The average Canadian gets more than $1,800 in their annual tax refund. Yet, many Canadians accidentally get less than they're entitled to.
Conversely, small business owners and self-employed individuals may find themselves owing more taxes than they'd thought. This makes it hard to avoid back taxes.
Low refunds happen when filers don't claim tax credits. The Canada Revenue Agency (CRA) lists plenty of tax credits you could add to your refund.
But, most Canadians don't know which credits they're eligible for. Or, they're not sure how to claim tax credits.
Tax filing software solves these problems. TurboTax is one popular option.
Is TurboTax Free?
Intuit TurboTax is a tax filing company. It sells software, tax accounting services, and apps. TurboTax's suite of software products includes options at a range of price points.
Some TurboTax Canada options are free. But, the free software may not work for you.
TurboTax offers options in five general categories. Each category serves different clients. Let's examine pricing in each category.
Free Tax Software
TurboTax Canada offers two free filing software programs. The free options are:
- TurboTax Free
- TurboTax App
TurboTax Free is an entirely online program. You don't need to download it to use it. This program empowers filers to fill out their return in easy, sensible steps.
The free program lets you automatically fill in your return. You just import your information directly from the CRA.
Canadians who use TurboTax Free follow a checklist to claim tax credits. They can also get help from the TurboTax Community forum.
Note that self-employed Canadians cannot file for free with TurboTax. If you're self-employed, you'll have to pay for add-ons. Or, you can try a different TurboTax product.
The TurboTax app is also free. It includes similar features. It's also CRA certified.
TurboTax Live products are not free. This line combines the software with human expertise.
TurboTax Live products let you file taxes online with the help of a professional. The products are:
- TurboTax: Assist & Review
- TurboTax: FullService
TurboTax Live sets different prices for self-employed Canadians and salaried filers. The self-employed variants cost more.
TurboTax Live (General)
TurboTax: Assist & Review costs $79.99 per return. TurboTax: Full Service costs $129.99 per return. With TurboTax: Full Service, the professional files all forms for you.
TurboTax Live (Self-Employed)
TurboTax: Assist & Review costs $99.99 per return. TurboTax: Full Service costs $199.99 per return.
With the Assist & Review product, self-employed filers get immediate advice on claiming self-employment expenses. The expert tailors their recommendations to you and your work.
Software Download Products
TurboTax offers four software download products. Filers can install these software programs from a CD.
You can also download them directly. Your computer must meet the minimum system requirements to run the software.
None of the TurboTax Software Download Products are free. The prices are:
- Basic: $19.99
- Standard: $34.99
- Premier: $74.99
- Home & Business: $119.99
The Basic program includes four returns. Each step up includes more returns, with Home & Business enabling the highest number.
Compare each option's merits and limitations here. Note that the latest editions of each program offer Covid-19 support features.
TurboTax offers three options for self-employed filers. We've already noted the first two. Those are the self-employed editions of the TurboTax Live line.
TurboTax also offers an online, DIY option. This is TurboTax Self-Employed. TurboTax Self-Employed costs $49.99 per return.
This program can accurately file income from many sources. TurboTax Free doesn't have this capacity.
Business Tax Software
TurboTax offers a suite of products for small business owners. Each product is tailored to a different-sized small business.
None of TurboTax's Business Tax Software products are free. The three options are:
- Home & Business: $119.99
- 20 Returns: $144.99
- Business Incorporated: $249.99
Home & Business works best for small business owners with no employees. It includes twelve returns.
TurboTax: 20 Returns lets you file up to twenty returns. But, only TurboTax: Business Incorporated lets you file T2 returns.
Is TurboTax Safe?
It is safe to file taxes online with TurboTax. TurboTax is NETFILE-certified.
The CRA created NETFILE in 2001. It's a secure method of transmitting documents electronically. Canadians can only submit tax documents virtually through NETFILE-certified programs.
The CRA maintains NETFILE's security by continually updating the encryption. The CRA maintains the servers daily. NETFILE also reduces the risk of human error.
Human accountants could introduce errors when typing in tax information on physical documents. With direct digital transfer, typing is unnecessary.
