Breathe a sigh of relief, as 2021's taxes aren't nearly as wrenching in terms of tax law changes as was 2020. Still, for those people filing taxes as the owner of a business, or a freelancer working as a contractor, there's a lot to take into account as you gear up for tax season.

Perhaps you spent all of last year working from home as a freelancer and now are contemplating, for the first time in your life, trying to claim the den as a workspace deduction. Maybe you took up a second source of income in the form of being a Lyft driver and now need to incorporate that ride-sharing income into your other business earnings. Perhaps you had to pay for employees who were suddenly only working part of the time because they were caring for a loved one with the coronavirus. What about digital assets? Did you put half your company's capital into Bitcoin, as a hedge against the chaos of the pandemic? How are you supposed to account for crypto?

For all of these needs and more, software makers such as Intuit and FreeTaxUSA are ready, willing and eager to offer you their packages designed for either self-employed situations or small businesses. Here is a rundown of the best five tax packages we evaluated.

TurboTax Self Employed

Best for wanting broad software compatibility

Perhaps the most recognizable name in tax software, TurboTax, owned by Intuit, proposes the Self Employed version for both those who are actually self-employed and for those who run a small business. The package is$89 for your federal filing and$39 for each state, if you choose to use it for state taxes. 

As with most offers, you can start working on Self Employed for free; you only pay once you're ready to file.

Among the primary differentiators for Self Employed is the inclusion of support for Schedule C/C-EZ, the main form for profit and loss from a business. In addition, home business expenses, health coverage, and small employer pension forms are included. 

TurboTax boasts functions for industry-specific deductions, such as for real estate, construction, or even ride-sharing. 

Intuit emphasizes the fact that it is ready for the new 1099-NEC form, the form you either use to pay your sub-contractors or the form you receive as a contractor from your client. You can snap a picture of your 1099-NEC with your phone and have it automatically uploaded to the software. The software also pledges to make it "a breeze" to enter data on the money you've earned from Uber or Lyft ride-sharing jobs.

TurboTax also comes with a live service that will connect you with a human tax expert. The company emphasizes that this can be an advantage for preparing quarterly taxes, as you can draw upon these individuals on an on-demand basis, year-round.

TurboTax has the broadest platform support among software, with downloads available for Windows 7 through 10, Mac "Mavericks" through "Big Sur," iOS, Android, and Chromebooks.

Pros

• Most extensive handholding to smooth your way through income and expense itemization.
• Most extensive platform support for downloads. 

Cons

• Pricier than many other offerings
• Features such as uploading tax documents can be hard to locate. 
• Self Employed version at$89 is the most expensive of the packages

View now at Intuit

TaxAct Self Employed

Free live advice

TaxAct

TaxAct's handling of small business problems is comparable to TurbTax, though some of the explanations, and some of the hand-holding is not as rich. On the other hand, TaxAct's online offerings are cheaper than similar offerings such as TurboTax, at$64.95 for the Self Employed version, excluding the cost of state filings. 

The program delivers fairly effortless preparation in its online program. For those who have a little bit of experience with their own profit and loss over many years, and a general familiarity with tax rules, the program is a good solution to quickly breeze through putting together a filing. 

Some tax forms are not finalized and may not be for another month, but TaxAct will let you get very far along in the process in just a couple of hours. That is, assuming that you have at least a rough idea of what is going to show up on your W-2s and 1099s, and what your expenses are.

There's an extra incentive to get started now, which is that TaxAct is offering its live human CPA assistance, Xpert Assist, for free to all users of any version of the program, including the self-employed package.

The ability to call upon a CPA with the click of a button is a nice addition to a solid offering, and making it free for early filers is a smart move on the company's part to feature this standout capability. The Xpert feature is available on each screen as a button in the upper-right corner of the Web page. That will let you chat with someone during the hours of operation, Monday through Friday, 8 am to 5 pm, Central Standard Time. The company is currently offering that feature for no extra charge, in contrast to the extra price usually attached for Xpert help.

