Sunday, April 06, 2008

UFile 2007

After learning that QuickTax 2007 included two returns with their package this year, I decided to look for an alternative. I settled on UFile 2007, which includes eight returns.

With the rest of the family out of town, I finally got around to doing the taxes this weekend.

The install and product activation went without a hitch. Product registration, which is optional, was not able to connect to the server (subsequently I tried to register the product and had no problems). The program checked for and downloaded an update.

I was able to import previous year information from QuickTax 2006, avoiding having to enter all personal information again.

The interview process is straightforward and I was able to enter all relevant information in a short time. It took me longer to find all the child care receipts then to enter the data. The only problem I have encountered with version 2007.1120 is a glitch between previous year unused RRSP contributions and Home Buyer's Plan (HBP) repayment.

Due to a problem with TD in 2007, my wife contributed the 2006 HBP repayment twice. Instead of reversing the duplicate amount, I decided to keep it and carry it over for the 2007 tax year. UFile carried this amount from the QuickTax 2006 file. My wife had no contributions into her RRSP for the 2007 tax year, so those fields were left empty. I entered the HBP information as per the interview.

However, when preparing the tax return, UFile shows RRSP income on line 129. On the Tax Return tab, Part A on Schedule 7, shows the unused contribution, however Part B - Repayment under the HBP or the LLP - is completely empty. Further, UFile is showing an amount in Part D - RRSP unused contributions available to carry forward - that equals the amount in Part A. Something is not right.

To verify the issue, I entered an unused RRSP contribution on my return but reduced my RRSP contributions by the same amount. Sure enough, UFile showed a RRSP income amount on line 129 and also reduced the HBP amount. I fired off an email to UFile to get their assistance.

After some research, I think I figured out what the problem is: UFile is not including the unused contribution because this could be an amount from any previous year. For an RRSP contribution to qualify as a HBP repayment, said contribution has to be made in the year the repayment is due or the first 60 days of the following year. UFile does not know nor has been told if he unused contribution qualifies for HBP.

What is needed is a checkbox or pull down menu that lets the user declare that all or a portion of the unused RRSP contribution qualifies as a HBP repayment for the previous tax year.

I was able to figure out a solution that uses the unused RRSP contribution, allows the HBP repayment and has no impact on the bottom line.

I have no major issues with the program. It provides a lot information including the estimation of Child Tax Benefit payments, RRSP contribution limit for the coming year and so on. The MaxBack feature appears to work well, automatically maximizing who should receive certain deductions and credits.

1 comment:

Mark Rogers said...

I'm having this same issue with Ufile 2009 - what solution did you figure out to put the unused RRSP contribution towards HBP repayment?