Using Free GenuTax Standard 2012 for a Simple Business Income T2125 and Personal Tax Return

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First I downloaded and installed GenuTax Standard 2012 to my Windows PC. Next I calculated a typical personal income tax return for a married person with two children and a spouse who was not receiving any employment income. It seemed to go well, and the results matched what I calculated using a pencil and paper. Next, I decided to test GenuTax Standard with a simple business income, T2125, and personal tax return. Here’s what I found out:

UPDATE: I hope to review GenuTax 2013 once it is approved by the CRA sometime in February or March 2014. For now, you may wish to read this review of the 2013 software to get an idea of how the program works.

Testing GenuTax Standard 2012 with a Basic Small Business Tax Return

This test case is very simple. The person runs a not very profitable small business. Their product is documents delivered electronically, so there is no inventory or stock. The person is paid, claims some expenses for office stationary, some capital cost allowance on capital items that have already been partially depreciated, some advertising expenses, and some professional management dues. It’s a very, very simple return. (I’m not qualified to test the program for a complex return, unfortunately. I think either a business owner with lots of personal tax filing experience or a tax accountant would have to do that type of review.) Before describing in detail how I entered the data and how the program responded, I will report on the items most likely of interest to readers. Then I’ll provide the details.

How Did GenuTax Do On the Test Case?

GenuTax Standard 2012 calculated the same tax return that I did for the business and personal income.

GenuTax Standard 2012 differs and is better than StudioTax 2012 because it asks “Did you receive any interest and other investment income for which you did not receive an information slip?” Without that prompt I may have forgotten to report my income under $50 from bank interest.

It did not “notice” that I could claim slightly more in the Ontario children’s activity credit than I thought, like StudioTax did. It prompted me to type in the answer for the claim, rather than calculating it from the Federal credits.

It was a bit confusing when GenuTax asked if I had any capital gains or losses to report. I didn’t know if it meant in addition to those I had reported from T3 slips or not. I selected that NO. It turns out that it did properly calculate my capital gains and losses using the information from the T3 slips.

Another negative quirk: When I reached the “Type the best industry code for your business” prompt I tried to type 519100 for Other Information Services, based on the CRA website. But GenuTax gave an error message. The nearest I could select was 519110 which does not exist on the CRA site! I will report this to GenuTax.

One drawback is that it is not easy to review your tax return without printing it out. I would prefer to be able to review my return on screen to save ink.

How Long Does It Take to do Your Taxes Using GenuTax Standard 2012?

It took about one hour and a half to fill in the taxes for a self-employed person with business income and a T3, 4 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 GenuTax Standard 2012 Best For?

If someone is not sure how to do their taxes and wants to be interviewed by a series of questions to enter the correct information, GenuTax Standard is a good choice. It also has a faster mode for those who have done their own taxes before and want to skip steps.

GenuTax handled all the math nicely behind the scenes.

What’s the Best Way to Use GenuTax Standard?

You’ll need all of your T forms and small business information nearby before you begin. Always compare this year’s return to last year’s looking for things that you missed.

How accurate is GenuTax Standard?

I can only give my opinion. I’m not a tax accountant nor do I work for the Canada Revenue Agency. I did a set of taxes by hand first using a pencil and a calculator. Then I did them again using GenuTax Standard 2012. The answers were identical. So it seems good to me! Now back to the details:

How to Use GenuTax Standard 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 GenuTax Standard icon. Click to select the Create a New Taxpayer file button, then click the OK button. In the Taxpayer Information form, type in the correct information for:

  • Social insurance number
  • First name
  • Middle name(s)
  • Last name
  • Date of Birth

And Click to select Male or Female Then click on the OK button. The system will prompt you to Save Taxpayer File with a filename of the First and Last name. If the name of the file and the location for the saved file are acceptable, click the Save button. From the Create Tax Return list, click the appropriate year. For example, select 2012. Click the OK button. The Tax Interview part of the program will begin.

