Tax season. Time to get out your financial records, turn off Netflix for an evening, and file your taxes. Are you prepared? Even more, are you looking for free income tax software in Canada? If so, this guide is definitely for you!
Table of contents
Before getting into the best options for income tax software in Canada, let’s cover some of the basics of Canadian taxes you need to know.
Who has to file taxes in Canada?
The short answer is that everyone has to file taxes in Canada. However, personal taxes are only one aspect of the Canadian taxation system. Here are all entities that should file taxes annually with the Canada Revenue Agency (CRA):
- Individuals: Every resident, temporary resident and Canadian citizen is required to file a T1 tax return each year. Even if you didn’t earn an income, you should still file for the possibility of a tax refund and access to government benefits.
- Corporations: If you own an incorporated business, you must file a T2 tax return.
- Trusts: If you have a trust, you must file a T3 tax return.
Related Reading: Marginal Tax vs Average Tax: Understanding Canadian Tax Brackets
What is the deadline for filing taxes?
The deadlines vary based on the entity. Here are all the deadlines for filing and paying taxes in Canada.
| Tax Return | Filing Deadline | Payment Deadline |
|---|---|---|
| T1 Income Tax Return | April 30 | April 30 |
| T1 Income Return (if you or your spouse/common-law partner need to file self-employed taxes) | April 30 | June 15 |
| T2 Corporate Tax Return | 6 months after your year-end | Varies (usually paid in installments quarterly) |
| T3 Trust Tax Return | 90 days after the trust’s year-end | 90 days after the trust’s year-end |
Related Reading: Types of Tax Returns in Canada
When can I file my return?
At the end of a tax year, it can take some time to gather and compile all your tax documents and information. Whenever you’ve finished this process, you can file your tax return, even if it’s well before the deadline. Moreover, if you’re expecting a tax refund, there’s an incentive to file early to get your money quicker!
That said, if you’re filing your taxes electronically, the CRA only opens NETFILE to accept returns at the end of February. For your 2023 taxes, the CRA started accepting electronic returns on February 19, 2024. Keep in mind, however, that many slips you’ll need are only issued in March!
Related Reading: How Long Does it Take to Receive a Tax Refund in Canada?
What is NETFILE?
NETFILE is an electronic tax filing platform. It allows Canadians to submit their personal income tax return to the CRA through the Internet. In other words, NETFILE is the Canadian government-approved tax software. Compared to traditional pencil and paper filings, NETFILE offers the following benefits:
- Reduces errors in the filing and calculation process
- Receive instant, electronic confirmation of tax return submission
- Don’t need to submit receipts, unless they are requested through an audit later
- Receive tax refunds faster
- Security and encryption to protect personal information
When does NETFILE open?
NETFILE is available for access online 21 hours a day, 7 days a week. The service is not available from 3 AM to 6 AM, EST time.
As mentioned above, NETFILE opens on a specific day to start receiving returns for the new tax season. This year, it was February 19, 2024.
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Benefits of Using Personal Tax Software in Canada
Broadly speaking, software can simplify processes, reduce errors, and create a paper trail for future reference. The same is true with tax software. Here are the benefits of using tax software for your annual returns:
- Reduces errors: Canada’s taxation system is complex. The benefit is a fair distribution of wealth, but it’s challenging to navigate as a taxpayer. Using tax software will reduce the number of errors when calculating your tax refund or payment.
- Optimize tax benefits: Tax software may include tax credits and deductions you were never aware of before. This could reduce your tax bill or increase your refund.
- Save money: Do you usually hire an accountant or tax professional to prepare your taxes? If so, using tax software instead will save you money.
- Quick prep and submission: Filing a tax return by mail using pencil and paper is a lengthy process. Tax software speeds up the preparation and submission process.
- User-friendly: There is a lot of paperwork and reading involved with taxes. Tax software is designed to be user-friendly to make the process easier for you.
