Filing online? A guide to the latest tax software
Four-digit security codes no longer required to file online
Posted: Feb 21, 2013 8:02 PM ET
Last Updated: Apr 29, 2013 2:32 PM ET
Still procrastinating about doing your taxes? If you owe money, you're running short on time - you'll need to file by midnight April 30 to avoid penalties. But here's some help picking a way to file quickly online.
Tax season can be tough on all of us, no less so for trees. Last year, more than 9.7 million Canadians filed their taxes the old-fashioned way — mailing in ink-and-paper forms — which, according to some very rough math, required introducing some 3,200 trees to the business end of a chainsaw.
But that's an improvement, thanks to the rising popularity of filing taxes electronically, on the 3,300 or so that were turned into T1s for the tax year 2010
Most tax returns are now delivered electronically to the Canada Revenue Agency (CRA), and it's not hard to see why. Electronic options like EFile and Netfile are fast, secure, more accurate, and refunds can take as little as eight business days with direct deposit.
For a mailed return, you can wait as long as six weeks to get a refund.
The CRA itself is recognizing that fewer people are opting for paper returns. It announced this January that it will no longer mail out paper tax forms unless individuals request them and has cancelled its Telefile service, which allowed taxpayers to file simple tax returns by telephone.
With tax deadlines approaching, a variety of software programs are once again available so Canadians can file electronically. Most cost money, but some are free for those with modest incomes. A few are offered free to everybody.
For the do-it-yourself types, this means using the CRA's Netfile system, a web-based service that allows taxpayers to be their own accountants and file their returns over the internet. (EFile is the internet-based filing system used by professionals who prepare tax returns for a living.)
The CRA received more than five million tax returns through the Netfile system in 2012, an increase of five per cent from the previous year and far more than the 530 who filed this way when the program debuted in 1999.
How to Netfile
Using Netfile used to require a four-digit access code, but this year, the CRA has dropped the codes and only requires you to provide your social insurance number and date of birth.
Armed with those, all you need is a "certified" tax program. The CRA has a list of certified programs on its website, and it will be updated through March as more programs satisfy the certification requirements.
The Netfile service is open from Feb. 11 to Nov. 30 for filing 2012 returns.
Taxpayers have two main options: using software that is loaded onto a computer or mobile device or using interactive web-based programs. Once these programs complete your tax return, you can either file it electronically or print it out and mail by post.
Some programs can be bought in a store and come on a disc that installs the software on your hard drive. Others allow users to download the software directly from the company. Some programs offer both versions.
Often, these programs allow you to prepare multiple returns but tend to be more expensive than the web-based tax programs where users interactively prepare their returns online without downloading the software.
Here's a quick look at the particular bells and whistles of some of the most popular CRA-certified tax-preparation programs for Netfiling.
TurboTax, formerly known as QuickTax, is Intuit's popular tax-preparation software. The Standard edition costs $39.99 for eight returns and is meant for relatively simple returns, suitable for those with RRSPs, pensions and children.
The $69.99 Premier version adds features for those with rental or investment income to report. The $99.99 Home and Business edition is mainly for those with business taxes to file.
All of the installable/downloadable versions are for PCs only. If you have a Mac, you'll need an online version (see below).
Intuit also offers a stripped-down iPhone app, SnapTax, for $9.99, which can handle very simple returns for those with no children and who are under age 65.
UFile for Windows
Like TurboTax, UFile uses the interview method to lead users through the tax-preparation process. UFile is installed on your computer (either via download or disc) for $19.99 and allows users to prepare as many as eight returns. It can handle self-employment income, including income from rental properties, and additional returns can be purchased through the company's website.
The Premium edition goes for $29.99, covers up to 16 returns, and is aimed at those with small or home-based businesses.
H&R Block at Home
The Deluxe version of H&R Block at Home allows you to prepare up to 16 tax returns for $29.99.
Like its main competitors, it employs the question-and-answer format and allows you to import your tax data from other software products.
The software can prepare a number of different personal returns, including for those with multiple small businesses, rental properties, commission or foreign income and childcare expenses.
TaxTron uses a step-by-step approach, and its software is available through its website.
Windows users can purchase an individual licence for $12.99 (the Mac version is $19.99) and file one return for a taxpayer with a net income over $31,000 and 19 returns for income under $30,000.
A family licence, which costs $24.99 ($39.99 for Mac), will allow you to prepare and file five returns for earners with a net income over $31,000 and 15 returns for earners with income under $31,000.
This downloadable program charges $5.99 for one return, $7.99 for two returns, $9.99 for 10 returns or $17.99 for 20 returns. It will run on PCs with operating systems going all the way back to Windows 95 but is not available for Macs. It also cannot be used to file Quebec provincial returns.
This downloadable software costs $6.99 for one return and $13.99 for a licence that allows users to prepare up to 10 returns. It's free for families with a total income below $25,000. There is a $5 fee if users want to receive the CD-ROM version of the software. It can't be used to file Quebec provincial returns. For Windows only.
TaxFreeway is a downloadable program that costs $9.95 for up to 20 returns (the version for Macs is $14.95). It also offers a "3-in-1" package for $19.95 that allows users to file up to 20 returns using a PC, Mac or iPad. It says it's the only Canadian tax software that allows users to work in interview and form modes simultaneously.
