Wealthsimple Tax Review (previously SimpleTax): Is this Canada’s Best Free Tax Return Software?
As the saying goes, only two things in life are certain: death and taxes. And with the latter season upon us, Canadians are looking for ways to make filing their taxes a little easier. Let’s face it, many of us approach doing income taxes with a feeling that lies somewhere between low-level anxiety and absolute dread. Thankfully, there is a bevy of online tax software programs that can do the heavy lifting for us. Some of them even do it for free.
If you plan to file your own taxes this year, Wealthsimple Tax should be on your shortlist of apps to consider. The free online tax preparation software is straightforward to use and is built to handle basic returns to more complex tax situations, including investments, self-employment, and rental income. In other words, it will get the job done for most Canadians.
Introducing Wealthsimple Tax
Wealthsimple Tax has been around since 2012 when it launched as SimpleTax and has grown in popularity with each passing year. Originally founded by designer Jonathan Suter and his wife Allison, a tax lawyer, and friend and developer Justin Reynen, the company was acquired by Canadian Robo-advisor giant Wealthsimple in September of 2019.
For now, the Wealthsimple Tax experience remains unchanged. Still, with Wealthsimple onboard, users can expect to see some new and exciting enhancements in future years, a fact that should pique the interest of existing Wealthsimple clients.
Wealthsimple Tax provides most of the functionality of the best-paid tax software programs for free, and it delivers it tall in a way that’s remarkably intuitive and easy to understand.
Wealthsimple Tax Features
Let’s take a look at what you get with the 2020 version of Wealthsimple Tax. Again, Wealthsimple Tax is completely free to use, although they do provide an option to leave a donation after you’ve completed your return and are ready to file.
- 100% free (with donation option)
- Clean, easy-to-use interface
- Fast refund processing
- NETFILE approved
- Auto-Fill My Return
- Import previous year’s return
- Instant Refund Tracking
- Re-File capability
- Can handle investments, self-employment, and rental income
- Free email support
It’s 100% Free
Some tax return software programs complicate things with multiple tiers and price points, leading to confusion. Wealthsimple Tax has one tier, free. When you’ve finished filling out your return, you will have the option to leave a donation of any amount, but there is no obligation. Most users donate between $10 and $20 for the service.
Wealthsimple Tax is NETFILE approved software, which means that when you’ve completed your return, you can transfer it to CRA directly from Wealthsimple Tax in a matter of minutes. They promise fast refund processing as well, an added benefit.
Auto-Fill My Return
Wealthsimple Tax can import more than 50% of your tax information directly from CRA, with Auto-Fill My Return. This saves you time by not having to input the data from multiple tax slips manually. You will need an active CRA My Account to take advantage of this service. Your previous year’s tax info, including details for your spouse and/or dependents, can also be imported, saving you even more time.
Instant Refund Tracking
As you fill out your return, Wealthsimple Tax keeps track of your refund in real-time. This gives you an idea of where you stand at all times. Also, the refund optimizer is a handy tool that shows you how various deductions and credits can help you save tax and get a bigger refund.
With Wealthsimple Tax, you can make use of Re-File, an online service that allows you to make adjustments to returns that you’ve already filed. The process is quick and easy and enables the user to see how the changes will affect their refund or balance. You cannot use Re-File to make changes to the information found on the first page of your T1 General Return, such as your address or marital status.
Handles Complex Tax Situations
Unlike most free tax software, Wealthsimple Tax can handle more complex tax situations, like multiple income streams, self-employment, or rental income. In other words, most Canadians will be able to process their returns with Wealthsimple Tax. If you have a tax structure that’s more complex than this, i.e., corporation, foreign income, or properties, then you’re probably better off dealing with a tax professional.
Wealthsimple Tax vs.TurboTax
You may be wondering how Wealthsimple Tax stacks up against Canada’s most well-known tax return software, TurboTax. Both applications have a lot to offer, so let’s make a quick comparison. First of all, what you need to know is that TurboTax offers four tiers at four different price points: TurboTax Free ($0), Standard ($19.99), Premier ($34.99), and Self Employed ($44.99).
In my opinion, Wealthsimple Tax is superior to the free version of TurboTax due to its super clean user interface and because it allows you to import your previous year’s tax information into your return, something you can only do with paid versions of TurboTax. While TurboTax is also straightforward to use, you’ll love how clean the Wealthsimple Tax UI is if you complete a basic return. Your entire return is done on one screen.
With the paid versions of TurboTax, you get a bunch of bells and whistles that you won’t get with Wealthsimple Tax. And depending on what your needs are, it might be worth the money. For example, you can buy an audit defense add-on and have a TurboTax professional review your return to make sure your tax savings are fully optimized.
If you own a business, TurboTax has the Self-Employed tier, at $44.99, which is packed with extra tips and specialized guidance to help maximize all of your potential credits and write-offs. If the added guidance and features are important to you, this is where TurboTax shines.
Wealthsimple Customer Support
In past years, if there was an area where Wealthsimple Tax came up short, it was in their customer support. The problem was that users didn’t get that much. For the 2020 tax year, however, they’ve made some improvements and now provide support if your return is audited by the CRA, as well as providing answers to tough tax questions. While the support doesn’t yet measure up to competitors like Turbo Tax, it’s a step in the right direction.
Is Wealthsimple Tax Safe?
Whenever you’re required to input your personal and/or financial information online, you want to know that the software you’re using is secure. You can rest assured that Wealthsimple Tax takes your privacy very seriously. They use the highest levels of encryption when storing and transferring the data in your income tax return. The NETFILE service also uses the highest security levels possible. For details, visit the Wealthsimple Tax security page.
Wealthsimple Tax Pros and Cons
To summarize everything Wealthsimple Tax has to offer, let’s take a look at the pros and cons:
- Price (free, with the option to donate)
- NETFILE certified
- Clean, easy to use interface
- Access to other Wealthsimple savings and investment products
- Can handle self-employment, rental, and investment income
- Customer support
- Not suitable for highly complex tax situations
Is Wealthsimple Tax Right for Me?
If you’re filing a highly complex tax return, i.e.you own foreign property, operate a trust, or draw income from a corporation, you should always consult a tax professional. They may charge more, but chances are you’ll save in the long run.
That said, if you’re like most Canadians and your tax situation is fairly straightforward, Wealthsimple Tax is pretty hard to beat. Not only is it fast and easy, and free, but it’s also jam-packed with features to handle most returns. If you’re a sole proprietor, you may also want to check out TurboTax’s Self Employed software, keeping in mind that Wealthsimple Tax can also handle self-employed returns for free.