Completing a Simple Business Income, Personal Tax Return and Spousal Tax Return Using StudioTax 2013

I recently tested StudioTax 2013 by using it to calculate the returns for a married couple. The one return included a simple business income tax return and the other had an employment income return. Here’s how StudioTax did when completing these two linked returns.

How Did StudioTax 2013 Do With the Test?


Overall I was pleased with the way StudioTax calculated the taxes for the test cases.
StudioTax does not iterate how much each person should claim of any donations. You would have to check this by trying different amounts and checking the change in the tax refunds, if necessary. (Usually one spouse has a significantly higher taxable income: if so, that’s usually the spouse that should claim all the charitable donations.)

StudioTax does not iterate how much of the education amount a student should transfer to their parent, either. I discussed this in another article.

Based on the results I obtained, I would use StudioTax 2013 to complete my tax return. I am used to doing my own taxes and I am comfortable with the forms and what should be reported on each.

What to Watch Out for When Completing Income Tax Returns Using StudioTax 2013

If you do not select that you have dependant children, StudioTax will not prompt you to enter the amounts for the Children’s Fitness and the Children’s Arts tax credits. [Lines 365 and 370 of the Federal Schedule 1.]

The program does not provide any prompting for how to complete a Business Income tax return. While it provides the empty form T2125 and does any mathematics for you, you will have to understand this form and know what to put in which lines and boxes.

The program does not prompt or warn you to be sure to include all investment income properly. For example, I had to remember to add some bank account interest by hand to the federal Schedule 4 (for an account which earned less than $50 so we did not receive a T5.) It does not prompt about safe deposit box fees or about capital gains on unregistered investments. If you know how to file your taxes properly, it is easy to type in the appropriate information on the correct forms. If you don’t, though, you could forget to state all of your income which could be a serious problem with the CRA.

Don’t forget to file your return! Completing the paperwork in StudioTax does not automatically result in you filing your return. Use NETFILE or print and mail your return after you check your work.

How to Use StudioTax 2013 to Calculate the Business Income Tax Return and the Spousal Employment Tax Return

  1. Start StudioTax.
  2. Click on the button: Create a new return.
  3. The StudioTax 2013 Quick Start Wizard opens.
    Read the information, then click the button: Next >

The Screen: Please enter the information about you
Complete the fields with your

  • Full name
  • Social insurance number
  • Date of birth
  • Whether this is your first return, or if not, whether your name has changed since your last return.

Click the button: Next >

The Screen: Personal Information – Address
Complete the fields with your

  • Full address
  • Telephone number
  • The name of the Province or territory where you were resident on December 31, 2013
  • Your home address
  • If you are self-employed, your province or territory or self-employment
  • The date of your move from one province or territory to another if it change din 2013
  • The province or territory you currently live in if it differs from the mailing address

Click the button: Next >

The Screen: Marital Status
Complete the fields

  • Select if you are single, married, living common-law, separated, widowed or divorced
  • Check to link your return to a spouse’s if applicable
  • If applicable, include your spouse’s full name, SIN, date of birth and residential status.

Click the button: Next >

The Screen: Additional Information
If you became or ceased to be a resident of Canada in 2013, enter the applicable date.

If you became a resident in 2013, report the required information about your Canadian sourced income and foreign sourced income.

Click the button: Next >

The Screen: Additional Information
[Yes, there are 2 screens with the same title]

If applicable, check to select the following option and enter the date

  • return for a deceased person
  • return for a pre-bankrupt person

For pre-bankruptcy also enter the income after the bankruptcy

Click the button: Next >

The Screen: CRA Questions

  • Select if you wish to correspond with the CRA in English or French.
    [There’s no option for stating you don’t want to correspond with them. Rats.]
  • Select if you wish to apply for the GST/HST credits.
  • Select if you owned or held foreign property in 2013 with a total cost of more than $100 000 CAD. NOTE: This does not include shares, ETFs or mutual funds held within a RRSP, but it does include them if they are held in a non-registered trading account.

Click the button: Next >

The Screen: Elections Canada
Select if you are a Canadian citizen.

If yes, select if the CRA can give your personal information to Elections Canada to include you on the voter’s list, the National Register of Electors.

Click the button: Next >

The Screen: Please check the boxes that apply to you
To make it easier to complete your tax return, you can select a variety of T-slips and RL-slips by name. StudioTax will then include those forms on the list on the left-side of the screen for quick access. You can also add a form at any time by using the Forms button at the top of your StudioTax screen.

For my test file, I selected

  • T3
  • T5

To select a form you must double click on the check box.

Click the button: Next >

The Screen: Please check the boxes that apply to you
[Yes, this is another screen with the same name.]

If any of the following are applicable to your tax return, click to select the box

  • RRSP/HBP/LLP to claim contributions or make repayments
  • Tuition
  • Donations
  • Dependants
  • Political contributions
  • Medical expenses

None of these was applicable to my test file.

The Screen: Please enter the T3 Slip amounts
For each T3 slip that you have received, complete each of the applicable empty fields in one vertical column. If you have another slip, start a new vertical column. To see more blank columns, click on the horizontal scroll arrow head above the column name, e.g. above T3(2).