The mobile app does a very good job as a companion to the online program on a smartphone or tablet.

On the downside, for some less-experienced tax filers, clearer language on each Web page would help to explain some of the ins and outs of filing, things such as expensing versus depreciating property.  

Pros

• Simple, efficient design for those familiar with the details of income and expense itemization
• Cheaper than some other offerings such as TurboTax
• Free live human assistance. 

Cons

• Some Web pages can be cryptic in their descriptions of tax terms
• State preperation fee of$44.95 per state is the highest of any package

View now at TaxAct

FreeTaxUSA

Best for wanting to maximize value for dollar

FreeTaxUSA emphasizes the value provided for free federal filings, including Schedule C and 1099 income and deductions, which it contrasts to the need to purchase upgrades from TurboTax and others. State form filing is$14.99 per state. The company promises that "customers get the same business write-offs, the same calculations, and the same tax refund as more expensive services."

The web-only online forms completion task guides users through a narrative set of questions about their business, such as "Do you need to enter information for another business?" when filling out business income. 

FreeTaxUSA will import prior-year returns from TurboTax or H&R Block rather than users having to key those in.

Similar to other services, TaxFreeUSA offers guarantees. They include refunding your fees and giving you a credit to future service if you can show another online service is able to get you a larger refund. The company also pledges to pay penalties and interest if any are incurred via the service. 

FreeTaxUSA also offers a Deluxe add-on option, for$6.99, that adds the ability to get priority in a chat queue for online support, and assistance with audits, and unlimited amended returns.

Pros

• Cheapest of any offering 

Cons

• Lack of mobile, downloadable offerings
• Lack of extensive human assistance. 

View now at FreeTaxUSA

Jackson Hewitt Online Tax Pro

Best for complex returns needing professional input

Unlike most online tax offerings, Online Tax Pro from, either as a web form or a mobile app, gives you a real, live human being to assist you via telephone or a secure chat channel, for an unlimited number of sessions, rather than leaving you in a do-it-yourself process.

Online Tax Pro began during the pandemic, on the premise that you still want an office visit, but you can't get there. The company apparently found that true, so they've continued the mixture of online filing with human assistance.

Jackson Hewitt emphasizes the time savings, the certainty, and the flexibility of the human element. 

Online Tax Pro this year has ditched tiered pricing in favor of an all-you-can-eat$99 fee. The company pledges to handle a return of any complexity with that fee.

The company offers a "lifetime accuracy guarantee," with reimbursement for penalties and interest in the case of a preparation error; and a "maximum refund guarantee," refunding the fees plus$100 if another preparer can show you deserve a higher refund.

In addition to the web version, you can use the mobile app for iOS or Android to step through the process.

Pros

• Simple pricing 
• Extensive network of physical offices should you want to have a real, live meeting with a preparer
• Partnership with Walmart allows for drop-off of your returns.

Cons

• Lack of mobile, downloadable offerings

View now at Jackson Hewitt

H&R Block Self Employed

Best for business owners needing hand-holding

H&R Block may be known best for its in-office tax professionals, but the company stresses you can both file and even run your payroll using its software. 

Self Employed is the top of Block's online filings option, costing$84.99 for federal filings plus$36.99 for each state filing. As with TurboTax and others, you can start free and pay when you file.

The primary differentiator here from other Block offerings is the itemization of business expenses and depreciation of assets. Block emphasizes both the breadth of its deductions expertise encoded in the software, as well as tax classifications pertaining to businesses, such as non-profit or trust. 

The user interface of the web forms is nicely laid out in terms of annotating each step of the way with additional information in a fairly easy-to-read format.

If you decide you want help from a pro, you can add online help from a live tax expert. Self-Employed Online Assist starts at$144.99. You can also drop-off your forms at an office without meeting face-to-face.

