Ask a Money Coach: Which tax software would you recommend?

Posted on: February 22, 2017

Tax Time

 

Around this time of year our Coaches are often asked which tax software they would recommend to individuals who would like to file their own taxes online.  Here is a round-up of responses on three of the most popular options: Turbo Tax, Studio Tax and Ufile.

It is also important to note that if you are filing online you must use a program that is recognized for use on Netfile by the Canada Revenue Agency (CRA). For a list of all the recognized programs visit the CRA website

Turbo Tax

Previously known as Quick Tax, Turbo Tax offers several different levels and is available for Mac or PC.

The Free Version: Exclusively online and recommended for people with extremely simple returns, (no children or significant assets).

The Standard Version: For folks with very straightforward finances, but is detailed enough to cover pensions, children and RRSPs.

The Premier Version: offers everything the standard version does but can also handle more complicated income from investments or rental properties.

The Home and Business Version: A great option for the home business owner, consultants and contractors.

All versions (except the Free version) are available as downloads or online. The downloadable versions offer the ability to handle multiple returns (8 for standard, 12 for Premier or Home and Business). The online versions are roughly half the price but only accommodate one return.

Features included in all the purchased versions: Turbo Tax EasyStep (uses guided questions to navigate you through the process), free product support by phone, email or chat.

Noel D'Souza Money Coach in Toronto ON“I’ve used Turbo Tax (standard) for several years. Pretty easy to use and it has good help from their forums/community if you have a tax or software question.”  

– Money Coach Noel D’Souza P.Eng, CFP® 

 

 

Christine White Money Coach in Toronto East ONI agree with Noel that the forums/community are good. There is also some online technical tax support, but I believe that is only available until the April 30th tax deadline.”  

– Money Coach Christine White P. Eng

 

 

Karen Richardson Money Coach in Kenora ON“I use Turbo Tax as well and really like it. The EasyStep feature walks you through your return and is especially beneficial for first time users.”  

– Money Coach Karen Richardson

 

 

StudioTax

The first thing to know about StudioTax is that it’s free for all personal users. Starting this year it is available for Mac as well as PC. It has only one, full featured version and will handle up to 20 returns (which is the limit set by the CRA). StudioTax is the brainchild of a group of software developers in Ottawa who offer the program for free but welcome donations.

Tom Feigs Money Coach in Calgary AB“I switched to StudioTax last year. I was attracted by the low cost – it’s free! StudioTax was approved by CRA for Netfile a few years back. It’s easy to navigate around as the forms look as if you are paper filing the CRA T1 General. It includes a quick entry wizard and helps you validate your return to be sure it’s optimized and error free. I am using StudioTax for 2013.”  

  – Money Coach Tom Feigs CFP, CET

 

Melanie Buffel Money Coach in Vancouver BC“I use StudioTax too. It’s free but you can donate to it if you choose to. I start with the Quick Entry Wizard and then review each form to be sure I didn’t miss any credits etc. They have a PC and MAC version and now have some You Tube tutorials for those wanting a bit more support. The only thing I remember Turbo Tax having that this does not, is an RRSP optimizer with a visual way to see how your refund changes when you deposit more into an RRSP.”

– Money Coach Melanie Buffel BA Psych, MBA Candidate

 

Ufile

Ufile online is available for Mac and PC but the downloadable version is PC only. The downloadable version costs less than Turbo Tax but only allows for 4 returns, and depending on your income and circumstances it can be free. It has a questionnaire that once completed fills in the necessary spots in the tax return and easily carries forward the previous years information. There is only one version for personal use, which the company says will handle any tax return no matter how complex.

Leslie Gardner Money Coach in Kamloops BC“I use Ufile, it’s less expensive, but I don’t think it’s for beginners, you need to know something about taxes in order not to miss credits.”

– Money Coach Leslie Gardner

 

We hope this article has been helpful and provided some practical advice on how you can improve your financial well-being. If you need additional support, please contact one of our Money Coaches today.



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40 Responses to Ask a Money Coach: Which tax software would you recommend?

  1. I used Ufile for at least the last 10 years, but the last 2 years the format has changed and it is a lot less user friendly to the point that I am thinking of changing tax software. Has Ufile been bought by another company..? There is a big difference.

