Online
Tax Software Review 2010
Summary:
I tested
Online tax applications from three companies last weekend - Quicktax,
Tax Chopper.
and H & R Block - and I found that Tax Chopper was the best in terms of
calculation and optimization, providing you were not a Quebec resident or a
non-resident. The aspects I tested include:
-
Preparation of multiple
returns for a family together (Tax Chopper is best)
-
Commonly used optimization
(Tax Chopper is best)
-
Capabilities (Quicktax and HR
Block are tied)
-
In search of the best pension
split amount (Tax Chopper is best)
-
Service Guarantee (Quicktax
and TaxChopper are tied)
Only three Online Web
applications were tested. For the rest of the online products, none of them have
any unique features, they are either a copycat (for example, UFile is a clone of
H&R Block), or couldn’t compete at all in any of the areas I tested.
I also wanted to avoid vague
points like ease of use. All three of them are pretty easy to use, people have
different tastes about this. It is up to you to decide which is the easiest.
Only real functions that make
real differences to you are compared.
Aspect 1: Preparing family returns together
|
Quicktax |
Poor
You can only prepare one
return (for a single) or two returns (for a couple). There is no way to add
a third person. So you can’t use it to transfer credits between a child and
a parent, or between siblings.
For couple returns, both
spouses have to be in the same province.
|
|
H & R Block |
Good
You can prepare a number of
returns for a family. Besides the head of the family, you can add
dependants. Credits can be transferred between family members.
However, there are conditions
for dependants. You can’t transfer credits from someone who is not a
dependant as defined by the software.
|
|
TaxChopper |
Excellent
You can add all your family members in one account,
there are no conditions to who can be a family member. Optimization can be done among all family members. |
The winner goes to Tax Chopper
Aspect 2: Optimization:
I used three returns to represent
a couple and their child. One spouse has around $50K income and the other spouse
earns $8000 income. They have a homebuyer amount, home renovation tax credits to
share and I deliberately put the homebuyer amount and $500 public transit amount
under the spouse with the lower income.
Then I added other non-refundable
credits to the one who gets tuition transfer from a child to a point when a
less-than-maximum tuition transfer is needed to reduce tax payable to zero. In
this case, the tuition transfer from child should be reduced. Otherwise, the
child’s future credit is going to be wasted.
Here are the results
|
Quicktax |
Okay
It is able to suggest to me
to let the spouse with the higher income to claim the homebuyer amount and
home renovation tax credits. It fails to suggest that the high-income
spouse should also claim public transit amount for the other so that credit
is wasted.
I need to put the tuition
transfer by myself because a 3rd return is not supported in the
same account.
When I reduce the income, it
fails to tell me I should reduce the tuition transfer from a child so he can
use it in future years.
|
|
H & R Block |
Very Good
Home renovation credits,
homebuyer and public transit credit are all claimed by the spouse with the
higher income automatically. It is great!
When other non-refundable tax
credits are added, the provincial child tuition transfer was reduced but the
federal was not, due to an Ontario LISF calculation bug.
|
|
TaxChopper |
Excellent
A warning message was given
to tell me I should let the spouse with the higher income to claim some of
credits until I move all the credits away from the lower income spouse.
When other non-refundable tax
credits were added, both federal and provincial tuition transfers were
reduced to the exact amount to make the tax payable to zero. |
The winner goes to Tax Chopper
Aspect 3: Capability
|
|
Quick tax |
H & R Block |
Tax Chopper |
|
Supports all provinces |
Yes |
Yes |
Yes |
|
Supports
Quebec provincial return? |
Yes |
Yes |
No |
|
Supports non-resident? |
Yes |
Yes |
No |
|
Supports deceased return? |
Yes |
Yes |
Yes |
|
Supports Emigrant return? |
Yes |
Yes |
Yes |
|
Supports immigrant return? |
Yes |
Yes |
Yes |
The winner goes to both Quicktax
and H&R Block. If you are preparing a return for Quebec resident or a non
resident, you have to use any of these two.
Aspect 4: In search of best pension split amount:
|
Quicktax |
Very good
There is a page you can use
to get the best pension split point. Obviously the software has
test-calculated many points and picked the number with the best refund. The
result is quite good.
However, you need to go to
the pension optimization page to launch the best pension split search, and
if you forget to do it, you lose. This can easily happen if you test try
different scenarios.
Also, if two spouses resided
in different tax provinces, you won’t be able to do the return at all.
|
|
H & R Block |
Good
Some method has been
developed to find the best pension split point. For most cases, the bottom
line difference is within one dollar. But it does give radical numbers in
one of my tests.
|
|
TaxChopper |
Excellent
Some method has been
developed to find the best pension split point. In my test, the numbers it
presents are always the exact best pension split points. And whenever you
forget to put the split amount or the split amount is not the best, you get
a warning message. |
The winner goes to Tax Chopper
Aspect 5: Service guarantee
|
|
Quick tax |
H & R Block |
Tax Chopper |
|
Maximum guarantee |
Yes |
No |
Yes |
|
Accuracy guarantee |
Yes |
No |
Yes |
|
Satisfaction guarantee |
Yes |
No |
Yes |
The winner goes to Quicktax and
Tax Chopper
Conclusion:
My conclusion is that Tax Chopper
is the best if you resided in Canada at the end of the year except for Quebec.
However, I only tested a few scenarios and your tax situation can be different,
so I encourage everybody to shop around and test your numbers using all these
three products. They all let you check your final results without purchasing.
And once you have finished one product, testing the others will be pretty easy.
My tests were performed on
Between April 3rd and April 5th, 2010
Quicktax is a registered
trademark of Intuit Canada.
Tax Chopper is a registered
trademark of CuteTax Inc.
| |
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