TurboTax Breach in the USA: Canadian Info Safe
In 2015, hackers used TurboTax software fraudulently in the United States. Malicious actors bought stolen personal information. Then they used it to access secure tax information.
But, that type of hack and fraud is impossible in Canada. Differences in the filing process and structure make Canadian TurboTax invulnerable to cyberattacks.
There are no recorded cases of information theft with Canadian TurboTax. Likewise, CRA's security has never been breached.
TurboTax Security Measures
Canadian TurboTax uses several methods to secure private tax information. These strategies include:
- Multi-factor authentication
- Data encryption
- Safeguards programmed into the software
Multi-factor authentication prevents someone from stealing your identity. It requires a user to verify his identity in multiple ways before he can access his file.
This makes it almost impossible for a hacker to pretend to be you. Thus, an impersonator can't access your tax information.
Data encryption disguises information. It translates information into a code when it transfers. Only a program with the correct decryption key can read the information.
Other safeguards protect your information from viruses and other cyberattacks. These strategies keep filers safe.
That said, these systems aren't Foolproof. Hackers can take over a filer's account if they figure out the password.
Weak passwords leave many accounts vulnerable to attacks. But, this is not a security problem on TurboTax's end.
As a filer, you can do a lot to improve your information's security. TurboTax and its parent company, Intuit, both offer information security tips. These companies publish recommended best practices online.
How Do I Use TurboTax?
If you want to use TurboTax, first choose the right TurboTax program for you. Each program includes a walk-through guide.
Here, we'll run through the key steps to file with TurboTax Free. Follow these steps if you're a salaried employee in Canada to use TurboTax online.
Before you begin, have your tax slips ready. Salaried employees should have a T4 slip from their employers.
If it turns out you don't have the necessary information on hand, don't worry. You can save your progress at any time.
You can leave and continue later. You can also go back and edit your information before you file your return.
1. Login or Sign Up
Access TurboTax Canada login if you've used this program before. TurboTax will take you to a page that lets your view previous returns or begin a new tax return.
2. Answer Personal Information Questions
TurboTax asks you multiple-choice questions. It also asks fill-in-the-blank questions. Answer them about yourself.
3. Add Income
Add your employment income one type at a time. Click the "Find" button to see your income by form. Search for "T4" to find your remuneration slip.
Use your T4 document. Copy the information (per numbered box) on the paper into TurboTax. Make sure to fill in any exemptions noted on your form.
TurboTax offers a few autofill options. After you fill out the screen, scroll down to the bottom. Click "Save and Continue."
Repeat this process for all income sources. If you only have one T4, click "Done With T4." Then, click "Find" again to pull up another income source.
4. Add RRSP Information
RRSP is a Registered Retirement Savings Plan. TurboTax offers RRSP optimization options on this screen. But, these services are not free.
Add RRSP information with the multiple-choice options. Then, continue.
5. Explore Deductions
TurboTax asks simple questions. Then, it presents you with typical deduction options.
Move through all questions. If you don't know the answer to a question, try using the Community Help forums.
6. Province-Specific Information
Look at tax credits available to filers in your province. Your province may also offer tax grants or funds.
TurboTax offers a list of options. The options include hyperlinks. These take you to sources that teach you more about the credit, so you can learn if you qualify.
You may need to have your personal finance information on hand to answer. For example, you may qualify for tax credits if you paid over a set amount in rent in the past year.
7. Review and File
The final section is "Review." Review all the information you input. If it's all correct, go ahead and file your return. If it's not, go back and input the correct information.
TurboTax offers filing guides to help people in unique situations. Read the guides if you are:
- Working multiple part-time jobs
- Living in Quebec or Ontario
- Working abroad
- Filing back taxes
In these cases, you may benefit from a professional guide. You might also want to begin the filing process early, so you have time to ready your paperwork.
Where to Download
TurboTax reviews praise the software. Most review outlets note its ease of use. Young and Thrifty named TurboTax the best tax filing software.
Many reviewers appreciate the live options. They contrasted TurboTax with competitors to clarify its utility. Note the different prices, encryption methods, included features and add-ons when comparing multiple options.
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