  2. Hi Bob;
    In answer to your question, yes Ufile was first developed by Dr Tax Software Inc in 2000 and that company was bought out by Thompson Reuters in 2012. The changes to their software came in 2015 and I agree the changes were not as user friendly. I have myself continued to use Ufile, there was a “learning curve” with this new software update for sure. With any tax software you will want to go over each of the questions carefully and if unsure then Ufile does has a help desk and I recommend going over the tutorials as well. With all tax preparing software it’s a good idea to be somewhat familiar with how the Canadian tax system works so if your tax software is stating a large refund or amount owing and you have no good reason as to why, then you may need to go back and review your inputs to ensure you haven’t missed something. I used to use Quicktax years ago, but found the cost was increasing rapidly each year, that’s when I switched to Ufile. I hope that helps.

  3. There appears to be a significant difference between Turbotax ( 2016 ) and Ufile (2016) …..specifically when pension splitting ( RRIF) with my spouse…. to receive the optimal tax refund , turbotax recommends $595 …while Ufile allows my full amount (50% = $4787 )….why the difference ??….. all data input was the same for both programs…. any idea “why” the difference ?…this results in an overall difference of $175 (refund total for the 2 of us ) …this is significant .
    thank you

    • Rick in BC says:

      Hi Ian, The answer probably lies in the information you didn’t share. Which package got you the better refund. IE: If Turbo tax recommended only splitting $595 of your pension with your spouse and it gave you the best return +$175 then this would appear to be the optimal split. If Ufile’s recommended max 50% split got you the +$175 then this is the most optimal. In the end the algorithms are designed with rules to try and reduce your taxes. This is done in one of two ways, reducing your income or increasing your tax credits. It would be helpful to know which package got you the best refund as it will help other understand who’s software worked best for you. in your case both answers appear legal so I would choose the higher refund unless your primary concern is having a Lower Taxable income to qualify for some grants or tax credits (IE: BC MSP Reductions for low income). Enjoy the refund and buy something that makes you happy.

  4. Hi Ian;
    Revenue Canada allows you to split up to 1/2 of eligible pension income with your spouse. Each software program has an optimizer, Ufile call theirs MaxBack, Turbo Tax is I believe called “optimizer”. These tools are calculating what works best in your situation. With similar inputs though, why the difference? That’s a great question, I would suggest you contact UFile support chat line at: http://www.ufile.ca/help/ask-ufile to see if they may be able to answer your question. They may want you to submit your file to them for review, please let us know what the answer was so that we may inform others.

  5. After just having gone a round with CRA about unreported income, I am sorely disappointed with StudioTax (ST).
    The problem arose because my wife and I shared our investment income and I used the wizard to split the T5 chits for the most favorable tax refund. ST did indeed juggle the numbers, but it did not attribute the income to either of us. This meant that CRA eventually realized this and came after us. We were able to resolve the issue by paying a penalty on top of the extra tax and being told by CRA that no matter which tax package we use, we would still have to _review all figure manually_, which pretty well defeats the purpose of the software in any case.
    In going back to Studiiotax to see what is going on, I found a button on the T5 slips page “Copy the current T slip amount to the spouse return”
    My beef and question: if ST is smart enough to juggle the numbers, once I accepts the split, ST at the very least should ask me to transfer the slips as needed, or better yet, simply advise me the it did so for me and possibly ask me to confirm.
    The penalty cost us far more than we would have paid for any non-free tax package.
    Between the hassle and the penalty, ST is no longer an option for us :-(

    • I wonder if ST has a problem with splitting pension income. I’ve never used it and am considering it but if there’s a problem like yours then it’s a no go for sure!

      • ST does indeed split pensions (T1032 form) and medical expenses…
        I like it.
        I double check with genutax, also free but a bit more cumbersome to fill out.

  6. I have been using Ufile for several years without problems, but this year I find Ufile 2006 cannot run on my
    Dell laptop with window 10 (same computer as last year). I am wondering if someone else has similar
    problem and any remedy.

    Charles

  7. Donald Smith says:

    My wife and I moved from Canada to NZ on 1 Oct 16 (permanently) and are considered non-residents for Tax purposes. Last lived in B.C. Sold all stocks and residence. Both retired. We have pensions, RRIF and interest income only. Will have to complete Canada 2016 Tax return and paper file as they will not accept net file from out of country. Have used Turbo Tax and Quick Tax prior to that for years. Question is can Turbo Tax handle the taxation problems inherent with our no longer being Canadian Residents?