As an alternative to the web version, Block offers downloads. Premium and Business software for Windows, for$79.95, is the version it recommends for small businesses. That package has additional capabilities, such as the option to manage your payroll year-round.

Pros

• Simple, straightforward pricing
• Extensive network of offices if you decide you want to meet with a human 
  
• Downloadable and mobile apps

Cons

• Self Employed package at$84.99 is among the most expensive
  

View now at H&R Block

eFile.com Premier

Best for a low-cost do-it-yourself approach

eFile emphasizes the economy of its approach relative to TurboTax and H&R Block: The Premier edition, which is the one most suited to a business owner, is$35, plus$28 per state.

The package includes not just straight business income but also investment income, rental property income, and the myriad of income from partnerships encoded in the IRS's Schedules K-1. 

The Premier version offers live assistance via phone, webchat, and email. These are tax support specialists, as the company puts it, not CPAs. The company will also step in with human assistance in the event of an audit. 

The software is web-only.

View now at eFile.com

How did we choose these tax software options?

To evaluate the various offerings, ZDNet started from the self-evident fact that for a business owner, the process of income and expenses is always one of the most complex aspects of tax mechanics.

The previous tax year, 2020, introduced new forms for paying sub-contractors and other non-employees, form 1099-NEC , repllacing the prior option, form 1099-MISC. That may be a new situation if you're just came to freelance work in the tax year 2021. How the various software packages handle that wrinkle, other news situations, was top of mind as we looked at the software.

Is your home work space tax deductible?

For example, self-employed workers who were suddenly working entirely from home may have made the den or the unused bedroom exclusively a place of business. And that means it may be deductible. However, be sure to read ZDNet's home office deductions checklist. None of the software packages do a really good job of spelling out just what is, and what is not, allowable as workspace deductions, so your best bet is to understand the situation before starting the process. 

Can you get credit for COVID-19 disruption of your or your employees' work?

Businesses got new tax credits for 2020's tax filings that included what's called Paid Leave Credit For Vaccines to compensate a business owner if their employees took time to recover from having a COVID-19 vaccine. However, in November, congress passed what's called the Infrastructure and Investment Jobs Act. That new law limits tax credits for the fourth quarter of 2021 to  businesses defined as "recovery startup businesses. That means starting this tax year, your small business may not be able to file Form 7200 to claim the credits. Basically, you have to be incorporated after February of 2020 and have less than$1 million in annual sales. (More in the IRS's notice.) For the self-employed, a new form, 702, will let you claim tax credits for days unable to work, either because you were sick or you were caring for a family member.

Do you need to itemize cryptocurrency?

Last tax year, the Internal Revenue Service finally offered up new guidelines about cryptocurrencies. Accounting for your crypto holdings maybe a relatively new thing if you jumped into the crypto market in 2021 like a lot of people. The short answer is that for tax purposes, you must record gain or loss on sales of crypto just like any capital gain. More on the ins and outs in the IRS's FAQ for crypto. 

Also: Cryptocurrency 101: What every business needs to know

How much should you pay for tax software?

Next, we looked at the economics of these packages, how much they cost. The pricing obviously ranges from free to several hundred dollars, and what is a good deal depends on how complex things are given the preceding points, for each individual business.

Should you file on your own or get expert help?

The last factor is whether a business owner will be filing entirely on their own. Depending on your level of comfort filling out forms, a free service such as FreeTaxUSA may be all you need. Offers of live assistance are being pushed aggressively by Intuit and TaxAct this year. TurboTax is offering thier "TurboTax Live" feature, to chat with a human assistant, for$199, and you pay only when you file. TaxAct is offering its Xpert Assist Service, where you can get input on your preparations, for free at the moment, though it reserves the right to revoke that offering at any time. Both products offer "full service" human preparers as something you can start without paying, though the final price is much higher than the standard,$279.95 for TaxAct's Xpert Full Service Self Employed, and$389 for Intuit's TurboTax Live Full Service Self Employed.

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