Using tax software can save you significant time and money. For many small business owners, reviewing deductions and tax forms can be overwhelming. Business tax software includes step-by-step instructions and worksheets designed to help business owners take control of their business taxes.

With so many options available, choosing a provider of tax software for business use can be time-consuming. Evaluating your company needs is the first step in determining which tax software programs will work best for you. Do you buy tax deductible equipment? Is your company a sole proprietorship, a partnership or filed as an LLC? Do you have employees or work at home? These are some of the questions you need to answer when choosing a tax software provider to use. Regardless of which tax software provider you select, there are some real advantages to using tax software systems, such as the following:

1. Choose from a variety of tax software programs available to meet your filing and budgetary needs.

2. Tax software programs offer instructional guides to save you time.

3. You can use tax software for year-round finance tracking.

Action Steps
The best contacts and resources to help you get it done

Pick the tax software that offers business-friendly features

Many tax software providers offer a range of software features designed to meet each users' unique needs. For example, a sole proprietor tax software version may not include all of the forms that a corporate business version would. Don't go cheap. Read up on the features and functionality of various tax software programs carefully and use the one that most closely matches your tax filing needs.

I recommend: Read more about using tax software by visiting CNET. Check out Residual-Rewards to learn more about business tax software solutions.

Use tax software to stop printing and mailing tax forms

One of the most convenient features of tax preparation software is that you can e-file. E-filing allows you to use your professional tax software to complete your tax returns and securely send your returns to the Internal Revenue Service all from your computer. Some suppliers of tax software also offer online services that don't require that you download software to your computer.

I recommend: Read more about using this type of tax software by visiting Financial Web. Check out GettingFinancesDone.com to compare features of various tax software programs such as TaxCut from H&R Block and TurboTax from Intuit. By comparing prices, you can better determine which tax software will be of the best use while still getting a good deal.

Use tax software to do more than file your taxes

In addition to filing your annual tax returns, tax software can help you manage other aspects of your business finances. Many tax software providers offer compatible accounting software to help you maintain your finances throughout the year and save time by transferring data directly to tax return forms.

I recommend: Visit National Federation of Independent Business to learn more about using tax software for business programs. Check out Consumer Reports to read more about yearlong tax strategies using two of the most popular tax software platforms.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Don't fire your accountant. Accountants are knowledgeable about tax code and can help you uncover potential tax savings. While using business tax software is a great way to manage your tax deductions, maintain tax forms and pay quarterly taxes, tax preparation software lacks in helping you find ways to cut tax burdens.

Sure, you can still do all of your tax preparation manually, but you can spare yourself the trouble when tax preparation software can do much of the drudge work for you. For a small, simple business — particularly a sole proprietorship — some basic tax preparation software might be enough to handle just about all of your needs, leaving you more time to focus on building and expanding your business.

Tax preparation software can:

1. Simplify and speed up the preparation of state and federal business income taxes
2. Make it easy to e-file your returns
3. Help you claim proper deductions
4. Help you deal with payroll taxes
5. Help you deal with sales and use taxes

Action Steps
The best contacts and resources to help you get it done

Assess your needs

Is your business small and simple? Expanding and complex? Are you a local operation, statewide, national, international? The size and complexity of your business will dictate how powerful your tax preparation software needs to be.

I recommend: Start by making a list of the taxes you may be responsible for paying or collecting. These should include federal, state and local income taxes; payroll taxes (if you have employees); and sales taxes. Business Owner's Toolkit has tips on determining your requirements.

Find income-tax software

Income tax software has become more sophisticated, particularly in dealing with businesses and business tax deductions. Look for a system that includes regular updates and a good online help service. Some major software providers have demos of their products online.

I recommend: A site like Amazon or Office Depot has descriptions of tax preparation software. You can also go on the sites of the more popular software packages like TurboTax or TaxCut and look for offerings geared toward small business owners.

Find payroll-tax software

If you have employees, you'll need to deal with withholding of income taxes and a number of other taxes. Fortunately, there are software programs that can do most of the work for you. Many payroll software companies have you use their software online for a monthly fee.

I recommend: Mastertax offers a complete payroll software package. Paychex, Paycycle and ADP all offer their automated payroll solutions to small businesses.

Find sales-tax software

Sales and use taxes differ by state and community, so it's important to assess the right amounts. Fortunately there are numerous software solutions to meet just about any need. Be sure your software provider gives regular updates to track changes by taxing authorities.

I recommend: One of the biggest providers of sales tax solutions is Sabrix. Numerous other companies compete in the sales tax space, including Independent Systems and Burr Wolf.

Going global

Today's global economy presents new opportunities for small business, but it also poses new problems in dealing with foreign sales and use taxes. Software solutions can help you cut through the overseas clutter.

