If you’re self-employed, you get to be your own boss -- but also you’re on your own when it comes to handling your taxes.
Business expenses, multiple 1099-NEC forms, Schedule C, the federal self-employment tax -- the complications for small business owners, freelancers and gig workers can make filing taxes a bear, not to mention more expense. Some tax software options require pricey upgrades for access to the necessary IRS forms for freelancers, though those extra costs sometimes also bring help and support from self-employment tax experts.
With a little guidance, you can find tax software to help file your self-employed tax return without breaking your budget. Read on to find our top picks for tax software for freelancers, gig workers and other self-employed tax filers.
For more on income taxes, learn how to file your taxes for free and check out the biggest tax changes for 2023.
TaxSlayer provides freelancers with all the necessary IRS forms, plus extensive support from self-employment experts, all for a much lower cost than bigger-name competitors TurboTax and H&R Block.
The Self-Employed plan at TaxSlayer includes priority phone and email support, live chat and access to a tax professional with self-employed tax experience. As with similar software, TaxSlayer doesn’t guarantee you’ll speak with a certified public accountant, or CPA.
TaxSlayer has a polished interface, solid help, live support and a smooth process for completing all the necessary sections of your tax return. It offers accuracy and maximum refund guarantees, plus three years of assistance with audits.
For more details, read CNET’s full review of TaxSlayer.
There are a lot of value propositions for taxpayers looking to complete their tax returns without the shiny bells and whistles of the more expensive products. While products like TaxSlayer, H&R Block and TurboTax won’t provide the forms freelancers need without a pricey upgrade, discount options like TaxAct, Cash App Taxes, and my top value choice, FreeTaxUSA, offer all the forms most freelancers need to file taxes, at a much lower cost.
FreeTaxUSA is completely free for federal tax returns; each state return you need to file will cost $15. It uses a no-nonsense interview process to complete your tax returns quickly and easily, and offers live support for an additional $8.
I chose FreeTaxUSA as the best value tax software for freelancers because it offers a wider range of IRS forms, allows multiple state returns and includes more extensive help and support features than Cash App Taxes, CNET’s pick for best free tax software.
For more, read CNET’s full review of FreeTaxUSA.
TurboTax is CNET’s top choice for best tax software for 2023, but you’ll have to pay for the privilege of using the industry leader. The Self-Employed TurboTax plan starts at $119 for a federal tax return and $59 for each state return.
You can add live help from a tax expert for $209 for your federal return and $64 per state return, or pay $399 for your federal return and $64 per state return to have a tax expert to complete your returns for you. You can start and mostly complete your tax return on TurboTax for free -- you only have to pay when you file, unless you add extra support features that you use while filling out your return. And, this year, you can add some hobby and self-employment income like 1099-Ks with TurboTax Free, but you’ll need to upgrade to Self-Employment to maximize business deductions.
TurboTax excels due to an intuitive interface, an efficient questionnaire process, and extremely comprehensive help and tax documentation. Most notably for freelancers with multiple income forms, you can snap photos of all your 1099 forms for instant uploading. Many of the cheaper or free tax software products require entering all of those forms by hand.
Note: You can only file your taxes for free with TurboTax if you have a simple return. Not all taxpayers qualify.
For more information, read CNET’s full review of TurboTax.
What does tax software do?
Tax software helps break down complicated tax laws and jargon, so you can complete and file your tax return with the IRS. Most tax software options walk you through the tax filing process with an interview format and then fill in the corresponding tax forms on your behalf. The tax code for 2022 includes several changes to deductions and credits. The best tax software will take into account all the tax rules and laws to automatically calculate your tax refund.
Tax software will either file your tax return with the IRS electronically or allow you to print your tax return for mailing. Tax programs also let you enter your direct-deposit information so that the IRS can send money straight to your bank account.
Why do freelancers need to use tax software?
If you freelance, have a side hustle or own your own business, you’re responsible for paying your share of income tax, along with self-employment tax. Freelancers typically do not have taxes withheld from their earnings and figuring out the exact amount you owe can be tricky. Tax software can help guide you through your tax requirements if you have freelance income.
You may also be eligible for a variety of self-employment tax deductions, including the cost of office supplies, travel costs, industry subscriptions and more. You’ll need to itemize your taxes in most cases, and the right tax software can help streamline this process.
It’s worth noting that if you have multiple streams of freelance income, complicated self-employment taxes or feel unsure about the tax filing process, it may be less expensive and more helpful to hire a CPA instead of using tax software.