Completing the Tax Interview for Calculating your 2012 Business Income and Personal Taxes Using GenuTax Standard

If you want to read more information about the interview, select the Yes button, then click on the Next tab at the bottom of the screen. There are 2 ways to use the program. One asks many questions to ensure you capture all of your deductions. The other way is for experienced tax filers who already know exactly what they want to input. This review will use the Comprehensive Interview. I want to see if it identifies any new deductions or fails to prompt me for any that I already know about. On theType of Interview screen, select Comprehensive Interview and click on the Next tab. From the drop-down list select your Marital Status on December 31, 2012. Click Next. Select Yes or No for whether

  • your martial status changed in 2012.
  • you were dependent on your spouse to an impairment.
  • you were ever not with your spouse in 2012.
  • you had a medical separation in 2012.

Click Next after each selection. Click on the Prepare Returns Together box if you want to prepare returns to share credits to maximize their value. I did not select this option. Click Next. Select Yes or No for whether you were a resident of Canada. Click Next. From the drop-down list, select where you were resident in Canada at the end of the year. Click Next. If you moved within provinces or territories, state the date of your move. Click Next. Select Yes or No for whether your mailing address is your residential address. Click next. From the drop-down list, select where you currently are resident. Click Next. Select Yes or No for whether

  • you entered Canada during 2012 as a new resident. Click Next.
  • you were deemed non-resident in 2012. Click Next.

Type your Spouse or Partner’s

  • Social Insurance Number
  • First Name
  • Last Name
  • Date of Birth

Click Next. Enter your Spouse or Partner’s net income from line 236 of their return. Click Next. (Note: unlike StudioTax it does not advise whether you can enter an estimate.) Select Yes or No for whether your Spouse or Partner

  • reported any registered disability income. Click Next.
  • repaid any registered disability income. Click Next.
  • reported any capital gains from mortgage foreclosures and conditional sales repossessions. Click Next.
  • is filing a form RC310. Click Next.
  • was self-employed. Click Next.
  • was a resident of Canada. Click Next.
  • was in prison. Click Next.
  • died in 2012. Click Next.

Review your personal information. If you need to change it, click the Change Personal Information button. If it is correct click Next. Select Yes or No for whether

  • you are a member of a communal organization. Click Next.
  • this return is being completed by a volunteer on your behalf. Click Next.

Select whether you prefer to deal in English or French with the CRA. Click Next. Select whether your mailing address is in Canada, the USA or another country. Click Next. Type in your mailing address and click Next. (A warning message tells you how to change your address with CRA.) Click Next. Type in your home telephone number, if desired. Click Next. Select Yes or No for whether

  • the taxpayer is deceased. Click Next.
  • you are a Canadian citizen. Click Next.
  • the CRA can give your information to Elections Canada. Click Next.
  • you were in prison in 2012. Click Next.
  • you declared bankruptcy in 2012. Click Next.
  • you have any dependents not including a spouse or partner. Click Next.

On the Dependent Information screen, enter

  • First Name
  • Last Name
  • Date of Birth
  • Social Insurance Number, if applicable

From the drop-down list, select your Relationship. Click Next. Enter the Dependent’s Net Income and click Next. Select whether the Dependent lived with you at any time in 2012 and at the end of 2012. Click Next. Select Yes or No for whether the dependent

  • lives at your address. Click Next.
  • has an impairment. Click Next.
  • has a spouse or partner. Click Next.
  • has children. Click Next.
  • has unused tuition, education or textbook amounts. Click Next.

Select whether you have any additional dependents. Click Next. Read the details about the Amount for Children born in 1995 or later and select how many children are applicable. Click Next. Select which spouse or partner will be claiming the children. Click Next. Enter your RRSP Deduction Limit for 2012 from your Notice of Assessment. Click Next. Select Yes or No for whether you

  • have unused RRSP contributions. Click Next.
  • made an RRSP contribution in the first 60 days of 2012 for specific conditions. Click Next.
  • need to make a HBP repayment. Click Next.
  • need to make a LLP repayment. Click Next.

