Free Tax Software - reviewsSoftware de impuestos gratis - críticas Logiciels d’impôt gratuits - critiques

I finally finished filing my 2020 taxes over the weekend - the Canadian tax return on Saturday night and the US on Sunday night (and FBAR the weekend before - wish the CRA provided a standard e-file system like the one for FBAR). I spent more time than I should have on the Canadian return due to difficulties in finding free software that would meet my needs, so I will share my reviews of the Canadian tax software that I have tried so far.

My particular needs:

• T1135 - Foreign Income Verification Statement
• Rental income (T776) with CCA (Capital Cost Allowance - Canada's depreciation)
• Investment income - Canada and foreign (US)
• Wages (Canada)
• The ability to e-file all returns

I used SimpleTax for my first tax year in Canada (2018 tax year), then switched to StudioTax last year for 2019 and was happy with it until they started charging this year for 2020. It is still free with the phone app but not with the computer program; theoretically, you could prepare your return on your computer and transfer the file to your phone to open in the phone app to e-file, but it sounds like hassle and without guarantee that it will work. After trying GenuTax and AdvTax and having issues, I finally filed my 2020 return with H&R Block.

I quit using SimpleTax ever since Wealthsimple bought SimpleTax starting with the 2019 tax year and there have been privacy concerns.

I was able to import T4 and T5 slips from CRA into all the tax programs that I have tried. This is a big advantage that Canada has over the US. Some payroll providers and some brokerage firms in the US let you import W-2 or 1099 data into certain tax software, but it's not centralized and available for everyone the way it is with the CRA in Canada.

GenuTax

GenuTax is a free desktop software with an interface a bit like StudioTax's, but not as easy to navigate. 

Advantages

• You can view your actual tax return before filing, unlike with H&R Block
• Supports many situations beyond the simple ones
• CRA NETFILE certified (as of 2017-2020)

Disadvantages

• User interface is not the most friendly but not terrible
• There is little guidance; it's best that you have a good idea of which forms you need to file and what your return should look like
• It is a bit hard to navigate; best thing to do is to hit F9 or click Jump to Section (F9) at the bottom of the screen to find what you want
• Can't enter multiple rental properties on one Form T776
• Can't e-file Form T1135 (deal breaker for me)

I would say GenuTax is fine for people who don't need to file T1135 and who know which forms they need to file. 

AdvTax

Many sites list AdvTax as a free software and it used to be free, but not anymore this year! I even entered all my information and tried starting the e-file process, only to get a bill for $20 that would have to be paid before I could e-file. I clicked on Advice and Assistance and submitted the question on why was I being billed $20 when it supposed to be free. Their response was:

"AdvTax was free for past several years. But we cannot maintain the service without any revenue. Running this service needs finance support. Currently the application is still free for low income and only requests a fee for some of users based on a ratio."

Their interface is very primitive and not pleasing to the eyes, but they do show the actual forms that you enter input on, which is very helpful and better than GenuTax and H&R Block in this regard.

Since I wasted too much time with AdvTax, here is my feedback:

Advantages

• Can see the actual forms, unlike with H&R Block
• Supports e-file of T1135
• Can find the forms you need somewhat easily in the Select/search other forms dropdown
• Can enter multiple rental properties on one Form T776, unlike GenuTax and H&R Block (Studio Tax can support this as well)
• CRA NETFILE certified (as of 2017-2020)

Disadvantages

• User interface is very primitive, but not too bad to navigate after you get used to it
• T1135 issues! The page 2 of my T1135 kept becoming blank after I had filled it out and gone to another part of the return.
• Can't specify specific CCA (Capital Cost Allowance or depreciation) amount to take. If you want to take less than the maximum amount allowed, you can't override the amount. You have to change the percentage in the depreciation table, but it will take only percentages up to 2 decimal points, so you often can't get the amount to work out to an exact number that you want.

H&R Block

Frustrated after trying both GenuTax and AdvTax without success, I finally filed with H&R Block.

Advantages

• It really is free
• Supports e-file of T1135
• While entering data, it's easy to find where to click for more information and explanations.
• Good help pages that are easily found when searching. This is particularly important given that the navigation is not the best (although by no means the worst).
• CRA NETFILE certified (as of 2017-2020)

Disadvantages

• Can't see your return until after you have submitted it for e-file. You can only see a summary of key amounts. I want to be able to review the actual form detail before filing; fortunately I had already done my taxes with the other 2 programs and was able to compare key amounts.
• Rounding errors, specifically when adding up federal and provincial tax liability
• Can't enter multiple rental properties on one Form T776
• I had some trouble finding the place to enter foreign dividend and interest income. I eventually got them to appear on the right place on the T1, but not in the right place on the Worksheet for the T1 return

I'm still in the market for a better free software for Canadian taxes, so let me know if any of you know of anything better!

Update: H&R Block now has a refer a friend program. Use code DIYSERVSSEDCSX6 to get 10% off the paid version.

TaxMan

I have not tried TaxMan personally, but I have seen it mentioned on other sites about free Canadian tax software, so I am just listing it here for future reference and welcome feedback from any of you who might have tried it.

TurboTax

Although TurboTax is the most user friendly with the best guidance, the free edition is extremely limited and does not even support RRSP contribution deduction. This is approximately the same feeedback that I have for the US version.

CRA's list of free and non-free NETFILE certified tax software

Free, expat-friendly US tax software

The options on the US side for citizens living abroad are severely limited, but I'm happy to have found OLT, which meets all of my US expat tax needs, which are the following:

• Foreign address (sadly, a lot of US tax software does not support foreign addresses)
• Form 2555 - Foreign Earned Income Exclusion
• Form 1116 - Foreign Tax Credit
• Form 8938 - Statement of Specified Foreign Financial Assets
• Rental income (Schedule E) and Depreciation (Form 4562)
• Investment income (Schedules B, D)
• And of course, the ability to e-file all returns

OLT gives free federal return to everyone, free state if your AGI is between $16,000 and $72,000. It also provides a list of supported forms, so you can quickly see if it will meet your needs.

Before discovering OLT when doing my 2019 taxes, I used Free File Fillable Forms for my 2018 tax return. You pretty much manually fill out the forms on screen and really need to know what you are doing, but they can handle pretty much all tax situations.

I used FreeTaxUSA for a number of years and still use it to prepare returns for friends and family, but can no longer use it for myself because it supports neither foreign addresses nor Form 2555. They do have a list of supported forms, so you can quickly see if it will meet your needs. But for people living in the US, it does support most tax situations, and I like how it carries over W-2 and 1099 payer information from previous years and does some prior year comparison.

IRS Free File list