Click the button: Next >

The Screen: Please enter the T5 Slip amounts
For each T5 slip that you have received, complete each of the applicable empty fields in one vertical column. If you have another slip, start a new vertical column. To see more blank columns, click on the horizontal scroll arrow head above the column name, e.g. above T5(2).

Click the button: Next >

The Screen: More Federal Tax Information
If applicable, enter the values for

  • The Home buyers’ amount
  • Public transit passes amount
  • Interest paid on your student loans
  • If you are claiming the disability amount for yourself

Click the button: Next >

The Screen: Provincial Credits
Read the information about the ON-BEN form and available credits.

Click the button: Next >

The Screen: Instructions to complete a linked return
Read the information and NOTE THAT YOU MUST NETFILE 2 RETURNS!

Click the button: Next >

The Screen: Please enter the information about you
Complete the fields with your spouse’s

  • Full name
  • Social insurance number
  • Date of birth
  • Whether this is your first return, or if not, whether your name has changed since your last return.

Click the button: Next >

The Screen: Personal Information – Address
Complete the fields with your spouse’s

  • Full address
  • Telephone number
  • The name of the Province or territory where your spouse was resident on December 31, 2013
  • Your spouse’s home address
  • If you spouse is self-employed, your spouse’s province or territory or self-employment
  • The date of your spouse’s move from one province or territory to another if it changed in 2013
  • The province or territory your spouse currently lives in if it differs from the mailing address

Click the button: Next >

The Screen: Marital Status
Check your full name, SIN, date of birth and residential status are correct.

Click the button: Next >

The Screen: Additional Information

If your spouse became or ceased to be a resident of Canada in 2013, enter the applicable date.

If your spouse became a resident in 2013, report the required information about your Canadian sourced income and foreign sourced income.

Click the button: Next >

The Screen: Additional Information
[Yes, there are 2 screens with the same title]

If applicable, check to select the following option and enter the date

  • return for a deceased person
  • return for a pre-bankrupt person

For pre-bankruptcy also enter the income after the bankruptcy

Click the button: Next >

The Screen: CRA Questions
Select if your spouse wishes to correspond with the CRA in English or French.

Select if your spouse wishes to apply for the GST/HST credits.

Select if your spouse owned or held foreign property in 2013 with a total cost of more than $100 000 CAD. NOTE: This does not include shares, ETFs or mutual funds held within a RRSP, but it does include them if they are held in a non-registered trading account.

Click the button: Next >

The Screen: Elections Canada
Select if your spouse is a Canadian citizen.

If yes, select if the CRA can give your spouse’s personal information to Elections Canada to include you on the voter’s list, the National Register of Electors.

Click the button: Next >

The Screen: Please check the boxes that apply to you
To make it easier to complete your spouse’s tax return, you can select a variety of T-slips and RL-slips by name. StudioTax will then include those forms on the list on the left-side of the screen for quick access. You can also add a form at any time by using the Forms button at the top of your StudioTax screen.

For my test file, I selected

  • T4
  • T3
  • T5

To select a form you must double click on the check box.

Click the button: Next >

The Screen: Please check the boxes that apply to you
[Yes, this is another screen with the same name.]

If any of the following are applicable to your tax return, click to select the box

  • RRSP/HBP/LLP to claim contributions or make repayments
  • Tuition
  • Donations
  • Dependants
  • Political contributions
  • Medical expenses

I selected RRSP and Donations for my spouse’s test file.

The Screen: Please enter the T3 Slip amounts
For each T3 slip that your spouse has received, complete each of the applicable empty fields in one vertical column. If you have another slip, start a new vertical column. To see more blank columns, click on the horizontal scroll arrow head above the column name, e.g. above T3(2).

Click the button: Next >

For the Screen: Please enter the T4 Slip amounts
For each T4 slip that your spouse has received, (you get one per job), complete each of the applicable empty fields in one vertical column. If your spouse has another slip, start a new vertical column. To see more blank columns, click on the horizontal scroll arrow head above the column name, e.g. above T3(2).

Click the button: Next >

The Screen: Please enter the T5 Slip amounts
For each T5 slip that your spouse has received, complete each of the applicable empty fields in one vertical column. If you spouse has another slip, start a new vertical column. To see more blank columns, click on the horizontal scroll arrow head above the column name, e.g. above T5(2).

Click the button: Next >

The Screen: RRSP Contributions
From your most recent notice of assessment, find and enter

  • Your RRSP deduction limit, line A
  • Your PRPP contributions, line 205
  • Your unused RRSP contributions available for 2013, line B or T1028

From your receipts from your financial institutions, find and enter

  • Your RRSP contributions (personal and spousal) made from March 2-December 31 2013
  • And from January 1-March 3 2013

If you want to deduct all of these contributions on your 2013 return, click on the Maximize RRSP claim box, if not, enter the amount you want to deduct in 2013. (NOTE: You MUST report all of your RRSP contributions in the taxation year they are made. You can choose whether to claim the deduction that year or whether to carry it forward and claim it in a future year but you must report all of the contributions immediately.)

If any transfers were made, report them. (Usually transfers result from divorce or death.)