  8. Hi,
    I bought Turbotax Premier for about $70 and it can file 12 returns. I wonder if I can share it with my friend since I do’nt need 12 returns and we two family can slit the cost?

  9. I’m new to this.

    I know computers very well.

    I’ve tried using Ufile 15 years ago but I’ve never filed it since my dads accountant was doing it and it come out the same.

    Now my question is which is best for me only.

    I’m in Montreal, Quebec (Canada)

    I own a condo, I’m single, no kids, have RSSP’s, GIC’s, I work and have T4, T5 and annual bus passes.

    I’ve heard about Ufile, H&R Block, Turbo Tax, Simple Tax and Studio Tax.

    I only need is one return.

    Which program is more user friendly to use?

    I’ve head about Studio Tax and Simple Tax online it’s all free and have e-mail support.

    Studio Tax saves it on my hard drive and online they say it stays on someones server.

    Then you have online Ufile, H&R Block, Turbo Tax which are not free, but are they any better then Studio Tax and Simple Tax for my simple return?

    I think I should try Studio Tax for my very first time?

    The auto fill, how does that work, do I need to register with the CRA or it’s done automatically when selecting on Studio Tax?

    Studio Tax support is done by e-mail only.

    Do I really need phone support too or remote support?

    Maybe I try to practice by doing my last years taxes to see if I get the same too with Studio Tax?

  10. Hi Tony,
    Your situation isn’t overly complex but if you look back on your previous tax forms be sure you understand how all of the numbers were arrived at so you have confidence that you can prepare the forms yourself. You also want to fully understand what credits and deductions may apply to you now and as they change in the future. If in doubt a tax prep professional can provide peace of mind.
    If you suspect you may be missing credits or deductions or opportunities to lower your taxes by doing them yourself it may be worth it to have a professional prepare it for you. Peace of mind in this area is well worth it.

    If you want to test drive a tax software program be sure you are using the version that matches the year of tax information you are inputting. Updates are done to the software annually to incorporate any changes the government may have made to how we calculate taxes and credits. You need to compare apples to apples so don’t use a new version of the software and expect to get the same answers as your older tax return.

    Turbo Tax looks a bit prettier and may come with a few features that Studio Tax does not but for simple returns you should get equally valid results if your data is identical.

    I personally prefer keeping my information saved on a separate hard drive back up and not in the cloud so I have a greater sense of security of my personal information. For how to’s with specific software it’s best to consult their help and support functions, Studio Tax offers a series of how to you tube videos.

    You must be registered for “My Account” in order to use the autofill function on tax software. More information here cra.gc.ca/auto-fill .

  11. I have only ever used Ufile, since the one time I tried to use Studio Tax in 2011 , I was clueless where to start … so Turbotax is formerly Quick Tax.
    Which works best for my situation.
    Pension and work income, RRSP and student loans repayment & transportation to June 30 for public transport

    Oshawa

  12. Hi Ida;

    It sounds like you do not have a simple tax situation, the tax software still requires you to know something about the Canadian tax system and the available tax credits when answering the tax software questions. A good resource is “taxtips.ca”. Either Ufile or Turbotax will have what you need to file your taxes. By the sounds of it you are already familiar with Ufile which is helpful as it will carry forward the information from the previous year quite easily. As a money coach we help our clients organize their finances to help streamline their tax season. Contact us for a complimentary consultation.

  13. I have rental income and investment income (capital gain/losses) to report.
    Can U-FILE do the same calculations as the TURBO TAX PREMIER version?
    Then why does Turbo cost 75$ while Ufile cost 22$?
    Is it because Turbo you get 12 returns compared to only 4 for Ufile?
    I live in Quebec, so I have also have Releve(s) with my T3/5 slips.

  14. Hi Mario;

    Ufile for windows (4 returns) does support the completion of T776 statement of real estate rentals and Schedule 4 for investments. This information can be found on their website under “see all features”. The difference may be the number of returns but also Turbo tax has an option for “assist and review” which may be what is creating the difference. Both can file Quebec tax forms.

  15. For the first time I will have both a T4 from a part time employer with a variable income, and separate private practice income. My husband has a regular day job and occasional performance income. Which online program can accommodate us best and inform us of all the deductions to which we are eligible?