I recommend: The leading supplier of global solutions, Sabrix, has an online service that lets you test-drive the system.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Shop for a system that delivers regular updates on changes in tax laws and requirements.
• •  Make sure your computer system and the software you select are compatible.
• •  Software with lots of bells and whistles can be nice, unless it makes the software unnecessarily complicated, which can be frustrating and time-consuming.
• •  If possible, test-drive software before you buy. Some retailers and online sites offer demo versions.
• •  Ask trusted business associates and acquaintances for recommendations.

Business tax software is an excellent choice for business owners who want to do their own taxes. Tax preparation software allows you to easily file taxes with a choice file, or you can use features that guide you through the various deductions available for businesses. This way you know your company is filing legally, and getting the maximum deductions possible.

Many tax software programs are easy to use, but there are also many training opportunities for businesses that want to learn more. You can purchase tax software for business as part of a typical software package, or get it online. There are many online tax software education and training opportunities, including:

1. Tutorials that walk you through the program features.

2. Videos that show you how to use a tax software program.

3. Online training courses for tax software programs.

Action Steps
The best contacts and resources to help you get it done

Take courses to learn about tax software systems

Classes on tax software systems will give you the most comprehensive look at this type of program. Taxes are often very confusing, even for those who know how to file. These courses let professionals and business owners learn how to best utilize these programs for fast, efficient and correct tax filings year after year.

I recommend: Interactive Computer Training provides training courses at its Maryland and Washington DC locations that teach professionals how to use QuickBooks and ProSystem Tax. Taxworks offers Power Training Seminars to teach users of Taxworks how to best utilize its program.

Explore training videos for tax software for businesses

Training videos are quick learning tool for businesses and professionals who need to learn about a variety of tax programs. These videos provide information and training on specific topics. Some videos may also include a basic overview for beginners.

I recommend: Drake Software offers a host of video tutorials that can teach you about different features in Drake Tax Software. Expert Village offers a video on how to file taxes online using many types of tax software.

Find tutorials that teach you to use professional tax software

Professional tax software providers usually offer some type of training and support for their programs. Most training comes in the form of written and video tutorials. Tutorials are a great self-guided tool for learning the features and functions of tax software. They are also a helpful reference to have around while using the program.

I recommend: Lacerte offers many self-paced tutorials that can teach you to use its Tax Planner and Tax filing programs. Auto Efile offers a variety of tutorials to help companies file taxes with its Auto eFile 1040 software program. These tutorials include how to file specific returns in a variety of states.

Businesses need to file income taxes every year, just like individuals do. Therefore, you need to learn what is required to file a business 1040. You should probably choose an income tax software package to prepare you business 1040s. You'll need payroll tax software, if you have employees, to make filing easier on yourself, and to make sure you pay the proper amount.

If your business is incorporated, look into corporate tax software and find sales tax software to keep you on track and legal. Global tax software or software solutions will make sure you pay the right taxes if your business deals with foreign countries. Finally, look into e-filing so you can get refunds faster if they are due you.

Action Steps
The best contacts and resources to help you get it done

Income tax software

There are many income tax software programs to choose from, so make sure the one you finally buy works best for your needs.

I recommend: CNET has a guide to help you select the best software for your business. Residual-rewards.com offers helpful information that can help you pick the best tax software.

Payroll tax software

If you have employees, then you need to deal with payroll taxes. Using payroll tax software makes the job much easier, since it can handle both federal and state employee taxes.

I recommend: Payroll Mate has a wizard to guide you through its program. It not only calculates Federal Withholding Tax, Social Security and Medicare Taxes, but also state payroll taxes, as well.

Sales and use tax software

Many states and municipalities have sales and use taxes that your business must charge customers. Therefore, you need to find sales tax software that will keep you up to date, so you don't get into any trouble with collecting and paying the tax.

I recommend: ADP makes software that can help you collect and pay the appropriate sales and use taxes.

Global tax software

If you deal with companies overseas, check out global tax software to be sure you pay the correct foreign taxes.

I recommend: Sabrix is a leader in global tax software, and it provides a demo you can try to see if the program is right for your business.

Corporate tax software

If your business is incorporated, you may need to file other taxes than ones listed above. To make sure you are completely compliant, find tax software that will cover you, no matter what your circumstances are.

I recommend: Corptax offers the most complete professional tax software you can find. See if it’s the corporate tax software you need for your business.

E-file

Many businesses and individuals take advantage of e-filing to save money and get their refund faster. However, if you have to pay, the old-fashioned envelope and stamp may be the best way to go, since it gives you a little more time.

I recommend: FinancialWeb has information about tax software programs, as well as e-filing and its benefits.