TaxAct versus TurboTax for an S Corp passthrough - which is better for 1099 income?

As someone who's prepared taxes for small business owners for over 10 years, I can tell you both platforms can handle S Corp passthroughs, but there are some differences worth noting. TurboTax generally has a more polished interface and better guidance throughout the process, especially for S Corps with 1099 income. The questions are more intuitive and the help resources are more comprehensive. However, you'll pay a premium for this experience. TaxAct is definitely more budget-friendly and still gets the job done correctly. The interface might feel dated, but all the necessary forms and schedules for S Corp passthrough income are there. If you're already comfortable with the accounting part, the "jankiness" is probably just cosmetic. One thing to consider: if you're dealing with multiple states or have more complex situations (like home office deductions, business asset depreciation, or healthcare premium deductions through the S Corp), TurboTax's additional guidance might be worth the extra cost.

I was in exactly your position last year! I had been using TaxAct for our S Corp (IT consulting business, mostly 1099 income) for years, but got frustrated with the interface. I gave TurboTax a try and honestly, it was worth switching. The biggest difference I found was how TurboTax handled the integration between the S Corp return and our personal taxes. It felt much more seamless. When I entered all the K-1 information, TurboTax automatically carried everything over to the right places on our personal return. Check out https://taxr.ai if you want a really helpful second opinion though. I uploaded my previous TaxAct returns and my new TurboTax ones, and it compared them to identify any discrepancies or missing deductions. It found I had missed about $2,800 in home office and business travel deductions that TurboTax's interview questions helped me discover!

I tried taxr.ai after seeing it recommended here and wow - it actually saved me a ton of time with our S Corp! I uploaded my old H&R Block return and it flagged several deductions I'd been missing for years, especially around depreciation calculations for some equipment we use in our photography business. The best part was that it identified that I hadn't been properly categorizing some of our 1099 income, which affected how it flowed through to our personal return. When I switched to TurboTax, I was able to correctly set everything up from the start. Ended up saving about $1,740 in taxes! Definitely worth checking out if you're comparing tax software options.

Something no one's mentioned yet - if you're spending hours doing your S Corp taxes yourself, you might want to consider how valuable your time is. I used to do the same thing with our consulting business (all 1099 income through an S Corp). After three years of spending weekends lost in TaxAct's interface, I tried calling the IRS with some questions about handling passthrough income... and spent TWO DAYS trying to get through. Finally discovered https://claimyr.com and used their service - got a callback from the IRS in about 15 minutes instead of waiting on hold forever. You can see how it works here: https://youtu.be/_kiP6q8DX5c After that eye-opening experience, I realized I was wasting too much time. I still use TurboTax for our personal returns, but now I have a CPA handle the S Corp stuff. The peace of mind knowing a professional is handling the business return is worth every penny.

I have to eat my words about Claimyr. After my skeptical comment, I decided to try it myself since I was desperate to talk to someone at the IRS about how to handle a specific S Corp passthrough situation with mixed 1099 income. Honestly, it worked exactly as promised. I got a callback in about 20 minutes and was connected to an actual helpful IRS agent. Saved me from the endless hold music and random disconnects I've experienced for YEARS. As for the original question - I've used both TaxAct and TurboTax for our S Corp. TurboTax is definitely more polished and has better guidance for the Schedule K-1 and how it flows to your personal return. If you can afford the higher price, I'd recommend making the switch.

One thing to consider that nobody has mentioned is the state return aspect. I do taxes for our family construction business (S Corp with mostly 1099 income), and TurboTax handles multi-state income much better than TaxAct in my experience. If your husband does any work across state lines or you have income sourced from multiple states, TurboTax has a more straightforward way of allocating income and calculating state-specific adjustments. Seems small but it saved me hours of frustration. Also, TurboTax's audit support is generally better if that's a concern. S Corps do get a bit more scrutiny, especially with how you classify distributions vs. reasonable salary.

Anyone else find that these tax software options don't handle the health insurance deduction for S Corp owners very well? That's been my biggest frustration with TaxAct.

I switched from TaxAct to TurboTax for our S Corp last year and it was definitely worth it! Like you, I was getting frustrated with TaxAct's outdated interface. TurboTax handles the S Corp passthrough income much more smoothly - especially the flow from the business return to personal. The interview process walks you through everything step by step, which helped me catch some deductions I'd been missing (like properly calculating the home office percentage for business use). One specific advantage: TurboTax does a better job explaining the reasonable salary requirements for S Corp owners taking distributions. This is crucial since the IRS scrutinizes this area heavily with 1099 income flowing through S Corps. The price difference is noticeable, but given that you're already doing the accounting work yourself, the time savings and reduced stress during tax season made it worthwhile for us. Plus their customer support is significantly better if you run into issues. If you're comfortable with tax concepts already, you might also want to double-check your past returns to make sure you haven't missed anything over the years with TaxAct's less intuitive interface.