    • Hi Lynn,

      When you say you have “private practice income”, do you mean from a corporation that you own, or are you receiving the income directly as a sole proprietor (i.e. self-employed)? If the latter, then I expect that the majority of consumer tax software packages would be appropriate for you. I am familiar with TurboTax, and I typically use the Standard Version for my return which handles both income from self-employment as well as T4 reported income.

      However, if by “private practice income” you are referring to income earned through a corporation that you own, and you want to also be able to file a Corporate tax return (T2), you would likely need something like TurboTax Business Incorporated desktop edition. I don’t believe that the online version does T2 corporate returns.

      Tax software is pretty helpful at suggesting tax deductions that *may* apply to you, but often suggest you speak with a professional advisor (financial planner, accountant, etc) to determine if any particular deduction *actually* applies in your situation.

      Even more important, you should speak with your financial professional about how to better arrange your finances to minimize your taxes going forward. That’s a key different between “tax preparation” and “tax planning”. Take a peek at a post I wrote on this subject:

      https://moneycoachescanada.ca/blog/tax-preparation-vs-tax-planning-which-do-you-do/

      • Kathy Russell says:

        Noel how do you use Turbo tax standard to include self employment income? I have used the standard version for years for my family but have never used it for myself because I am self employed. The standard version will not accept business income. How are you doing that? Where are you entering your business income?

        • Hi Kathy,

          Self-employment income (either business income or professional income) is entered on Form T2125 in TurboTax Standard. I’ve used the Standard Edition to report self-employment income for the past 5 years, so unless the makers of TurboTax have changed something in the 2017 version, it should work fine.

          While TurboTax does have a special “Self-Employed” Edition, I believe that version includes more guidance and help on how to report self-employment income and expenses, as it can be confusing for those not familiar with completing Form 2125. That additional guidance may be worth the incremental cost, however if you are comfortable completing this form with little additional help, you could do it using the Standard Edition of TurboTax in recent years, and I expect you’ll be able to do so for the 2017 tax year as well.

          To be safe, contact TurboTax sales before making a purchase to confirm the Edition you are considering is suitable for you.

  16. Larry Johnson says:

    Simpletax.ca is by far the easiest software to use. It is finally a frustration free approach to completing your taxes. I don’t know why these “Experts” haven’t mentioned it – especially when it’s free (which will again save you money).

  17. Hi Larry,

    Thank you for your post. SimpleTax is a great online tax program. I have used it for students and employed family members with a relatively simple tax profile, however, it does support more complex tax profiles including self employment income and deceased taxpayer final returns. To find out if SimpleTax will work for your needs go to http://www.simpletax.ca and search for the topic.

    SimpleTax is, as its name promises, very simple to use allowing you to type in the name of each slip you have, the slip will then pop up and allow you to enter the information. Once you have completed your return, SimpleTax will suggest possible deductions to consider and corrections that need to be made and it will optimize returns for couples. SimpleTax also carries forward prior years tax information and you can autofill your return if you have a CRA MyAccount.

    Finally, as you point out, SimpleTax is free. The creators do ask if you want to make a donation once you have filed your return. The donation is not mandatory, however, I always make one as I want to see SimpleTax continue.

  18. I need some recommendations and suggestions. I have used Ufile for the past few years. I am no tax expert but have enough experience to file my simple tax returns. I’m a bit disappointed with the software because it never seems to optimize and fully analyze my situation. Long story short, my personal situation has changed a lot during the past year. My daughter, first child, was born in the spring of 2017. My wife has a T4 and a T4A, I have a couple of T4 slips, charitable donations, RRSPs, …etc. I don’t feel comfortable with Ufile, what other software would you suggest? Is TurboTax more user friendly? What are your thoughts

    • Hi Thomas,

      I typically use TurboTax and find it quite user friendly. However, from what you mentioned about your tax situation, I believe any modern tax software would be able to handle your and your wife’s T-slips, charitable donations and RRSP contribution receipts. For relatively simple tax returns, often the choice of tax software comes down to a matter of preference, number of returns included, and price.

