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8 Best Free Tax Software In Canada According To Your Need

Filing your tax returns online is now a cinch with cheap and even free tax return software. If you have a simplified tax situation, then bid farewell to your accountant; you can file taxes online easily through the best free tax software in Canada. Canadians have ample options to choose from, but we have your back for choosing the best suitable tax software for you. By choosing the best free tax software, you can quit paying a tax consultant and add up your savings.

Before getting into the best free tax software in Canada, you need to know some fundamental concepts of the tax return system in Canada.

Who Has To File Taxes In Canada

The answer to this question is simple: all must file taxes in Canada. Broadly there are three categories of people who have to file a tax return annually with the Canada Revenue Agency (CRA) via electronically using tax software or physically.

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  • INDIVIDUALS

Every resident, temporary resident and Canadian citizen must file a T1 tax return annually. Even if you don’t make money, you should still file the return to access all the government benefits and tax refunds.

  • CORPORATES

If you run an incorporated business, you must file a T2 tax return annually.

  • TRUSTS

If you are running a trust or NGO, you must file a T3 tax return.

When Should You File Your Return

At the end of the year, take your time to gather all the information and documents needed for tax return filing. You can file your return whenever you are done with all the documentation. However, if you are expecting a tax refund, you are incentivized to file it before time.

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If you are filing the tax return online, the Canada revenue agency opens NETFILE only at the end of February. For your taxes for 2021, NETFILE was opened on February 21, 2022. However, don’t forget many slips which you may need will be issued in March.

What Is The Deadline To File Taxes

Deadlines differ based on the entity you are associated with. The filing and payment deadline for T1 (income tax return) is April 30. But for T1 (if you/ your spouse are self-employed), the filing deadline is June 15, and the payment deadline is April 30. For T2, the corporate tax return, the filing deadline is 6 months after the business’s year-end. Instead, the payment deadline varies from business to business. For T3, the tax return for Trust, the filing and payment deadline is 90 days after the financial year-end of the trust.

Advantages Of Using A Online Tax Software In Canada

Using software can ease your work, reduce errors and track returns for future reference. Here are the advantages of filing taxes annually using personal free tax software without a tax consultant.

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  • Save money

Filing your taxes electronically using software cuts the cost of hiring an accountant or tax consultant. This way you can save money.

  • Reduce errors

Using a suitable tax system reduces errors as all the calculations are made electronically, free from human errors.

  • Speedy process

Filing taxes online is much faster than using a paper pen method.

  • Tax Benefits

The software makes you aware of numerous tax deductions which can reduce your tax bills or increase refunds.

  • User friendly

Tax software comes with a guide for new users. These are easily accessible and save a lot of time for users as paperwork is eliminated.

How To File Your Tax Electronically In Canada

Online tax filing is the most usual way in Canada. In the financial year, 2019, a lot of people filed their returns online using free tax software. There are 3 methods of filing returns online.

1. NETFILE

For over a decade, NETFILE has been a service by CRA for individuals to file their tax returns directly using certified tax software. This gives an immediate confirmation in the form of a message or e-mail that CRA has received your tax returns and tax refunds will be intimidated later. It is the most used application during tax season.

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You can file only up to 20 tax returns per online account using NETFILE-certified tax software in Canada. Tax software companies must respect this limit. Non-residents of Canada and anyone who has been bankrupt in the last 2 years cannot file returns using NETFILE.

2. File My Returns

File my returns is a tax software in Canada which enables individuals to file their taxes through mobile phones. Only those with low and consistent income yearly are eligible to use this option. CRA sends an invitation letter through e-mail to the eligible filers in February.

3. EFILE

EFILE is also a CRA-authorized service provider. Any accountant or professional tax consultant will most likely use EFILE to send your tax returns. Filing returns online using certified tax return software is much faster and more secure. Even the refunds are intimidated within the 2 weeks. The government has also encouraged electronic methods for filing a tax return.

How To Choose Best Free Tax Software

There are tons of software to choose from. You should consider these hand-picked features while picking the most suitable software for filing your returns.

1. Ease In Operating

If you are not from a tax background, it will be difficult for you to access the complicated tax filing process. So, you need to look for an option which is easily accessible by a user who has no experience. Choose the software with a wizard to guide you through the entire process. This way, you can access all the options of software even without being an expert in the field.

2. Refund Tracking

Choose software that provides transparent information for your tax refunds and can track your refunds as soon as you enter data from your tax slips. The software should also have the option of an instant refund calculator. It helps you to have precise information.

3. Compatibility

You should choose tax software compatible with your computer’s operating system. There are ample options to choose from if you have windows, but if you have Mac, the options are pretty limited.

