The deadline (midnight of May 2, 2005) for fixing the tax return for 2004 is only a few weeks away. We will examine the various options to file taxes:
Pen and Paper:
A surprising number of people still file paper returns (about 50% according to the Canada Revenue Agency). The forms can be downloaded from the CRA website or obtained in printed form in many ways. While filing a paper return is free, it is also error-prone and tax refunds take about 3-6 weeks.
A number of commercial tax software packages are available to assist in tax preparation. An error-free tax return can be generated fairly quickly. Many people still print out their returns with the software, but NETFILE is the best option. Refunds usually take only one week.
The biggest sellers are QuickTax, TaxWiz and UFile. Since tax software is a sticky application (most people like to download the previous year’s return), a lot of people just buy the software they bought the previous year. I think that TaxWiz is the best value in tax software and the download version is the cheapest.
Some vendors provide web-based applications for filing returns. These applications tend to be cheaper than retail software for single returns. However, tax data is being stored in remote servers and if data security is a concern, this method of filing is best avoided.
For complicated tax returns, it might be worthwhile to consider professional help from tax preparers like H&R Block. Another option is hiring a professional accountant, who can prepare taxes and also suggest tax-saving strategies and may easily be worth their fee.