      With respect to optimizing and fully analyzing your situation, the reality is that it is unlikely that any tax software will do that rigorously on a go-forward basis. Tax return preparation software is designed to help you complete your previous year’s return quickly and can remind you to check for some of the most common tax deductions and credits that *may* apply to your situation. However, it operates based on what has already happened and typically doesn’t spend much time asking you what might have changed in your circumstances that you should adjust for in future. For that level of advice and insight, you’ll need to work with a pro-active tax accountant, financial planner, or Money Coach, or further educate yourself on tax planning.

      I previously referenced an article I wrote on the difference between Tax Preparation and Tax Planning which you might find helpful in illustrating this important distinction between what tax prep software provides and the kind of tax planning help you are seeking.

      https://moneycoachescanada.ca/blog/tax-preparation-vs-tax-planning-which-do-you-do/

  19. Daniel Anggara says:

    Hi there, as a family we have moved from BC to AB. We have been using Ufile to file our personal income tax returns for years. From my understanding, with corporate income tax filings, Alberta requires a separate return to be filed (separate from the filing to CRA). For personal income tax, if we use Ufile to file the federal tax, do we need to file separate returns to Alberta provincial government?
    Thank you.

  20. Hi Daniel;
    Ufile requires you to complete your residency as of Dec 31,2017 and files based on which province you resided in at that time. For more information on residency go to the “help” section in the Ufile and search “Which Forms book should you use” it explains the residency rules. If you qualify as a BC resident then you most likely being filing a BC tax return. Don’t forget to claim moving expenses if you qualify.

  21. Hi,

    Unfortunately I am a year behind on my taxes. Will any of these programs allow me to complete both my 2016, and 2017 returns?

  22. Hi Ben;

    You can file a previous years and current years return using CRA’s Netfile s which may be the most cost efficient method for filing two years. Ufile and Turbotax you must purchase each years software in order to file back taxes.
    As Money Coaches we can help you with finding the money in your cashflow, should you owe taxes and strategize on ways to help reduce taxes in the future.

  23. Hi Ben,
    If you decide to use StudioTax you can download the 2016 version of the software to prepare taxes for that year first and then download the newest version to complete your 2017 taxes.

  24. I am using Ufile. Am I allowed to netfile for my friends (<12) ? Can I obtain authorization for rep-a client to auto-fill their returns?

  25. Leslie Gardner says:

    Hi PKS;

    CRA does not allow you to file others income taxes unless you have obtained their consent. If you wish to represent a client (friend) then the persons you are representing must complete and sign a T1013 authorizing you to have access to their personal tax information. Upon receipt of the completed form by CRA then you can have access. CRA performs several identification validations, including validating social insurance numbers and dates of birth with their database. If it finds an identification error or a discrepancy, the system will automatically stop processing the return. Bear in mind that you may be taking on the risk for any filings that may result in either an incorrect refund or payment due.

  26. I have a got two T4’s and some medical to write off. Should I just use simpletax.ca?
    Sound like its my best option or H&R Block?
    Or can I try out both and just file with one?

    Thank you.

    • MoneyCoach says:

      Hi Ocean,
      Yes, any of the programs that we’ve mentioned would work with your situation, and yes you can indeed try out both and then just file with one.

  27. Hi
    I have used ufile the last couple years but this year I was thinking of moving to turbo. I am married with 3 kids and this year have some digital currency capital gains. It looks like ufile wants me to submit every single trade which will take hours. Does turbo have an import function as I have used bitcointax to prepare my capital gains.
    Thanks
    Mike

    • Hi Mike,

      If you have a series of trades on a single security, you should be ok to summarize all the trades into a single entry that *accurately* reflects your net capital gain or loss on that security. If CRA asks for more information about the trade(s), you can follow up with the detailed trade-by-trade information provided by the tax service you used.

      For questions regarding whether a tax program supports importing data from a particular source or service, it’s best to contact the makers of the software to confirm before making a purchase.

  28. Arthur Yip says:

    I would echo the recommendation for simpletax.ca
    Excellent interface and commitment to simplicity.
    And its pay what you want philosophy.

  29. Dawn Shepherd says:

    I always filed manually up until 5 years ago. I took the tax course with H&R Block many years ago and worked for them for a few years. The first program I ever used was Simple Tax. It is GREAT and SIMPLE and FREE. I have had questions a couple of times and appreciated that they provide a way to contact them and ALWAYS get back to you with an answer. They do ask for a donation at the end and I always send something as it is well worth it. I’m surprised not to see them mentioned here more.

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