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    Software can help your approaching taxing times

    by  Alan Zisman (c) 2006 First published in Business in Vancouver April 4-10, 2006; issue 858

    High Tech Office column

    Ah spring: daffodils, cherry blossoms. And tax time.

    In 2004, it was reported that with half of all Canadians preparing their own returns, for the first time over half were using tax software, and an increasing number are using online software. Electronic filing is increasingly common. It grew by 16 per cent between 2004 and 2005, according to the Canada Revenue Agency (CRA). Software-enabled e-filing speeds both the time it takes to file returns and receive refunds.

    However, if you’re among the half who prepare their own returns, you might be feeling uneasy.

    According to a recent Decima Research poll sponsored by Montreal-based DR Tax Software, 28 per cent feel as if they’ve likely shortchanged themselves by missing a writeoff or exemption, perhaps because they’re rushing to meet the April 30 deadline. (Forty-seven per cent report putting off filing until April).

    B.C. residents lead the country in the percentage who miss a writeoff or exemption.

    Dr Tax has been providing Canadian tax software for over 15 years and now offers UFile for Windows ($20) and online ($15; free for students and people earning under $25,000).

    The software features a QuikClik on-screen interview process and MaxBack refund maximizer. The boxed version can be used for up to 10 returns. Most competing consumer tax products limit purchasers to six. When used for an entire family’s tax returns, the MaxBack analysis feature of both the boxed and online versions tries to optimize returns across the family. The online version charges for each spouse’s return; additional family members, however, are done for free.

    This year’s boxed product offers improved help functions that ask the user “what would you like to do” at each stage in the tax “interview.”

    As well, users can send questions to an online support team or walk through an updated tutorial. Aiming to gain customers from competitors like Intuit’s QuickTax, UFile can carry over returns created in previous years with other tax software.

    B.C. residents are the most likely in the country to use tax strategies to reduce their taxes: 46 per cent polled claim to “always” use tax strategies compared with 34 per cent of Albertans and 35 per cent of Canadians overall.

    If they’re entitled to a refund, 33 per cent of B.C. residents polled said they would use it to pay down debt, 26 per cent would invest it, while a mere five per cent would put it towards a vacation. In contrast, 14 per cent of Albertans and 17 per cent of Quebecers would use their returns to fund a holiday.

    B.C. residents are the most likely to miss the April 30 deadline: 26 per cent report having missed the filing deadline at least once compared with 19 per cent nationally. (And men are more likely to miss the deadline than women.)

    Missing that deadline can be fiscally painful.

    According to the CRA, the late filing penalty is five per cent of your outstanding balance plus an additional one per cent of the balance owing for each full month your return is late. If you were charged a late-filing penalty in any of the previous three tax years, the penalties double.

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Alan Zisman is a Vancouver educator, writer, and computer specialist. He can be reached at E-mail Alan