4. Free Version

If you are a salaried employee with no rental income, self-employed income, or investment income and have a simplified tax return, then there is no need to go for the paid version of the software. The free version of tax software is enough for your returns.

5. NETFILE Certified Tax Software

Prefer income tax software which is NETFILE approved. NETFILE directly sends your returns to CRA quickly and securely. Almost every online tax software is NETFILE certified, but it is advised to check beforehand.

6. Auto Fill

Auto fill isn’t a feature you can find in all free versions. Rather it is usually seen in paid versions. It takes your tax information from CRA, import figures, and information from previous years. It is a great help and a time saver as there is no need to put all the data manually into the software.

7. RRSP Optimizer

RRSP Optimizer is a convenient tool that lets the user quickly see how varying RRSP deduction amounts will affect the refund. Depending on when you do your returns, you may decide to top up your RRSP for additional tax savings before the contribution deadline. It can also help you plan for the following year’s RRSP contribution.

8. Faster Refunds

Usually, if you file your returns with an online tax software in Canada, you get a faster tax refund. It takes only 8 business days.

Whether You Should File Your Return Yourself Or Should Hire A Professional

It depends on you. You should first examine and review your tax situation. Suppose you have complex tax situations like capital gains, investment, or self-employment business income. In that case, you should hire a tax professional to get personal finance tips or tax savings plans. This can be helpful during the tax season.

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Though it can be expensive to take the services of a professional but can save you a lot in the future, the professional may be an accountant, tax consultant or CPA. On the other hand, if you have a simplified tax return, taking up a professional’s services is a waste. You can easily file your returns using the above-mentioned tax software according to your needs.

Tax Clinics

This is the concept where you can get help with your taxes by visiting nearby tax clinics across Canada. Some volunteers of community organizations host these under the Canada Revenue Agency’s Community Volunteer Income Tax Program (CVITP). These volunteers can help you to file your taxes for free. Depending on the clinic, you can simply walk in or book an appointment on the phone to schedule a meeting with the volunteer. They will tell you to drop off your documents and collect them after filing your return.

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During the pandemic, these tax clinics also worked virtually. They hosted many virtual appointments to help the clients. However, you need to have a simple tax situation and a moderate income. A simple tax situation is when you have income from employment, pension, RRSP, interest less than $1000 and benefits. Moderate income varies according to family size. Tax clinics are not for you if you are self-employed, have capital gains or losses, business income or rental income and more.

Best Free Tax Software In Canada

Here is some CRA-certified best tax return software in Canada for returns submissions. These are all free versions to file your taxes online, and some include paid options for additional features. These free tax filing options are exclusively available in Canada.

1. Turbo Tax-Free

Turbotax Free is the well-known free tax return software in Canada which provides both free and paid versions to Canadians. The free version of Turbo Tax software has no maximum income limit. The filers access this tax software at all income levels and don’t require additional features offered by the subscribed version. 

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In paid versions, it includes an audit defence that gets your tax return reviewed by a tax professional. One limitation of Turbotax free is that it does not allow users to import the previous year’s tax return information.

Pricing- There is a free version of the Turbo tax. Additionally they have 3 paid levels- $19.99 / $34.99 / $44.99

Free features:

  • CRA and NETFILE certified

  • Real-time refund tracker

  • Faster tax refund

  • Permits up to 20 returns per year

  • Instant access to notice of assessment after submitting your return

  • Turbo tax has an option REFILE if you need to make adjustments to your tax return

  • TLS encryption to ensure your privacy

Paid Features:

  • Auto-Fill to import the previous year’s tax information

  • Customer support

  • Audit Protection

  • Recognize up to 400 various tax savings opportunities

  • RRSP optimizer

2. Wealthsimple Tax

For over 8 years, Wealthsimple tax has been offering Canadians 100% free service to file their tax returns. They go on for the pay-what-you-want model. It provides step-by-step guidance and 100% accuracy. The highlight is that if there is any calculation error, the penalty is covered by the simple tax. They provide an option to donate too if the user wishes to.

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The options other software has in the paid version, the Wealthsimple tax software, provides for free. These options include the maximum refund, auto-fill and a lot more. The Wealthsimple Tax can control any complex tax situation like self-employed income, business income and investment income, which neither free tax software can implement. You can even submit multiple reports per account. It is the best free tax software in Canada.

Pricing- Wealthsimple tax software is 100% free, including the voluntary donation option.

Features:

  • CRA certified

  • Refund tracker

  • Refund Optimizer

  • Limit of 20 returns per year

  • Free support via mail

  • Auto fill

  • Maximum refund guarantee

  • Encryption to ensure privacy

3. H&R Block Free

H&R Block and income tax in Canada go hand in hand. They have been offering tax services to Canadian people for more than 55 years now. It is a hub where thousands of people go to have their tax returns prepared and filed. You may not have realized that H&R Block has its free income tax software, allowing users to file taxes while sticking to the same brand.

