Backpack

Happy returns

Computers can make the job of filing taxes less painful

ROSS LAVER February 20 1995
Backpack

Happy returns

Computers can make the job of filing taxes less painful

ROSS LAVER February 20 1995

Happy returns

TECHNOLOGY

If there is one task for which computers are ideally suited, it is organizing. With a few simple keystrokes or the click of a mouse button, even a basic desktop model can sort mind-boggling messes of disorderly data into neat, tidy categories, vastly simplifying many of life’s more tedious chores. Little wonder that hundreds of thousands of Canadians now count on their home computers to help manage their personal finances—keeping track of everything from grocery bills to the interest earned on guaranteed investment certificates. The next logical step, for an increasing number of people, is to put that same processing power to work filling out their tax returns. A good tax-preparation program can not only avoid hours of frustration, it can also save money by catching mistakes and alerting users to deductions they might otherwise have overlooked.

Almost everyone who has tried one of these software packages has become con-

vinced of their value. “Back when I used to do my taxes with a pencil and paper, I was never really sure whether I was paying too much,” recalled Dave Godin, a Canadian Forces warrant officer who lives in London, Ont. Three years ago, acting on a friend’s

Computers can make the job of filing taxes less painful

recommendation, Godin bought a copy of CanTax Tl, one of Canada’s most widely used tax programs. “It took me a while to figure out how to use the software,” he said. “But every year since then, I’ve felt like it is saving me money. The program lists every

possible deduction and expense, gives me a lot of ‘what if scenarios and prompts me if I forget to fill something out.”

Of course, there are some problems that even a computer cannot solve—among them, deciding which tax program to buy. There are at least 10 on the market, each of which is revised every year to take account of the latest Revenue Canada rates and regulations. As if that is not confusing enough, consider the advertising claims of the three most popular brands: CanTax Tl (“Canada’s number 1 income tax software”), Brian Costello’s Home Tax (“Canada’s number 1 best-selling tax software”) and WinTax (“Canada’s number 1 Windows tax software”).

Who is telling the truth? Unlike many tax returns, the companies’ sales claims are not independently audited, so there is no way to be sure. But industry experts say that combined sales of the three products are likely to top 200,000 this year, at prices ranging from about $20 to $40 a copy (discounts are common). Although they began as separate companies, both CanTax and Home Tax are now divisions of SoftKey International Inc. of Cambridge, Mass. WinTax, launched in Edmonton in 1992, was purchased a year ago

by U.S.-based Intuit, which, in tum, was taken over last fall by giant Microsoft Corp. of Seattle, Wash.

In practice, each program does an excellent job of calculating a return quickly and accurately, while offering ample advice on exemptions and deductions. All feature the ability to prepare two returns simultaneously,

WinTax’s CD-ROM version: helpful, money-saving tips

swapping tax credits back and forth where possible to minimize a family’s total tax burden. And each allows the user to import information from any of the more popular financial-management programs, such as Intuit’s Quicken or Microsoft Money, although in most cases the data will have to be converted first to a standard ASCII format (a relatively simple procedure). Finally, all three can print out the completed return on any of 70 or more Revenue Canadaapproved forms, using a dot-matrix, ink-jet or laser printer.

Beyond that, there are some significant differences among the programs. Perhaps because it has been around longer than its competitors and is favored by many professional income-tax preparers, CanTax (available in DOS and Windows versions, for every province except Quebec) tends to assume more knowledge on the part of the user. For maximum advantage, first-time buyers should probably devote some time to exploring the program before setting out to complete a return. Home Tax (DOS and Windows versions for all provinces, Macin-

tosh versions for all except Quebec) has tried to simplify the process with an onscreen “Easy Prep conveyor belt” that guides the user through the return. At times, though, the animated device—like the unnecessarily complicated 54-page user’s manual—adds to the confusion, making it easy to become disoriented. The program also has a busy look that may leave users befuddled.

The best choice for most novice and intermediate computer users—as well as those who find tax filing an exercise in frustration—is probably WinTax (Windows only, all provinces; the company is also releasing a Macintosh version this year called QuickTax). WinTax’s “Easy Step” interview method takes users line-by-line through the tax return, asking questions that can generally be answered with a simple yes or no. The approach is easy to follow, and the 26page manual is concise and well written.

Whichever brand of tax software they choose, buyers whose computers are equipped with a CD-ROM drive (doublespeed or better) should look for the new multimedia versions of these programs. For the same price, users get additional advice and money-saving suggestions delivered by expert talking heads in a small, onscreen video window. The bells and whistles won’t exactly make it fun, but they might at least divert attention from the more painful aspects of tax filing.

ROSS LAVER