Small Business Tips
Updated 2019 July 1
When it comes to tax software available to Canadians, there's no lack of choice. Not that long ago, on the tax deadline, last-minute tax filers would rush to the post office to get their envelopes in before midnight.
Today, it's easy to prepare and file your taxes online for free, or for a reasonable price. The CRA makes it easy to file online. In fact, 87.5% of Canadian taxpayers did just that in 2018! The CRA certifies all NETFILE-certified tax software. You can even import your tax slips from the CRA into any NETFILE-certified product using the auto-fill feature.
If you're self-employed or a small business owner, free software options might not do the job. So, you'll need to choose based on your personal tax needs. You might need support for business deductions, such as mileage expenses when you drive a car for business. More on that later.
If your tax situation is basic, free income tax software could be a good option. Free programs are good for people with simple needs, such as students or salaried employees with one source of income.
TurboTax (TT) has been the leading tax preparation software in Canada for years. Their free and paid versions are exceptionally easy to use.
Pros
Cons
Other free tax software products use a pay-what-you-want model. We'll review some of them below. The CRA lists all NETFILE-certified free and paid tax preparation products.
These free alternatives to TT offer key benefits such as the ability to import last year's data in the second and later years. But they aren't totally free.
The advantage of the pay-what-you-want model is access to a full-featured product. But you'll see donation requests for specific amounts. Anyone can use free tax software, however, paid options offer a lot more features for freelancers, self-employed individuals and small business owners.
These free alternatives give you the important ability to import last year's data. But only if you used the same software in the previous year. However, they aren't totally free. The advantage of the pay-what-you-want model is access to a full-featured product. But you'll see donation requests for specific amounts.
Anyone can use free tax software, but paid options offer more features for freelancers, the self-employed and small business owners. Consider TurboTax's paid options if you have business income and expenses, rental property and investments. If you do your own taxes, TT could be a cheaper full-featured alternative to hiring an accountant.
TurboTax leads the pack when it comes to tax software options in Canada. It has a vast number of options for individual taxpayers, from two basic free versions to advanced features for self-employed individuals, business owners and incorporated businesses.
Key features of paid versions include a detailed interview and "easy-step" process. They walk you through inputting your amounts and explain eligible deductions.
Paid online options range from $20 to $60 per return, depending on how much guidance you need. With desktop versions, you can file up to 12 returns. Prices range from $15 to $120. The most popular version of TurboTax is the desktop Standard version, at $35. You can file up to 8 returns, which is a good option for families.
If you own rental property, only TurboTax offers three versions for real estate investors. What's to like? Intuit says its rental income versions provide "expert guidance on investment income and expenses, and rental property income and expenses."
All tax software packages in Canada, such as StudioTax or Ufile, have the forms required to handle rental property income. But only TurboTax offers expert guidance.
Ufile and StudioTax Enterprise also offer versions for filing taxes for corporations.
Again, TurboTax is the only one to offer a specific version for the self-employed. It provides extra guidance for maximizing self-employed business deductions and expenses.
According to TT product info, it features advanced guidance for self-employment income and expenses, including side businesses and home-based businesses. Self-employed expenses include business use of your home and car, and business mileage expenses, to name a few.
There are plenty of choices to consider, especially if you run a small business.
All NETFILE-certified tax software in Canada has the necessary forms to file business and self-employed income and expenses. If you can live with less guidance and want a DIY solution at the lowest cost, a free version might suffice.
But if you're looking for the easiest and quickest solution, TT walks you through the entire process. It has the widest range of products in Canada, and the best live support options and guidance.
TurboTax advanced services and a "do it for me" option
TurboTax isn't the cheapest tax software. But with its assistance service and a do my taxes for me service for $100 ($180 for self-employed), it's hard to find a better value. An accountant might charge you a thousand dollars or more for tax preparation, for similar results. Something to consider, unless you'd rather hand everything over to a professional.
TurboTax and QuickBooks integration: Why should you care?
Intuit, who develops TurboTax, also makes QuickBooks - a leading business accounting software package. Both products are best in class. And as Intuit continues to integrate the two products, expect more gains in time and money.
