This program may be dangerous to use unless you are very careful and know taxation

Over the past few years, the leader in personal tax software QuickTax has been raised its price from $29 to $69 for a small business or rental income return. This created a market opportunity for a cheap alternative.

Enter UFile which started at a humble $19 and now costs $29. The program has been getting good reviews so I used it again this year instead of Quick Tax. Generally a dollar saved is a dollar earned; however, penny wise and pound foolish is more appropriate with tax software.

I would advise tax novices to avoid UFile since it makes material mistakes in calculating the return, does not make on screen review intuitive and is a poor tool for what-if scenarios.

For very light use UFile might be a decent program. However, for anyone with business income, investments, rentals, capital gains or a complex family situation, UFile is outclassed by QuickTax. 

Do it right

The first rule with income tax software is that it must accurately calculate taxes. UFile does not do that. In one return, it double the personal exemption or “Basic Personal Amount” when the taxpayer went from separated to divorced during the year. On screen review is so poor that the return appeared correct. The only warning was an unusually large refund. The program would not drop the double personal exemption without tricking it.

In another case, the warning message wanted the business number but the error correction link returned to the wrong section of the return.

UFile didn’t calculate the business allowable deduction for an  auto lease.  I had to calculate the allowance manually and plug numbers to make the program work.

On screen review

Unlike QuickTax which shows you the income tax return, UFile has a three strep process: 1) answer questions on tax topics (the interview), 2) compile the return (Results) and 3) review the return (Tax Return).

You can’t see results if there are errors. Error checking is poor and sends you in the wrong direction sometimes. Allowing a double personal exemption while insisting on a business classification number is a program that has its emphasis in the wrong place. The first error will not likely pass muster with Canada Revenue but the missed business number is almost irrelevant.

The process involves quite a bit of back and forth between the interview and results. Since none of this is happening on screen, errors are created easily and hard to find later.

Reviewing the tax return is a screen printout of the return. If you see something that looks wrong, don’t click on it like you can in QuickTax. Go back to step one and try to figure out where the error started.

I have prepared thousands of tax returns both manually and on computer. The process was almost incomprehensible so I am wondering how many non-tax people just fill out the forms and hope for the best.

One return showed a large refund and the taxpayer was disappointed when I corrected the program’s mistake.

What if scenarios

There is some flexibility in how deductions are taken, who claims what and how much one should allocated to RRSP’s versus other investments. I didn’t try many what-if scenarios with UFile. The 3 step process made changing things cumbersome and the results slow to determine. I also lost confidence that the program was calculating things correctly so alternatives would have involved an audit of each one to see if the program was right.

For very light use UFile might be a decent program. However, for anyone with business income, investments, rentals, capital gains or a complex family situation, UFile is hopelessly outclassed by QuickTax.

Other people have different opinions of UFile. Tax Software Review – UFile 2009 and Quicktax vs. Ufile: A Tax Software Comparison