Can I file older taxes with tax software?
Yes, you should be able to file older tax returns using tax software. However, there may be a limit on how far you can go back. For example, NETFILE only allows you to file from 2017 onwards. As a result, if you’re trying to go back beyond 2017, you may have some issues filing through tax software. Keep in mind that you can only file tax returns from past years up to 10 years.
Related Reading: Guide To Tax Credits: How To Get A Bigger Tax Refund
What to Look for When Selecting Tax Return Software in Canada
There is a ton of tax software out there, so how do you choose? Start by gathering a basic understanding of your financial position. Then consider the following factors when browsing options:
- Tiered programs: It’s common for tax software to have various tiers of service, each with different prices. For the average Canadian, the most basic option is enough to complete and file a return. However, if you have complex tax considerations, it could be worthwhile to upgrade to a higher tier.
- Electronic filing: Not all tax software allows you to submit your tax return electronically. Doing so, however, makes the tax filing process much easier, so be sure to consider this factor.
- Desktop vs. Online: Some tax software is downloaded to your desktop while others are completely online. The type you choose is a personal preference.
- Compatibility: Before purchasing or downloading tax software, make sure it’s compatible with your computer.
- Customer support: Some options come with customer support. If you want access to a support team, be sure to look into this aspect. Also, consider audit defence support.
- Integration: If you use accounting software to track your self-employed or business income and expenses, it might be easiest to find a tax solution that’s integrated with your accounting software.
- Guarantees: Tax software often comes with guarantees, such as maximum refund or penalty coverage when the system makes an error.
- Correct tax years: If you’re filing older tax returns, be sure that your chosen software allows filing in those years. Not every option allows you to go back indefinitely.
Corporate Tax Software in Canada
If you have an incorporated business, you may need corporate tax software too. Unfortunately, there aren’t as many options for free corporate tax software in Canada. However, you might find a provider that allows the first return to be free on a trial basis. Consider the same factors above when weighing your options for your business.
Related Reading: Estate Taxes in Canada
How can I do my taxes for free in Canada?
We’ve chosen seven of the best, free tax filing software in Canada — all NETFILE certified. Keep in mind that some of these providers have paid options if you ever need a higher level of service. In addition, if you don’t want to pay for a service, you may have to do some of the extra leg work. However, you can save some dollars this way!
Wealthsimple Tax
Wealthsimple is an online investment management service. They offer free tax software for Canadians referred to as Wealthsimple Tax (formerly known as SimpleTax). Since it is free, the company does encourage a donation to support Wealthsimple’s service. Wealthsimple Tax is currently the only tax software in Canada that can report cryptocurrency profit and loss.
| Pros | Cons |
|---|---|
| User-friendly and auto-fill features | No add-ons, such as audit defence or expert review |
| 100% accuracy guarantee. If you have to pay penalties or interest due to a system error, Wealthsimple covers the cost | Not ideal for Canadians with complex taxes, such as reporting business income or non-residents of Canada |
| Maximizes income tax refund and you’ll receive your refund within 8 days via direct deposit | Customer support may be limited in knowledge compared to other platforms |
| Encryption and security for personal information | Users should have a working knowledge of taxes |
| Ability to submit multiple returns in one account | |
| Customer support available via phone, chat and email | |
| Available nationwide in Canada | |
| Compatible with multiple device types | |
| Able to report cryptocurrency profit and loss — the only tax software that allows for this in Canada | |
| Re-file functionality for adjustments to completed filings |
Related Reading: Questrade vs Wealthsimple — Which One Is Right For Your Money?
