Review and Ratings of Web Tax Software for NETFILE

Which is the best web-based income tax preparation software for Canadians? Below is my assessment based on four factors:

• Security & Privacy, i.e. how well is your data and privacy protected
  
• Flow, Readability, Layout aka user ease of use and friendliness
• Help, or how much and how good is it
  
• Responsiveness or speed of operation

I was going to rate the various packages on accuracy but did not include accuracy considerations in my ratings since I am not absolutely sure which package results are accurate and which not. As noted below, CRA is doing some testing. All packages have received the Canada Revenue Agency's NETFILE certification.

The winner by a good margin is UFile, which combines superb help, easy navigation, thoroughness and speedy operation with reasonable privacy and security. And I believe it provides the correct calculation of taxes, unlike some of the other packages. At $15.95 for one return, UFile isn't the cheapest but is good value for money.

Honourable mention goes to three packages tied in second place: H&R Block, TaxChopper (formerly named CuteTax) and WebTax4U. H&R Block is a clone of UFile re-branded in different colours but with additional license conditions that I consider unwelcome. HRB's license gives it permission to bombard a user with marketing offerings, not just from itself but also from its 3rd party partners. HRB also shares data with its US parent, possibly resulting in data ending up in US government hands.

TaxChopper(CuteTax) and WebTax4U are best on privacy and security and have a flow and readability I found generally easy to use, though they offer significantly less help. I have serious doubts about the accuracy of the tax calculation result of both programs. CuteTax says I have the lowest amount owing amongst all the packages, so maybe I should file through them and see how it flies at CRA ;-)

QuickTax Standard is a good package - you will be certain not to leave anything out - but it drove me nuts with its laborious one question at a time interview process combined with sluggish processing performance. It took me twice as long to complete my return with QT than any other package. QT is the package for the ultimate tax dummy, in the nice sense of the word, like the Dummy series books. QT also suffers from its constant pushing of other products in the corporate stable and the license allows for such marketing, including disclosure to 3rd parties. Opting out is possible but isn't a convenient process. The use of QT may also result in your data ending up in the USA and exposure to US laws.

The packages below that in my rankings all are characterized by much more limited help and not quite as slick or intuitive or well explained user interfaces. I found myself clicking and scrolling back and forth too much, even though I knew exactly what I needed to do ... after the third or fourth entry of the same data, it should go more smoothly, right? Perhaps if you have a very straightforward return and know how the tax forms work inside out, they may be ok. Only one of these lower rated packages produced the same bottom line tax owing as the #1 package UFile and market leader Quicktax, which I guess are most likely to pan out as correct in the CRA testing. That was FileTaxOnline.

Detailed Ratings and Comments
#1 - UFile

#2 (tied) - H & R Block

#2 (tied) - TaxChopper (CuteTax)

#2 (tied) - WebTax4U

#5 - QuickTax (Standard)

#6 - AceTax

#7 (tied) - MBO Tax



#7 (tied) eTaxCanada

#9 - EachTax

#10 - FileTaxOnline

#11 - Taxnic.ca

The Bottom Line Question of Accuracy
As I mentioned in my previous post Caution about Web Tax software, the different packages produced a wide range of taxes owing using the same input. I know I entered all the data because in every single package line 150 Total Income was identical. In every package but one - CuteTax which had a deduction at line 232 that none of the others did - they all had the same Net Income line 236 as well.

The problem lies in the tax credit parts of the return. Several packages calculated no line 479 credits - eTax Canada and EachTax. Others failed to give credits for Foreign Tax paid - WebTax4U and probably AceTax (I couldn't tell for sure since you don't see al the numbers till you pay and I'm too cheap to pay just to do a review).

CRA was concerned when they heard what I had found and is now testing the packages to try replicating this. So stay tuned, when they get back to me I'll pass along what CRA says.

Prices and Possible Free Return Preparation - Wikipedia has a great list of all the packages together at Canadian Tax Preparation Software for Personal Use.