Report the amount of HBP you are repaying, if any, and the required minimum HBP repayment.

Report the amount of LLP you are repaying, if any, and the required minimum LLP repayment.

Click the button: Next >

The Screen: Please provide the charitable donations or gifts
Check the amount from T slips is correct.

If you reported any donations in 2012 but did not claim them, type in the amount.
Type in the amount of any donations made in 2013. NOTE you must have a charitable contribution receipt to make a claim.

Type in the amount you want to carry forward to next year, if any.

Type in the amount you want to transfer to your spouse’s return, if any.

(Unfortunately, it does not appear that StudioTax is setup to iterate the best amount to claim on each spouse’s return. However, you can use this field to test various results.)

Click the button: Next >

The Screen: More Federal Tax Information
If applicable, enter the values for your spouse for

  • The Home buyers’ amount
  • Public transit passes amount
  • Interest paid on your spouse’s student loans
  • If your spouse is claiming the disability amount for him/herself

Click the button: Next >

The Screen: Provincial Credits
Read the information about the ON-BEN form and available credits.

Click the button: Next >

The Screen: End of Quick Start
Read the information.

Take note that you MUST submit TWO, 2, NETFILE returns one for each spouse.

Click the button: Finish

What Happens Now?
The spouse’s tax return opens waiting to be reviewed, corrected, added to, and completed.

What’s Still Missing?
I have yet to input

  • The details for the business income tax return
  • The details of interest and investment income and capital gains which were not reported on T3 and T5 slips for myself and my spouse.
  • The number of children being claimed.
  • The details of the children’s fitness and art credits.

To Complete the Test Return for My Spouse

I needed to add more investment income.

To do so, I looked for the Federal form Schedule 4 on the list in the box Forms on the left side of the screen. I clicked on the link Schedule 4.

In Part II Interest and other investment income, I typed in the values for the additional income on a new line.

In Part III Carrying charges and interest expenses, I typed in the value for our safe deposit box rental for the final year. (This deduction will vanish from the 2014 tax returns.)

I needed to add more capital gains information.

To do so, I looked for the Federal form Schedule 3 on the list in the box Forms on the left side of the screen. I clicked on the link Schedule 3.

I completed the required fields in Part 3. Publicly traded shares, mutual fund units, deferral of eligible small business corporation shares, and other shares.

I needed to add the number of children being claimed and the children’s fitness tax credit amounts.

To do so, I looked for the Federal form Schedule 1 on my list in the box Forms on the left side of the screen. I clicked on the link Schedule 1.

In the Amount for children born in 1996 or later section, I clicked to select the Override box. In the number of children for whom you are not claiming the family caregiver amount, I typed the number of children we are raising.

In the Children’s Fitness Amount section, I clicked to select the Override box. Then I typed in the amount of the fitness amount we are claiming.

How to Add a T2125 Business or Professional Activities Form to a StudioTax File

I needed to add the test business income tax return to my return.

To do so, I clicked on my name under the Tax Returns heading in the box at the top of the left side of the screen.

To add a Statement of Business or Professional Activities T2125 form, I clicked on the Forms icon in the top navigation bar of the program.

From the Federal Forms box at the left under the Available Forms section, I clicked on T2125(1) Business Activities, then clicked on the arrow pointing downwards at the box Added Forms, Federal Forms. [Note: the forms are not listed in alphabetical or numerical order. Scroll down until you find the form you need.]

I then clicked the button: OK

The T2125 form opened.

On the first page of the form, I typed in

  • My name
  • Social insurance number
  • Account number (this is your federal business number)
  • Business address
  • Fiscal period
  • Main product and service
  • And industry code.

IN THE NEW SECTION
I typed in

  • The number of websites my business earns income from.
  • The urls for my websites.
  • The percentage of my gross business income that comes from these websites.

In the following sections, I input my business income, expenses and CCA.

I also updated the Federal Schedules 4 and 3 as I did for my spouse’s test return.

Review Your Federal Forms and Provincial Forms In Detail

Never submit your income tax forms without carefully reviewing the details! You may be entitled to credits that were overlooked or input incorrectly. You may also have forgotten to report some income or input it incorrectly, which is far worse as you could end up being audited or paying a penalty on top of the tax you owe!

I reviewed our test files very carefully and found no mistakes. (In fact I found a slight improvement over my expectation because I had made a slight arithmetic error when calculating the credit for charitable donations.)

Save Your StudioTax 2013 Income Tax Files

To save your completed and reviewed files, click on the Save icon in the top navigation bar.

In the Save As box, when the destination is appropriate, click on the Save button.

To close StudioTax, click on the X. Read the warning message about filing your taxes, then click on the OK button.

Next Step: You Must FILE Your Income Tax Return

Remember, you have not actually filed your income taxes yet! You have just used a program to estimate your taxes owing or your refund. You must now NETFILE your return, or print a paper copy, include the appropriate tax slips, and mail your return to the correct address.

You must also pay your taxes owing, if any, before the deadline. Usually the deadline is midnight on April 30. It may be extended because of the shutdown of the NETFILE system but personally I would still pay by April 30 to be sure that no penalty is incurred!


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