TurboTax Free
TurboTax is owned by Intuit, the financial services company that also offers QuickBooks and Mint. If you use QuickBooks for your business or self-employment, TurboTax may be a good option for ease of filing. In addition, this is the most commonly used tax software for accountants in Canada.
| Pros | Cons |
|---|---|
| Allows for up to 20 returns per year | No customer support with the free version |
| User-friendly and auto-fill features | Not ideal for Canadians with complex taxes, such as reporting business income or non-residents of Canada. |
| Maximum refund guarantee | Hiring an accountant may be cheaper in some cases |
| Online community offers support for questions/tech issues | |
| 100% accuracy guarantee. TurboTax will cover the cost of penalties or interest caused by their error | |
| Available nationwide in Canada | |
| Updated annually to reflect changes in the Canadian tax system. | |
| Instant access to your Notice of Assessment after you submit your return | |
| Refiling services are available if you need to make adjustments after filing | |
| Encryption to protect personal information |
TaxTron Web
For basic personal and corporate tax returns, TaxTron Web is an online, free tax software in Canada. There is a paid service available that comes with a ton of benefits, but it can be a bit pricey.
| Pros | Cons |
|---|---|
| User-friendly | Paid service is expensive |
| Online platform available on any browser, no need to download and install | No audit support |
| Great customer support | |
| Access to resources, such as demo videos and FAQs | |
| Automatic saving, auto-fill, optimization features |
Related Reading: Best Crypto Tax Software in Canada
H&R Block Free
Offering tax services to Canadians for over 55 years, H&R Block is one of the oldest tax return services available. Unlike many modern solutions, H&R Block has many physical locations across Canada. Their online service is free, but like most options here, they offer additional tax services at a cost.
| Pros | Cons |
|---|---|
| Automated refund optimization | Audit protection only included in Protection Plan |
| User-friendly platform | Less support available with the free plan |
| Access to online help center | Less support is available if an audit or reassessment occurs outside of tax season |
| Paid tiers are available if you require a higher level of service | |
| In-person service | |
| Auto-fill features | |
| Import past returns, T4s and other tax documents from PDFs | |
| Multiple options to collect a tax refund |
uFile Free
uFile is available in both an online and desktop version. uFile is free for students through a partnership with the Canadian Federation of Students. You can also use the tax software for free if you meet one of the following requirements:
- You’re filing a simple tax return (meaning you’re only reporting employment or pension income)
- You’re a newcomer to Canada and are filing your first federal tax return
- A low-income taxpayer (meaning your total family income is $20,000 or less)
If you don’t qualify for free filing with uFile, there is also a paid version available.
| Pros | Cons |
|---|---|
| Free for students and individuals filing simple tax returns | Not free for individuals filing complex tax returns |
| Accuracy guarantee | No reimbursement available for accuracy guarantee |
| Import data from previous years | Does not support all kinds of tax returns, such as farming income or bankruptcy reports |
| Auto-fill | No audit protection available |
| Notice of Assessment available through the platform | |
| Refiling available for past returns |
GenuTax
GenuTax is a free tax software in Canada that can handle most tax scenarios. Since it is free, the software does prompt the user to make a donation when filing.
| Pros | Cons |
|---|---|
| Prepare up to 20 tax returns each year | Limited customer service, available through email only |
| 100% free for all users | Only available for installation on Windows, no online platform |
| Refiling options are available | Software dated and lacks some features you can find for free elsewhere |
| Auto-fill features | No optimization tools or guarantees |
EachTax
EachTax is a simple tax filing software. It is free for new customers, newcomers, seniors 70+, and those with $25,000 of income or less. If you don’t meet these requirements, the software is quite affordable.
| Pros | Cons |
|---|---|
| Auto-fill features | Customer support only available through email |
| Software can handle simple and complex tax returns | You may have to pay for service depending on your tax circumstance |
| Notice of Assessment available | |
| Built-in error checking and tax savings tools | |
| Refile services available | |
| Available online (no need to download and install) | |
| Audit assistance |
Choosing free tax return software in Canada
Tax season isn’t always the best time of year, but filing taxes online in Canada doesn’t have to be a challenge. Take your time choosing a software that’s right for you and get your taxes off your checklist that much quicker!
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