Completing the Income Section Select Yes or No for whether you have any T4, T4A, T4PS or T5 slips. Click Next. For each type of form, if you have it, click the button for it. A typical form with empty boxes on it is displayed. Type the numbers from your form in the same boxes. If you have two or more of the same type of form, click the Add a New Slip button. Repeat. Then click the Close button. Click Next. Complete this step for each form you have. Select Yes or No for whether you have any Quebec RL Slips. Click Next. Enter any tips you received. Click Next. Select Yes or No for whether you received

  • a research grant. Click Next.
  • a housing allowance for clergy. Click Next.
  • an employee GST/HST rebate. Click Next.

Select Yes or No for whether you

  • filed a Quebec Provincial return. Click Next.
  • have any foreign income. Click Next.
  • have any other employment Income. Click Next.
  • want to make any additional CPP or QPP contributions. Click Next.
  • have any employment income from a major shareholder. Click Next.
  • have any pension income which may be reported on a T4A(OAS), T4A(P), T4A, T4RIF, T4RSP, T3 or T5. Click Next.
  • want to split pension income with a spouse or partner. Click Next.
  • have any UCCB payments. Click Next.
  • have any UCCB repayments. Click Next.

Select Yes or No for whether your spouse had any UCCB payments. Click Next. Select Yes or No for whether your spouse had any UCCB repayments. Click Next. Select Yes or No for whether you received

  • any EI. Click Next.
  • any investment income in 2012. Click Next.

If you have a T3, T5, T5013, T5013A, Quebec RL or other form click the button for the form. A typical form with empty boxes on it is displayed. Type the numbers from your form in the same boxes. If you have two of the same type of form, click the Add a New Slip button. Repeat. Then click the Close button. Click Next. Complete this step for each form you have. Then click the Close button. Click Next. Select Yes or No for whether you received any Dividend Income. Click Next. *** In this respect, GenuTax Standard 2012 is better than StudioTax 2012 because it asks “Did you receive any interest and other investment income for which you did not receive an information slip?”*** Select Yes or No for whether you received

  • any additional investment income. Click Next.

When I accidentally went too far forward I was prompted by the Sources of Interest Income screen to indicate what portion of my interest and investment income was from bank interest, bond interest and mortgage interest. I wanted to go back and report more bank interest. When I clicked the Previous Button, it would not allow me to move back until after I input a false value for the bank interest. After that it let me use the Previous Button and make my corrections. When I arrived at this screen again, I was able to type over my false answer with the correct one.

  • any foreign investment income. Click Next.

Select Yes or No for whether you

  • were in a partnership. Click Next.
  • had rental income. Click Next.
  • had self employment income.

Select Yes. Click Next. Reporting Your Self Employment Business Income Select Yes or No for whether

  • Your business had a permanent establishment outside of Ontario in 2012
  • You  had farming income
  • You had fishing income
  • You had business income not from fishing or farming

Click yes and next. On the Name of Business screen, type the name of your business and click Next. On the Type of Business screen, select

  • Professional
  • Self-employed commission sales; or
  • Other

I had to select OTHER for this example. Click Next. On the Business Address screen, type the correct information for the mailing address. Click Next. Type the dates for your business fiscal period. Click Next. Select Yes or No for whether

  • This was your first year of operation of the business
  • This was your final year of operation of the business

Click Next. Type the best industry code for your business. ***When I tried to type 519100 for Other Information Services, based on the CRA website, it gave an error. The nearest I could select was 519110 which does not exist on the CRA site!*** Click Next. Enter your business account number from Revenue Canada. Click Next. Select Sole Owner or Partnership and click Next. The Business Income Section Enter the amount of income earned and click Next. If applicable, enter the amount of HST etc and click Next. Enter the amount or Returns, Allowances and Discounts, and click Next. Enter the Reserves Deducted Last Year and click Next. Enter the Total Other Income for the business and click Next. Select Yes or No for whether

  • The business buys goods for resale or makes goods for sale

And click Next. The Business Expenses Section Enter the amount for each of the following

  • Advertising
  • Bad Debts
  • Memberships
  • Delivery, Freight
  • Fuel
  • Insurance
  • Interest
  • Maintenance and Repairs
  • Management fees
  • Meals

Click Next. Select Yes or No for whether you

  • Had motor vehicle expenses to claim

Click Next. Enter the amount for each of the following

  • Office expenses
  • Convention expenses
  • Supplies
  • Legal etc fees
  • Property taxes
  • Rent
  • Salaries, etc.
  • Travel
  • Telephone etc.

