Feeling bad about not filing your taxes yet? Don't worry, tax-filing procrastination is a common disease that inflicts most Canadians 😉
Lucky for you, filing online is easy and reliable. This is true whether you’re self-employed, new to Canada, or have a side-gig.
To prove this, last month I hosted a “tax-party” at KOHO where employees filed their taxes at the office using TurboTax. We were all done (and luckily had money from the CRA en route to our KOHO accounts) within 2 hours. 95% of the crowd found the process way easier than expected.
So, why is TurboTax is so great? It’s threefold:
It’s affordable - The price ranges from $16-$47, which is way cheaper than an accountant (P.S. through KOHO's offer you get a 20% discount). You don’t actually pay until the very last step when you officially file, so try it out for free if you want!
It’s super simple - The software is laid out “interview style,” meaning you’re guided through a series of questions. Your answers will prompt you to put in all the relevant information that applies to you.
There's great online support - Any tax question you could possibly have can be found (or asked) on AnswerXchange. It’s the Q&A for the TurboTax community, which is monitored and verified by tax experts. It's the best tax forum I've seen.
You don’t have to do it in all in one shot. You can leave, come back, and review as many times as you want before finally submitting. Turbotax also guarantees accuracy and a maximum refund.
So, what's the process like?
You’ll go to Turbotax.ca and select the product that suits your situation.
Here are the options:
Standard - costs $15.99 and is best for salaried employees. If you receive a T4 from your employer, that's you. Standard will run you through all of the usual tax deductions such as medical expenses, childcare, and tuition costs.
Premier - costs $31.99 and is best for anyone with unconventional forms of income such as rental income and non-registered or overseas investments. While you can use Standard, Premier will take the extra step to make sure you capture this information properly.
Self-Employed - costs $47.99 and is best for any self-employed individual who is not incorporated. If you have side-gig income you can use Standard, but if you're not particularly comfortable with accounting this is probably your best bet. I liked that Self-Employed asked me about my side-gig in layman’s terms. Since taxes can have a big impact on the take-home pay of sole proprietors, you may want to splurge on an “Assist & Review” ($50 extra) where a tax expert reviews your file over the phone.
Once you choose your software, the process is generally the same. You simply answer questions about yourself and input data when necessary. Like a plinko-board, the way you answer questions leads to the next question set you see. It will capture all relevant deductions and tax credits, with any info you previously filed being auto-populated.
Examples of a few questions you'll be asked:
"Did you pay for daycare or for someone to look after your child in 2018 so you could earn income, go to school, or conduct research?"
"Check the box if you have self-employed income and expenses to report."
After answering all the questions and reviewing your info, you’ll see your return (hopefully you get money back!). You'll be prompted to sign up for or log into your My CRA account and seamlessly file your taxes using Netfile. Then, that’s it! You’ll be contacted by the CRA when your Notice of Assessment is ready.
Really, truly, the software does all the hard work. The best thing to do is to give it a try and get a feel for the process first-hand.
What do you need to prepare?
Check out the major sections of a tax return, which indicate the information you need on-hand.
Another nifty tool is their income tax calculator, which will help you estimate tax you must pay. It can be especially helpful if you're self-employed.
If you're still not sold or have other questions about taxes, check out my other tax articles, or reach out by starting a chat and typing #coach.
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