The best tax software for freelancers doing their own taxes

Freelancing isn’t all sweatpants and snooze buttons.

Well, sometimes it is. But most of the time, it’s cabin fever, caffeine withdrawal, fickle cash flows, and fierce competition for clients.

When you boil it down, being your own boss is really hard work — and no time is that more apparent than during tax season.

Compared to those with a typical 9-to-5 job or even small business owners, freelancers and self-employed workers face a unique set of challenges in terms of filing an annual income tax return. For one thing, you need to maintain thorough records of all your business-related expenses throughout the year so that you’re organized once it’s time to start prepping your return. Then, you have to compile all of your tax documents — from your 1099s to your Schedule Cs — and mind all your Ps and Qs. You’re also responsible for completing relevant paperwork on your own while hoping-slash-praying that you haven’t missed any deductions or tax breaks. And, since the money isn't automatically deducted from your paychecks throughout the year, you'll have to make and keep track of your estimated tax payments each quarter, too.

Perhaps most frustratingly, instead of getting a tax refund like the 9-to-5 crowd, you may actually need to cough up extra money to cover the year's taxes in the case that your quarterly estimated tax payments were a little low. (Or even be penalized if you neglected to pay them altogether.)

Oh, and don’t forget about the federal self-employment tax you’re required to pay. Sure, it goes toward Social Security and Medicare which is cool for Future You — probably maybe? — but not so fun for Current You.

Do you really need tax preparation software?

If your head isn’t already swirling from all that tax talk, consider the fact that a 2018 QuickBooks survey of 500 freelancers found that doing one’s taxes is among the most difficult challenges facing modern self-employed workers. It’s an obnoxious, tedious ordeal — so obnoxious and tedious, in fact, that more than a third of freelancers don’t even bother paying taxes, according to the same poll.

Since tax evasion is sort of a felony, filing your return every year is in your best interest. However, simply filing your taxes is not enough. If you try to figure it all out on your own, you could still be hit with costly penalties and interest if you make a mistake. On the other hand, you could always go to a CPA and have them take care of your income tax return for you, but their high fees could burn a hole in your pocket, too.

Fortunately, tax prep software offers a happy medium between the two. After all, there’s no reason to make the tax filing process harder on yourself than it needs to be when this modern convenience exists — especially if you've just begun freelancing or are newly self-employed.

What is tax software?

Tax software is a type of software program that’s designed to guide users through the process of preparing and filing their returns, and help them comply with tax laws while identifying any and all tax deductions and credits that may be available to avoid paying more in taxes than necessary. Essentially, it’s software that makes it less taxing to do your own taxes.

Back in the day, tax software came in the form of a CD-ROM so it could be downloaded to your desktop computer. (Groovy.) Nowadays, you can just download a program from a trusted tax prep company’s website. Or, even better, some tax preparation tools are available completely online or via mobile app for maximum convenience.

What should you look for in a tax software program?

As someone who’s freelancing or self-employed, you need to keep your eyes peeled for a few specific features whilst weighing your tax software options. These include:

• A simple, user-friendly interface

• Some sort of accuracy guarantee

• Solid customer support

• Access to a tax expert, if needed

• A thorough review process or tool with intuitive, guiding questions that helps you find all possible tax deductions

Don’t forget that you’ll also need to file your state taxes in addition to your federal taxes. Some tax software providers will include one state for free, but most will charge you per state where you need to file. With the growing popularity of remote work, that can really add up.

Also keep in mind that the cheapest tax software option isn’t necessarily the best tax software option. The program you choose should be robust enough to handle complicated income tax returns since those of freelancers and self-employed workers tend to be pretty involved. It should also be capable of promising a high-ish level of protection in case you’re audited. In other words, now’s not the time to get stingy: you want to get your taxes done, but also done right. That’s not to say you should pay for features you don’t need, but just make sure your bases are covered, you know?

What’s the best tax software for freelancers?

That depends. Do you want to file on a mobile device? Do you want to take a chance with free software? Are you filing last-minute? Decisions, decisions.

If you have a pretty straightforward tax situation or you already have a few years of filing as a freelancer under your belt, you may be able to get away with a very low-cost or even free tax filing service like Cash App Taxes or FreeTaxUSA. However, if you need a little outside help as you suss out more in-depth stuff like itemized deductions and child tax credit, then a more budget-friendly accounting software, like TaxAct or TaxSlayer, may be up your alley.

On the flip side, if you have a more complicated tax filing situation or are a little overwhelmed with the thought of even beginning your income tax return, it may be worth it to choose a higher-cost tax software option from the most trusted tax professionals, such as H&R Block and TurboTax.

There's a lot to consider across the many options out there and we know you probably have enough on your plate already, so we’ve done the research for you. Here are the best tax software programs for freelancers and self-employed workers that you can use to start preparing your taxes today.