Click Next. Select Yes or No for whether you Had business use of home expenses. Click Next. On the Other Expenses screen, type in a description and an amount paid for any other expenses. Click next. If you are claiming CCA, select Yes or No and click Next. Enter the CCA Class and click Next. After answering the questions about that asset, if needed select Add details for another CCA class and repeat the procedure. When complete, click there are no further CCA classes to enter and click Next. Select Yes or No for whether you

  • Want to defer claiming some of your CCA credit. Click Next.
  • Bought or sell any land. Click Next.
  • Are claiming an allowance on any eligible capital property. Click Next.

Complete the Details of Equity screen and click Next. Select Yes or No for whether you

  • Filed form T1139

Click Next. If you have any other businesses, select Add Details for Another Business. Otherwise select There are no further businesses to enter, and click Next. Select Yes or No for whether you

  • Had EI premiums on self-employment earnings.

Click Next. Select Yes or No for whether you

  • have any capital gains or losses to report. Click Next.

***I had previously entered some capital gains on T3 slips. Here I selected that NO I did not have any capital gains or losses to report. After the test was complete I checked and GenuTax Standard 2012 did properly calculate my capital gains and losses using the information from the T3 slips.*** Select Yes or No for whether you received

  • any support payments. Click Next.
  • any social assistance or workers’ compensation. Click Next.
  • WTIB. Click Next.

Select Yes or No for whether you

  • have any other income not yet reported. Click Next.
  • had any retroactive lump sum payments. Click Next.
  • held more than 100000 of foreign property. Click Next.
  • are a Status Indian. Click Next.

Completing the Deductions and Credits Section Select Yes or No for the following then click Next

  • SPP contributions
  • RRSP contributions
  • RPP contributions
  • Carry forward of RPP contributions
  • Contributions to foreign pensions
  • Annual union professional dues
  • Disability amount
  • Disability support deduction
  • Moving expenses carry forward
  • Moving expenses
  • Support payments made
  • Carrying charges and interest expenses
  • Exploration and development charges
  • Employment expenses
  • Deferred security option benefits
  • Losses from prior years
  • Northern residents’ deduction
  • Income amounts paid back
  • Legal fees
  • Refund of unused RRSP contributions
  • Excess RPP transfers withdrawn
  • Canadian films
  • Tax treaty exemptions
  • Vow of poverty
  • Employed by International Corporation
  • Prospector
  • Securities from a DPSP
  • Other deductions
  • Do you wish to claim the spouse or partner amount, if applicable?
  • Family caregiver amount
  • Various spousal/partner related claims
  • Firefighter’s amount
  • Children’s Fitness amount
  • Children’s Arts amount
  • Home Buyers’ amount
  • Adoption expenses
  • Tuition, Education, Textbook amounts
  • Tuition fees
  • Student Loans
  • Medical Expenses
  • Donations and Gifts
  • Gift of land
  • Gift of Cultural property
  • Gifts to country
  • Gift of securities
  • Donations of capital property
  • Want to limit gifts for this year?
  • Overseas employment tax credit
  • Minimum tax carryover
  • Carrying charges
  • Foreign tax credit
  • Political contributions
  • Labour-sponsored funds
  • Investment tax credit
  • Tax paid by installments
  • Other Income Tax Deducted
  • WTIB
  • GST.HST Credit
  • Ontario property tax credit
  • Northern Ontario credit
  • Child activity fees
  • Healthy homes
  • Political contributions
  • Balance of tax unpaid
  • Special elections

Phew, you’re done! From the File Menu, select Save. Click Exit. It got the same results that I did using a pencil and paper.

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 GenuTax Standard 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.

Supporting the Development of GenuTax If you liked the product, you can make a donation to support the software. Information is at https://www.genutax.cadonate.

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