freelancers who need a comprehensive accounting solution with a range of collaborative features.
Xero is a New Zealand-based company that offers a cloud-based tax accounting software platform for small and medium-sized businesses.
They provides robust accounting features with tax-friendly benefits, making it a great choice for freelancers who need comprehensive financial management.
Known for its beautiful and intuitive interface, Xero is often praised by users for its rich features, integration with a multitude of third-party apps, and real-time views of financial data. It’s designed to help freelancers manage their finances, prepare for tax season, and collaborate with clients and advisors.
- Invoicing and quotes: Xero makes it easy to create and send professional invoices and quotes and accept payments from clients.
- Bank connections: Xero can connect to your bank account to automatically import transactions, saving you time on data entry.
- Dashboard: The software includes a real-time dashboard that provides a glance overview of your financial situation.
- Expense tracking: Xero allows freelancers to easily track and categorize expenses, making it easier to claim deductions at tax time.
- Support: Xero offers robust customer support, including live chat and phone support.
- Starter: $20 per month with limited invoices, bills, and bank transactions
- Standard: $30 per month with unlimited invoices, bills, and bank transactions
- Premium: $40 per month with additional features like multi-currency accounting
Freelancers who need a comprehensive accounting solution with a range of superb features and a beautiful, user-friendly interface.
How to Choose the Right Tax Software for You
Choosing the right tax software depends on your specific needs and circumstances. Consider your budget, the complexity of your finances, and the level of support you need. Basic, affordable software may be sufficient if you’re just starting out as a freelancer and have a simple tax situation.
However, if you have a complex tax situation with multiple income streams, significant business expenses, and the need to file taxes in multiple states or countries, you may need a more advanced software.
Most importantly, choose software that makes tax management easier, not more complicated. The goal is to simplify your tax management, not add to your stress and workload. Each software option we’ve reviewed offers a unique set of fantastic features and benefits, so take the time to explore each one and find the one that’s right for you.
Managing taxes doesn’t have to be a headache for freelancers. With the right tax software, you can streamline your financial management, stay compliant with tax laws, and even discover potential tax savings.
The best tax software is the one that meets your unique needs and makes your life easier. So consider your needs, explore your options, and choose the right software for you. And remember, while tax software can be a valuable tool in managing your taxes, it’s always a good idea to consult with a tax professional if you have complex tax situations or specific questions.
In this comprehensive review, we’ve explored the seven best freelance tax software for 2023, each offering unique features and benefits. Whether you’re looking for a simple, affordable solution or a robust, feature-rich platform, tax software is perfect for you.
So take the time to explore these options, consider your needs (what you want to use them for), and make a conversant decision. After all, managing your taxes effectively is crucial to your success as a freelancer.
The bottom line is the world of taxes can be complex, but with the right tools and resources, it doesn’t have to be overwhelming. So arm yourself with the best tax software and take control of your freelance finances.