First, I downloaded and installed StudioTax 2012 to my Windows PC. I tested it by completing a typical personal income tax return for a married person with two children and a spouse who was not receiving any employment income. The result was good and the same number as I calculated with a pencil, paper and a calculator. This report is for a test of the StudioTax software, which is free to use regardless of your income level, for reporting business income from a simple sole proprietorship combined with a personal tax return for 2012. This is what I learned:
UPDATE: I will be testing the StudioTax 2013 program in February or March of 2014. In the meantime, you may want to look at these results for the 2012 taxation year.
Testing StudioTax 2012 with a Basic Small Business Tax Return
I kept this test case very simple. The owner runs a small, not very profitable, writing business. Their product is written documents delivered by email attachment, so there is no inventory or stock of saleable goods. The business owner has office stationary expenses, and some CCA for capital items that are still being depreciated after several years. The owner pays some advertising costs and some professional management fees. This makes for a very simple business income return.
Personally, I don’t feel qualified to test a more complex return. I am not a tax accountant, nor do I have experience filing complex business or professional income returns.
Before I describe the line-by-line details of entering the data into StudioTax, I will quickly report on the high interest results.
How Did StudioTax Do On the Test Case?
StudioTax 2012 calculated the same results for the tax return that I did for both the business and personal income tax.
One nice feature of StudioTax is that it is easy to review any of the tax forms that make up your tax return without printing them out. This allows me to review my return on screen to save ink. (GenuTax Standard did not offer this feature where I could find it easily.)
StudioTax 2012 does not prompt you to enter any additional interest and investment income for which you did not receive a T slip. You have to be careful not to forget to report all of your investment income. (GenuTax Standard prompts you to enter any interest and other investment income for which you did not receive an information slip.)
How Long Does It Take to do Your Taxes Using StudioTax 2012?
It took about one hour to fill in the taxes for a self-employed person with business income and some T5s, some additional interest income, and a spouse with an income who got to report the children and their credits. (No child support; no business income; no medical expenses)
That includes some time to check a few things before typing them in and to read over the final tax report.
Who is StudioTax 2012 Best For?
StudioTax is not something I would recommend for someone who is not sure how to do their taxes and who wants to be interviewed by a series of questions to enter the correct information. (Try GenuTax Standard for that format.) StudioTax is good for someone who is used to doing their taxes long hand with a pencil and calculator and who knows to look for certain forms and fill them out.
StudioTax handled all the mathematics nicely in the background.
What’s the Best Way to Use StudioTax?
You’ll need all of your business information and T forms handy before you begin. You can save and close the return part way through, though, if you need to go hunt for a receipt.
Caution for any Tax Software Program
Always compare this year’s return to last year’s looking for things that you missed!
How accurate is StudioTax?
I can only give my opinion. I’m not a tax accountant nor do I work for the Canada Revenue Agency. For this test, I did the taxes first on paper forms using a pencil and a calculator. Then I did them again using StudioTax. The answers were identical. So it seems okay to me!
Now back to the details:
How to Use StudioTax 2012 to Calculate a Business Income and Personal Tax Return for Canadian Income Taxes and NETFILE Online for Free by April 30, 2013
Since the software is already downloaded and installed, double click on the StudioTax 2012 icon.
Click on the Create a New Return Button.
The Quick Start Wizard will open. It helps you enter basic tax information. Data is saved as it is entered. You can exit at any time by clicking on Cancel.
Type your: Title, First Name, Last Name and Initial in the appropriate fields.
Select whether this is your first return, whether your name has changed since your last return, or whether neither applies.
Type in your Social Insurance Number and your Date of Birth.
Click on the Next button.
Type in your address and telephone number/s.
Select your province or territory of residence on December 31, 2012.
If you moved in 2012, enter the date.
Select whether your mailing address is the same as your home address.
Select the province of self employment.
Click on the Next button.
Select your marital status.
If you select Married, it asks if you want to link your return with your spouse’s return. I selected No. (You can change this later.)
If you have spouse, enter the spouse’s name, SIN and date of birth.
Click on the Next button.
Enter the spouse’s net income. You can use an approximate net income for your spouse and correct it later.
Type the spouse’s UCCB or UCCB repayment and RDSP or RDSP repayment, if applicable.
Select whether your spouse was self-employed in 2012.
Click on the Next button.
If applicable, click and type the information if you ceased to be resident; are filing a return for a deceased person; are filing a pre-bankrupt return. Click on the Next button.
Select correspondence in French or English.
Select whether or not to apply for the GST/HST credit.
Select whether you owned or held foreign property worth more than $100 000 CDN in 2012. (Note: foreign holdings in RRSPs do not have to be reported here.)
Click on the Next button.
Select whether you are a Canadian citizen and if you want your information provided to the National Register of Electors.
Click on the Next button.
The Wizard gives a list of T and RL forms you may have received. You check the boxes beside them so it will prompt you with relevant questions. For example, I selected T5. You have to click TWICE to select a checkbox. I did not check any RL forms.
Check any of the following you wish to report:
- RRSP/HBP/LPP contributions or repayments
- Tuition fees
- Donations
- Dependents
- Political contributions
- Medical expenses
(I did not select any of these for this test.)
Click on the Next button.
It will ask you to type in the information on your T slips. If you have two or more slips of the same type, click on the tab for the second, third etc T slip of that type at the top of the screen. For example, it will have tabs for T5(1) and T5(2).
When you have entered all the information for one type of slip, click on the Next button.
If applicable, type your amount for the Home Buyers’ amount deduction; the public transit passes amount; and the interest paid on student loans.
Click on the Next button.
It will provide some guidance on claiming for
- Rent paid in Ontario
- Property tax paid in Ontario
- Home energy costs
- Accommodation in a public long term care home in Ontario
- Student residence costs
Click on the Next button.
Click Finish to end the Wizard.
Next you have to start entering the rest of the data by selecting the appropriate forms and typing in your numbers.
This is why StudioTax is not well suited to people who do not already know how to complete their tax forms.
For example, I next opened Schedule 4 Statement of Investment Income to type in the amounts of interest I received on investments and bank accounts which were smaller than $50 for which I did not receive T slips.
To Add a Form or Schedule to the Ones Listed on the Left Side of the Screen for StudioTax 2012
- Click on the Forms icon along the top of the screen.
- From the lists displayed, click to select the Form you want.
- Click on the downwards pointing arrow to move it to the list of Added Forms at the bottom of the window.
- Click on the OK button.
- The Schedule or Form will now be displayed on the list on the left hand side of the screen.
- Click on it to open it and type in the data.
When you have completed typing in the data for all of your forms, click on the Save button at the top of the screen.
WARNING: Although you have now completed your tax return, you have not yet sent it in to the Canada Revenue Agency! You must either print it and mail it in, or NETFILE it.
Even more importantly, if you owe money you MUST pay it before April 30, 2013, or the government will start charging interest on May 1 and may also charge a penalty. If you need a remittance form to fill in and take to the bank to pay your taxes you can print one from the CRA website at http://www.netfile.gc.ca/fq_rfnd-eng.html#balance_owing.
Click this link for instructions on how to submit your return to the CRA by NETFILE for free using StudioTax 2012.
The CRA website has information about how to pay at
http://www.netfile.gc.ca/fq_rfnd-eng.html#balance_owing
with links to various payment tools.
Conclusion
StudioTax seems to do an acceptable job of completing a tax return ready to NETFILE. If you already know how to do your taxes and just want a program to do the math and to permit you to NETFILE, this one is well worth checking out.
Supporting the Development of StudioTax
Please consider making a donation to Bhok It Software if you like the product so that they can keep offering this product.
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