Small Business Tips
What Is the Best Free Tax Software in Canda?
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.
Which free tax software reigns supreme in Canada?
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 Free: Online and desktop versions
TurboTax (TT) has been the leading tax preparation software in Canada for years. Their free and paid versions are exceptionally easy to use.
Pros
- TT uses a series of questions to guide you. If you're a student or have a basic tax situation, TT's free version might right for you.
- Includes some of the intuitive features from TT's paid versions.
Cons
- If your situation is more complex, the free version might not be ideal. It only does basic checks.
- TurboTax Free versions don't import the previous year's data. You'll have to key in more information at tax time. To save yourself the trouble, you can use a paid version of TT or other free software, such as SimpleTax.
- The desktop version of TT limits you to two tax returns. If you need more (for a child or parent), you'll have to use the online version.
- TT paid versions provide advanced guidance and step-by-step instructions for investment income, rental properties, business income, deductions and capital expenses.
- Despite its popularity, TurboTax bombards users with in-app upgrade prompts. They're annoying, but there's a way to turn them off.
Other free tax software
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.
SimpleTax features:
- File online on a single web page
- 20 return limit, free to use
- Pay-what-you-want (donation)
- It's simple to use because you input all your data on a single web page
- The company stores your tax data on its secure servers
- You get basic guidance and questions
StudioTax features:
- Desktop software
- 20 return limit, free to use
- Pay-what-you-want (donation)
- Stores your tax data on your PC
- Unlike TT Free, you can import your prior year StudioTax data
GenuTax features:
- Desktop software
- 20 return limit, free to use
- Pay-what-you-want (donation)
- It handles capital gains, rental property income and small business needs
- Step-by-step basic interview
- GenuTax doesn't support Quebec tax returns. You'll have to look elsewhere if you live in Quebec!
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.
What is the best tax software for individuals or the self-employed?
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.
TurboTax paid versions: Key features
- Three online single-return versions and four downloadable versions that let you file several returns. Costs range from $15 (basic version, four returns) to $120 (Home and business version, 12 returns)
- Live assistance with tax professionals who help answer your questions
- Available tax preparation service for a per-return fee of $99-$129
- An online community, tax experts and other live support options
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.
