Do any free file tax softwares support business filings like 1120S, or just personal returns?

Is there any middle ground? Like maybe software that's not free but still cheaper than the premium packages? I heard some accountants charge $800+ for S-corp returns which seems crazy for my tiny business.

There are some mid-tier options worth considering. Software like TaxAct and TaxSlayer have business editions that are typically less expensive than TurboTax Business, often in the $70-110 range. They handle the basic requirements for most small S-corporations. If your S-corporation is very simple with minimal transactions, these mid-tier solutions could work well. Just be aware that what you sacrifice with lower-cost options is usually ease of use and comprehensive guidance, which might matter if your business has complex situations.

Does it handle state filings too or just federal? My state has some weird requirements for S-corps.

I'm a little suspicious of AI tax software. How do you know it's getting everything right? Does it have some kind of guarantee if you get audited?

It handles both federal and state filings for all 50 states. I'm in California which has some complicated requirements, and it walked me through everything specific to my state without issues. As for accuracy, they offer audit protection and have tax professionals who review anything the AI flags as unusual. I was skeptical too but their verification system is really thorough - it caught a mistake I would have definitely missed about depreciation on some office equipment.

How exactly does this work? Do they just call the IRS for you or what? I don't understand how they get through faster than we can.

Yeah right, sounds like a scam. Nobody can magically get through the IRS phone tree. They probably just charge you and then you still wait forever.

They have an automated system that navigates the IRS phone tree and waits on hold so you don't have to. When they reach a live agent, you get a call to connect with them immediately. It's not that they have a "secret line" - they're just handling the waiting part for you. They certainly don't promise instant access - my wait was still about 45 minutes, but I was doing other things during that time instead of being stuck with my phone on speaker. And no, it's not a scam - the service doesn't get paid unless they actually connect you with an agent.

How much does H&R Block Premium run for a basic S-corp? And do you think it's something a reasonably smart person could figure out without an accounting background?

H&R Block Premium & Business runs about $110-130 for the federal return, and state filing is extra (around $40 per state). It's definitely manageable for someone without an accounting background if your business is straightforward - the software walks you through everything step by step. I think the first year is the steepest learning curve, especially for things like shareholder basis tracking and how to handle distributions vs. salary. If your S-corp is simple (few shareholders, straightforward income/expenses), you'll probably be fine. The software has decent help resources built in for the common questions.

Yes, a short-year return is definitely a thing and most tax software can handle it. You just enter the actual start and end dates of your business year. The premium versions of TurboTax and H&R Block both support this. It does make the return slightly more complex which is probably why your accountant is charging more.

This is really helpful advice! I'm in a similar boat - just formed an S-corp this year and feeling overwhelmed by all the tax implications. The shareholder basis tracking you mentioned sounds particularly important but also confusing. Do you happen to remember which software did the best job of explaining those calculations in plain English? I'm the sole shareholder so hopefully that simplifies things, but I want to make sure I don't mess up something critical that could cause problems down the road.

For sole shareholder S-corps, the basis tracking is definitely more straightforward than with multiple shareholders. From my experience, TaxAct Business actually did a pretty good job of walking through the basis calculations step-by-step with plain English explanations. It asks you questions like "Did you contribute any additional money or property to the business this year?" and "Did you take any distributions?" then calculates everything behind the scenes. The key thing to understand is that your basis starts with your initial investment in the company, increases with additional contributions and your share of profits, and decreases with distributions and losses. As long as you keep good records of money going in and out of the business, the software should handle the calculations correctly. Just make sure to save all your documentation - bank statements showing contributions/distributions, loan agreements if you lent money to the corp, etc.

For sole shareholder S-corps, the basis tracking is definitely more manageable! From what I recall, TaxAct Business did a decent job walking through the basis calculations with explanations, though the interface isn't as polished as TurboTax. H&R Block Premium & Business also has good guidance built in. The key things to track are your initial investment, any additional contributions during the year, distributions you took out, and your share of the business income/loss (which flows through to your personal return). As the sole shareholder, you don't have to worry about allocating these among multiple people. One tip - keep really good records of any money you put into or take out of the business throughout the year, because that directly affects your basis calculation. The software will prompt you for these amounts, but having organized records makes the process much smoother. Since it's your first year, the calculation should be relatively straightforward compared to future years when you'll have cumulative adjustments to track.

For sole shareholder S-corps, the basis tracking is definitely more manageable! I found that TurboTax Business actually does a decent job walking you through it with interview-style questions rather than just throwing forms at you. It explains that your basis starts with your initial investment plus any loans you personally guarantee, then gets adjusted by your share of profits/losses and distributions. The key thing to remember is that you can't take distributions tax-free if they exceed your basis, so the software needs to track this throughout the year. Most of the premium business software handles this automatically once you input the numbers correctly. Since you're just starting out, I'd also recommend keeping really good records of any money you put into the business (initial capital, loans, etc.) because this becomes your starting basis and you'll need it for years to come. The AI-powered solutions mentioned earlier in this thread might actually be good for this since they can help explain the concepts in plain English rather than tax jargon.

For sole shareholder situations, I found that TurboTax Business actually does a decent job of walking you through basis calculations step-by-step. It asks you questions in plain English like "Did you contribute any cash or property to the business this year?" and "Did you take any distributions?" Then it calculates your basis automatically. The key thing to understand is that your basis starts with what you put into the company (cash, property) plus your share of the company's income, minus any distributions you took out. As the sole shareholder, you don't have to worry about allocating percentages between multiple people, which definitely simplifies things. That said, @5f89e3d0144a is absolutely right about getting it right the first year being crucial. Basis tracking affects how distributions are taxed (ordinary income vs. capital gains), so mistakes can be costly. If your S-corp had significant activity in its first year or you're unsure about any major transactions, it might still be worth having a CPA review your work even if you prepare it yourself.

For sole shareholder S-corps, the basis tracking is definitely simpler than multi-shareholder situations. From my experience, the AI-powered tools like TaxR.ai that were mentioned earlier actually did a great job of explaining the basis calculations in plain English - they ask you questions like "did you loan money to your business?" and "what distributions did you take?" rather than throwing tax code at you. The traditional software like H&R Block and TurboTax Business handle it correctly but their explanations can be pretty dense. Since you're solo, your main basis items will be your initial investment, any additional capital contributions, your share of income/losses, and any distributions you took. The software should walk you through each of these systematically. Just make sure whatever you choose can generate Schedule K-1 properly since you'll need that for your personal return too!