Tax software angst

The filing deadline has come and gone but before we leave the 2007 income tax season completely behind let me pass along some pertinent observations about the tax preparation software that’s available in this country and the problems readers have with the various programs.

During April, I wrote some columns in my Internet Wealth Builder newsletter about the problems I encountered with the two tax preparation programs I used this year, QuickTax and UFile. Those articles spawned a flood of e-mails that indicated Canadians are frustrated by the bugs and incongruities in the software they’re using and fed up with what they see as a lack of responsiveness from the companies that produce the programs.

Most of the comments I received related to QuickTax, which is produced by Intuit Canada. However, that should not come as a surprise because QuickTax is far and away the top seller in the tax software field. Many of the complaints were prompted by the fact that QuickTax reduced the number of returns that can be prepared with its Standard package to two from five last year. One reader wrote:

“I do think it very sneaky that they chose to reduce the number of returns (in excess of $25,000 income) from five last year to two this year. I only discovered the very small print on their package after already doing my sister-in-law’s return and not having sufficient returns for my own and spouse’s without going through a rather lengthy process to buy additional returns. I believe that QuickTax could have been more “up-front” about the change or allowed some “grandfathering” to long-time users of their program.” – Harold W.

The angst over pension-splitting and the difficulties people encountered in trying to optimize the division between spouses was a recurring theme in the e-mails.

“I certainly don’t want this to be a rant against Intuit’s QuickTax software which I have been using for a number of years to file my family’s income tax. But when it came time to do my parents’ returns this year, I was shocked at the lack of guidance that this renowned software package offered in the area of pension splitting. I would have liked to see a utility much like what they currently have for RRSPs: a simple RRSP Wizard that lets you ‘slide’ the amount up and down, to instantly indicate how this affects your overall tax situation. Next year, if the software doesn’t advertise a comprehensive “Pension Splitting Wizard”, I’m looking to UFile.” – Ron B.

Some readers went beyond the problems in figuring out the process to suggest that an overhaul of the tax system is needed to deal with the effect of pension-splitting on family incomes.

“CRA (Canada Revenue Agency) is going to have to make some sort of provision for the effect of the pension income sharing. The situation now, of course, is that the deductions and installment payments are based on the expectation that the taxes are paid individually. When the sharing is implemented, the one from whom the transfer occurs will always have a larger refund and the recipient of the transfer will have a larger payment.” – Dale M.

One reader wrote to suggest that the federal government should assume the responsibility of providing all Canadians with tax preparation software. It’s an interesting idea, to say the least. He wrote:

“For the past several years, as millions of Canadians, I have been using one of those commercial tax programs to fill out my income tax return. But every year, I get p-o for having to pay for such a program to fill my tax return, which saves millions, if not billions, to the government while paper forms, which cost millions to print, distribute, and process, are available free.

“Last year I brought this to the attention of the Canada Revenue Agency. The reply from a pencil pusher was that the government did not want to compete with private enterprise. So, using the same logic, the government should stop printing tax return forms and their guides, in order to give a chance to some private enterprises to make money.

“My point is that the government should buy the best of these existing tax programs and make it available on-line for free, as they do for paper forms. What the government does in forcing us to buy such tax programs is simply to indirectly subsidize some rich accounting firms, most of them American.”
– Michel B., Coquitlam BC

Finally, I received favourable comments about some programs I had never heard about before. I intend to try one or more of them next year. These included CuteTax (, GenuTax (, myTaxExpress (, and StudioTax ( Hopefully, one of them has the answer to all our frustrations.

Portions of this article originally appeared in the Internet Wealth Builder, a weekly e-mail newsletter that provides timely financial advice from some of Canada’s top money experts. For more information about becoming an Internet Wealth Builder member, click here.