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It has three-tier software, including a free version which is the same as Turbotax’s free tax return software. But if you have complex tax situations like self-employed income, you can look for the paid versions.

Pricing- $0 / $19.99 / $29.99

Free Features

  • NETFILE and CRA certified

  • Ideal for simplified returns

  • Auto-Fill

  • Smart Switch

  • Built-in error checking

Paid Features

  • Personalized tax tips

  • Tech support

  • Smart-Review

  • H&R Block Audit Defence

  • Assistance in tax planning by tax professional for additional dollars

  • Customer support line

  • Audit Protection

4. Studio Tax

Like Wealthsimple tax, Studio tax is also a free income tax returns software, which is accessible on both Windows and Mac. The platform is simple, as they can handle self-employment and rental income. You can file up to 20 returns annually and import previous years’ data with the auto-fill feature. Additionally, Studio tax software doesn’t have a cloud-based filing option.

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You can download their software on your PC or Mac desktop, as you can’t access it online. It does not have a mobile version for a smartphone or tablet.

Pricing- Studio Tax is 100% free.

Features

  • CRA certified

  • Refund tracker

  • Refund Optimizer

  • limit of 20 returns per year

  • Auto fill

  • Download only

  • No online version

5. UFile Free

UFile is a free tax software accessed online via Windows and Mac and mobile versions. Electronic filing through UFile can be done offline by downloading or via a CD-ROM. Now the updated version of this software is preferably accessed on Windows 10. UFile software is free if you meet the eligibility criteria:

  • If you are a student.

  • If you file a simplified income tax return. (non-complicated tax scenarios)

  • If you are new to Canada. (filing tax return for the first time)

  • If your total family income is less than $20,000/year

Pricing- Free tax filing software if you meet the criteria, the paid version is approximately $20. The pricing differs in the online version and downloadable version.

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Free Features

  • Up to 20 returns per year.

  • Free for your first federal tax return if you are a low-income taxpayer (total family income is $20000 or less)

  • Free for students.

  • NETFILE approved.

  • Suitable for 1 income source returns (have income restrictions)

  • Guarantee: Accuracy, satisfaction, and best tax results.

Paid Features

  • Accommodates multiple sources of income.

  • Handles tax filing at any income level.

6. Cloud Tax

Cloud tax offers two versions of its software: Cloud Tax-Free and Cloud Tax Pro (paid). You can call cloud tax an advanced version of Turbotax Free. This tax filing software is used for simplified tax situations only. It offers an unlimited chat support option but cannot handle self-employment, investment, and rental income.

Pricing- Cloud Tax Pro has 2 levels. $39/tax return and $69/tax return.

Free Features

  • NETFILE approved

  • Digital tax return storage

  • Unlimited chat assistance

  • iOS mobile & iPad, and android application choices

  • Auto-Fill

Paid Features

  • Audit Defence

  • Review by a tax professional

  • Self-employed income & rental income

  • Audit protection- $2.99/month

7. GenuTax

GenuTax is downloadable tax return software that can handle up to 20 tax returns. It is a free tax software in Canada, but they encourage voluntary donations. It is available on Windows only. Tax software will guide you in an interview format at your convenience. You can file returns from any previous year also through this tax software. Capital gains, rental income, northern living benefits, or self-employment income can handle any type of tax situation. It is one of the best tax software in Canada.

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Pricing- GenuTax is free, but they do encourage donations.

Features

  • CRA and NETFILE certified

  • Limit of 20 returns per year

  • Express NOA (Notice of assessment)

  • Have ReFILE option

  • Auto fill

  • Can handle individual and joint tax returns

8. EachTax

EachTax is a tax filing software free for new customers, new immigrants, senior citizens (older than 70) and those with income of $25000 or less. There is no need to download it as it has an online version. Instead, also this tax return software is quite affordable. It can handle simple as well as complex tax situations. It has built-in error checking and tax savings tools. It also provides audit protection.

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Pricing- Free if you meet the eligibility criteria. $6.99 for the first tax return and $3.99 for the other tax return.

Features

  • Auto Fill return from CRA

  • Express Notice of Assessment

  • Built-in error checking

  • Tax Saving

  • ReFILE

  • Secure and safe

Conclusion

Tax season is always stressful, but now Canada is at ease. Canadians have many options to choose from. But sometimes, more options lead to more confusion. It is advised first to analyze your return requirements. There are options for self-employment income, investment income, capital gains and all the requirements, and it’s just that you have to find the correct fit for you.

Above is the list of the best free tax software in Canada with their features highlighted. Go through it after analyzing your requirements, and choose the best suitable software for you. Don’t forget to collect tax slips afterwards.

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