How to choose tax software if you’re self-employed
When filing your self-employment taxes, you want to make sure you use tax software that’s easy to use, helpful, affordable and has all the tax forms and features you need. Audit protection and access to a tax expert may be crucial when filing complicated tax returns. Here are a few factors to keep in mind when choosing the right self-employment tax software:
Ease of use
You want to make sure the tax software you chose has an intuitive interface that makes it easy to navigate throughout the tax filing process. With self-employment taxes, it may also be important to have access to a live chat or frequently asked questions that help you troubleshoot any issues along the way. While TurboTax and H&R Block have clean, easy-to-use interfaces, we also think TaxSlayer, our top pick for self-employed individuals, is simple to navigate.
This is a major factor you should consider before purchasing tax software. Most tax software options offer tiered payment plans -- and if you have self-employment income, you typically have to pay for the most expensive tier, which can cost hundreds of dollars. One reason why we selected TaxSlayer as our top choice for self-employment taxes is that it costs just under $100 to file a state and federal return for this tier. H&R Block also charges just over $100 for state and federal self-employment taxes, while TurboTax starts at around $180 for this tier.
If you want support, you’ll also pay even more, depending on the tax software you use. We recommend considering a CPA if you have complicated or self-employment taxes, since they can offer specialized support and are often the same price -- sometimes even less -- than tax software plans with expert support.
If you want to have a tax expert double check your return or want on-demand support while filing your taxes, it’s important to compare the different customer support options and pricing available.
Some tax software companies offer online chat support while others have a phone number you can call with pressing tax questions. But this support often comes with a higher price tag. Do the math before signing up to determine if tax software or an accountant make more sense for your filing situation.
If you’re self-employed or a gig worker, you’re allowed to deduct “both ordinary and necessary” expenses related to your work, per the IRS. An ordinary expense is one that’s familiar to anyone in your industry and claimed by other self-employed tax filers. A necessary expense is one that’s absolutely required in order for you to work.
Depending on the specifics of your work, you can deduct all sorts of expenses. Office supplies, travel costs, software, internet service fees, vehicle expenses, insurance costs, advertising and legal services are some of the most common business expenses for the self-employed.
Accurately organizing and reporting your business expenses is a good way to reduce your overall tax burden and increase the size of your tax refund. Be warned, however, that self-employed business deductions are a red flag for IRS audits -- make sure to keep all of your receipts and documentation.
Almost all American taxpayers can file their tax returns for free, and some have a choice of several options. If your adjusted gross income is $73,000 or less, you can use the IRS Free File program.
Both Cash App Taxes and FreeTaxUSA will let anyone file a federal tax return for free. Cash App Taxes also offers one free state return, while FreeTaxUSA charges $15.
Other commercial software like TurboTax and H&R Block do offer free versions of their software, but they are limited in scope and service. Most free versions of paid software do not include the forms that self-employed taxpayers need to complete their tax returns. The Federal Trade Commission has recently filed a lawsuit against TurboTax for misrepresenting its free services in its advertising.
Freelancers generally receive IRS 1099-NEC forms that detail their taxable income from various payers. Less common are 1099-MISC forms that report miscellaneous income like rents or attorney payments.
If you earned more than $20,000 or had 200 or more transactions from online payment services in 2022, you’ll receive a 1099-K form. More freelancers were supposed to receive this form this tax season, but the IRS has postponed this rollout.
When filing their tax return, most freelancers will need to complete IRS Schedule C, Profit or Loss from Business. Self-employed workers should use that form to report their taxable income and business expenses for tax deductions.
CNET reviews tax software by comparing products across a set criteria. We use the software to prepare personal tax returns, examine tax products’ terms and offers, communicate with software representatives to resolve questions about products, compare feature sets and analyze each software for its effectiveness in common tax situations.
We consider the features and functionality of the tax preparation software, the user experience, the software interface, website performance, quality of help and support, and the value based on price. We are also looking for and evaluating specific features, including file importing or photo capture of forms, number and type of available IRS forms and schedules, contextual help, desktop and phone/tablet compatibility and syncing, professional tax assistance, maximum refund and accuracy guarantees, live support and security protections.
Specifically for best tax software for freelancers, we consider the number and types of IRS forms and schedules related to freelance work that are included with tax software, the level of support and help directed toward freelance tax filers, and the additional cost required of self-employed tax filers.
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