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Using tax return software in canada

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If you live in Canada, then you are either paying tax or will eventually pay tax. There is nothing wrong with feeling like it is too difficult for you to handle – tax is an ancient system that has gone through a lot of changes, and it can be tricky to keep track of every single thing involved in the process. Fortunately, you don’t really have to these days.

Tax return software skips the need for a middleman by giving you a digital interface for filing your taxes, getting rid of the stress it involves, and making it much easier to know that you are doing everything correctly. Some of them even allow you to directly file your tax info, an incredibly useful feature that many people prefer over having to do it themselves. The biggest bonus is that you can get free tax software. But how do you even use them? 

Filing taxes online

There are two online tax filing systems to use in Canada: NETFILE and EFILE. Both are operated by the Canada Revenue Agency (CRA) and are used to file taxes online without the need for any paper forms or in-person visits. They are similar in concept but work differently as a whole.

NETFILE needs tax preparation software certified by the CRA, such as tools like TurboTax, to work properly. This sends you tax return details through NETFILE in a secure format, ensuring that only the CRA can get hold of it.

ELIFE is similar – an electronic submission service used to transmit your income and return information – but is more often used by a tax preparation firm or an accountant rather than the person trying to file taxes online. 

The CRA also offers a recently-created “File My Return” service for people who can’t necessarily afford any other kind of support – you will be given a letter if you qualify, including instructions for how to get set up using File My Return.

What is the best tax software?

While tax software all serves the same purpose – to help you file taxes online – not all of them are identical. In fact, many of them are designed with different limits or have certain user tiers, especially if you start looking into the differences between free and paid options.

TurboTax Free

TurboTax is the most popular piece of tax return software in all of Canada, offering multiple versions: free, standard, premium, and a special self-employed option. The free version is the one that will be covered here since it is easily the most recommended. It is also available in Quebec.

TurboTax can be used on any device, smartphones included, and provides you with the following tools:

  1. 20 free returns per year.
  2. Instant access to your notice of assessment if you used NETFILE.
  3. ReFILE option for making return adjustments.
  4. Maximum refund guarantee of $9.99.
  5. Auto-fill My Return compatibility, which can import your details straight from CRA.
  6. Full TLS encryption.

You will miss out on having a phone support line with the free version, but the standard service costs only $19.99.

uFile Free

uFile comes free of charge to students, no matter their income, through the Canadian Federation of Students. Users can also get it for free via filing a tax return under specific conditions, have just moved to Canada and are filing your first federal tax return, or live with a total family income of under $20,000 per year.

Otherwise, uFile starts at $19.95. It is available in Quebec.

uFile can be accessed from a Windows or Mac computer, as well as most tablets and smartphones. There is also an installable Windows app version that doesn’t need to be opened in a browser. It provides you with:

  1. The ReFILE system for adjusting your sent returns.
  2. Excellent security and safety features.
  3. A higher level of accuracy in your tax results and filings.
  4. NETFILE certification.

SimpleTax

SimpleTax is a “pay what you want” option, making it one of the best tax software options for people without much spare income. It offers only a single form of SimpleTax, although users can donate in tiers of between $0 and $49 after filing a return if they choose to. It offers:

  1. Up to 20 returns per account.
  2. Full private encryption.
  3. Auto-fill My Return, certified by the CRA.
  4. Step-by-step support and guidance.
  5. A high level of accuracy.
  6. A maximum refund system.

StudioTax

StudioTax is another 100% free program for both Windows and Mac devices, although not for smartphones or tablets. It is available in Quebec. It uses the NETFILE tax filing system and gives you:

  1. No internet connection when it is not necessary, for added security.
  2. NETFILE-certified.
  3. Up to 20 returns per year.
  4. No income restriction details.

CloudTax

CloudTax is a non-business tax return software certified by the CRA. There are two tiers: CloudTax Free and ClouldTax Pro. CloudTax Free provides you with:

  1. Optional audit protection ($2.99 per month).
  2. Online tax return storage.
  3. Great encryption.
  4. Mobile and web access.
  5. Unlimited chat.
  6. Auto-fill My Return features.

AdvTax

AdvTax is available on computers, smartphones, and tablets. It supports multiple languages: namely English, French, and Chinese. The main tier, which is free, gives you: 

  1. NETFILE certified features.
  2. An easy to use interface.
  3. Quick five-minute tax return processes.

GenuTax

GenuTax is another NETFILE-certified piece of tax return software that comes as an installer on Windows computers. It is completely free, but users can donate. It gives you:

  1. 20 tax returns per year.
  2. Limited customer service features.

Which is best?

The best tax software depends on your needs and whether or not you are prepared to pay for tax filing features. Either way, Canada has plenty of tax filing software options to choose from, some of which are cheaper or more effective than others. Whatever you choose, it shouldn’t take you very long to file taxes since the point of this tax filing software is to skip a large part of the process and remove any paper documents that would normally be needed.

Remember that you will still have to do your tax returns yourself unless you hire an accountant or agency to manage it instead. This means that you will want to keep track of the tax return dates and make sure that you are ready to submit it when you need to. Some of this software cuts the tax filing process down to under ten minutes, so there isn’t as much of an excuse for not doing it.

Low income

If you are in a low-income household or are a student, you will be given uFile Free straight away, allowing you to file your taxes as long as you own at least one compatible device. You should receive the letter automatically, but if not, get in contact with whoever is relevant in your local area and ask them to send another letter. As long as the Canadian government can see that you are earning less than the $20,000 threshold, you should be given access to the tool so that you can still file taxes.

Don’t hesitate to choose a different option if you don’t like your current choice. It doesn’t matter which tax return software you use as long as you handle your tax filing properly, even if you change to a different piece of free tax software each year.

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