StudioTax is the work of BHOK IT Consulting, a group of software professionals in the Ottawa area. It's free to download and use regardless of income but asks for donations. One caveat: it's Windows only. The company's website says that "hundreds of thousands" of people use its free service.
EasyCTax, available as both a downloadable program and a web application, costs $9.95 for the first return and $5 for each additional family member. Alternatively, you can pay $24.95 to file as many as 20 returns. The software is available for free if family income is less than $25,000.
The online version of TurboTax Standard is $17.99 for a single return, which will suffice for typical taxpayers with the usual claims like RRSP deductions, charitable donations and medical expenses.
But the company offers a free version for taxpayers with simple taxes to file. And they mean simple: no RRSPs, no investment income, no charitable donations and no pension or income from tips. There's also a free version for students with gross incomes below $20,000.
A Premier edition for those with investment or rental property income is $32.99 for a single return. A Home and Business edition is also available online for $44.99 per return.
Ufile's online solution costs $15.95 for the first family member or $24.95 to include a spouse. You can file tax returns for dependent family members for free. All students and families with a total income of less than $20,000 can also file for free.
H&R Block at Home
H&R Block has an online version for those who want to do their own return. H&R Block charges $15.95 for one return and $10 for a second family member. H&R Block also offers its web application at no cost for families whose total income is $20,000 or less.
EachTax.com charges $5.99 for the first return and $3.99 for each additional return. Family members of a paying EachTax.com customer who earn less than $25,000 a year can file for free. New customers can file for free, regardless of income. The software cannot calculate Quebec provincial returns.
TaxChopper (formerly CuteTax Online)
TaxChopper costs $9.98 for one return, $15.98 for two returns, $19.98 for three to five returns and $25.98 for six to 15 returns. It's free for single people with incomes below $30,000, couples with incomes below $35,000 and students who spent six months of the tax year enrolled in full-time studies.
This web application, available from MacroNT Inc., costs $12.99 for the first return and $5.99 for each additional family member. It's free for those with total family incomes below $20,000.
This online program charges $8.99 for the first return, $13.99 for two returns or $18.99 for up to 20 returns. It is free for singles with total income below $20,000 and couples with total income below $25,000.
This web application is available for free, though the developers ask for donations to help cover the costs of testing and licensing. It cannot be used to file Quebec provincial tax forms.
Finally, time for a quick mention of TaxMan — the work of an opinionated Victoria man who calls himself "the poor man's accountant."
His offering is a "moron-simple" 28,000-line tax software program that uses CRA-approved forms. You can't Netfile this baby — you'll have to print it up and mail it in — but it is free, regardless of the number of returns or income.
TaxMan does, however, accept donations, for those who feel so inclined.
Of course, everyone who uses tax software can always file the old-fashioned way — on paper, via Canada Post. You just do your data entry through the program and then print the results and send them in.
You can also download all the forms you need from the Canada Revenue Agency's website or pick up a tax package at a CRA service kiosk or at the post office and fill everything out (shudder) by hand.
Top News Headlines
- Harper 'not consulted' about Duffy Senate expense repayment
- Prime Minister Stephen Harper says that not only did he not know about his chief of staff's "gift" to repay Senator Mike Duffy's expenses before the story broke in the media, he was not consulted and did not sign off on Nigel Wright's decision to write a personal cheque. more »
- 2 infants confirmed among dead of Oklahoma tornado
- Rescue workers raced to complete the search for survivors and the dead in the Oklahoma City suburb where a mammoth tornado destroyed countless homes, cleared lots down to bare red earth and claimed 24 lives, including those of 10 children. more »
- 'You will see him again in heaven,' Sharlene Bosma tells daughter
- Sharlene Bosma told more than 1,000 people at the public memorial service for her slain husband, Tim Bosma, about the love they shared. more »
- Mayor Ford stays silent while his brother defends him
- Toronto Mayor Rob Ford continues to stonewall the media over allegations that he was recorded on video smoking what appears to be crack cocaine, but his brother Coun. Doug Ford told reporters Wednesday that the story is untrue. more »
Latest Business Headlines
- Real estate site Zoocasa adds MLS listings, agent recommendations
- Zoocasa, an upstart real estate company owned by Rogers, has launched a revamped website that aims to compete with Realtor.ca by presenting MLS listings in a more user-friendly format and connecting clients with realtors from major agencies. more »
- Cooling housing market will cost us 150,000 jobs, mortgage group warns
- The government's effots to cool the housing market will have a negative impact on the economy and the range of industries that depend on house sales — everything from mortgage financing to furniture and appliance sales — the group that represents the mortgage industry says. more »
- German software firm SAP plans to hire hundreds with autism
- German software firm SAP says it wants to hire hundreds of people with autism to work as programmers and testers for its products. more »
- Bernanke cautious about removing stimulus
- U.S. Federal Reserve chairman Ben Bernanke told lawmakers Wednesday that the country's job market and economy are too weak to consider ending the central bank's extraordinary stimulus programs. more »
- High-profile CEOs got $162K in planes, homes and other perks
- In the exclusive world of CEO perks, company-paid bodyguards, chauffeurs, private jets and second homes are the norm. The median value of perks received by CEOs of big public companies was nearly $162,000 in 2012, an increase of more than nine per cent over the previous year, according to executive pay research firm Equilar. more »
The data on this site is informational only and may be delayed; it is not intended as trading or investment advice and you should not rely on it as such.