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5 Essential Tools to Calculate Your Income Taxes

By Ann Smith

With tax season in full swing, it’s important to make sure you are equipped with the tools to accurately calculate your taxes and save as much money as possible this year.

Within April 2022, almost 93.7% of the tax paying population have used electronic methods to file their taxes and claim their returns.

The maximum influx of the tax calculation and payment to electronic platforms can make it more convenient for the public to manage their own tax filing.

5 Essential Tools to calculate your income taxes

Whether you’re doing your own taxes or paying someone else to do them, it’s always good to have the right tools on hand.

This will help to ensure that you’re getting the most deductions and credits possible from the Government.

The CRA (Canada Revenue Agency) provides one tool—the tax calculator—but using it will only give you an estimate, not an exact amount that you can enter on your tax return.

Luckily, there are many other tools out there for calculating your income taxes, maximum deductions and eligible credits, all of which should be used to better inform you when filing your taxes next year.

So let’s check them out!

1. Federal Tax Calculator

No matter if you’re self-employed or work for an employer, you should definitely familiarize yourself with the free federal tax calculator features. It will help you make sense of what would otherwise be a very complicated calculation.

It’s always wise to go with a brand you trust like Wealthsimple.com - they have everything you need!

Plus, they will prepare all of your taxes on time so there are no penalties or late fees!

Advantages

a) Allows you to plug in all necessary information such as income earned during the year, expenses related to earning said income, deductions available under your current employment status etc.

b) Gives you options to file online or print out a form and mail it in. If you’re filing online, simply enter your personal information (name, address etc.) along with details about income earned throughout the year.

c) Provides you with the flexibility to choose how much money you want to save by using the tax saving feature within your tax calculator Ontario.

Pricing

Their most basic option costs $0 per month and allows users to access their own account 24/7 from any device via a secure login. Users who wish to pay for their accounts via direct deposit can sign up for free with any major Canadian bank or credit union. Lastly, those who don’t mind paying $2 per month receive additional perks including unlimited transactions plus access to premium customer support. You can also check out their crypto, trade and investment calculators.

2. TurboTax TaxCaster

TurboTax TaxCaster App is a simple way to estimate your tax return. This free app will automatically walk you through your income, expenses, deductions, credits and other factors that impact your taxes.

For example, if you buy a new car or home—or start driving for Uber—then TurboTax TaxCaster App lets you know how much those items could increase your refund or decrease the amount of tax you owe.

In the end, it doesn’t matter whether you use TurboTax to do all the work or just want an estimate – learning how to calculate income taxes with TurboTax TaxCaster App can help get you started on doing more yourself. If you are self-employed then knowing how to calculate income taxes with the Turbotax Self-Employed edition may be helpful for you.

Advantages

a) Tax bracket calculator available as part of the Intuit package, which makes TurboTax.

b) Helps you understand what tax bracket you fall into based on your income and filing status (single, married filing jointly etc.).

c) Allows you to plug in numbers for both incomes to see where each one falls within their respective brackets as well as compare them side by side.

d) Offers extra help via live chat with CPAs (Certified Public Accountant) and enrolled agents, as well as phone service that will walk you through your entire tax filing process from start to finish.

Pricing

With different pricing plans to choose from, TurboTax can be tailored for a variety of users. The Basic plan is available for free but has limited features. For more in-depth reporting, such as financial investment advice, you can purchase a Deluxe or Premier plan for around $40 per return.

3. TaxAct Online Tax Software

TaxAct Online Tax Software is a great tool for filing your income taxes. It’s super affordable, has all of your bases covered (for both federal and state returns), is incredibly easy to use, and—most importantly—is secure.

Advantages

a) One-time or continuous subscription options.

b) Additional plans available at different price points if you need extra features like audit support or free live chat with CPAs.

c) Keeps track of every deduction possible – Whether it’s medical expenses, donations, student loan interest, alimony payments or other qualifying items for which you may be eligible to deduct from your income tax return,

Pricing

TaxAct Online Tax Software has 4 different pricing plans available - Free, Deluxe ($46.95), Premier ($69.95), and Self-Employed ($94.95). It’s easy to find a plan that fits your needs, too: you can choose based on how much money you make or how many dependents you have. There are also plans for people who want extra help or want to file additional schedules with their taxes.

4. H&R Block TaxCut Software

The TaxCut software is designed by H&R Block, a trusted brand with over 60 years of experience in taxes. They know a thing or two about saving you money—and they’re committed to your success.

Advantages

a) Offers an interview-style feature that provides personalized guidance on tax deductions and eligibility.
b) Has live chat support available during tax season, so you can get answers when you need those most.
c) Comes with free audit support (including unlimited phone consultations).
d) Offers special considerations for self-employed professionals for calculating income taxes.
e) The income tax calculator allows you to plug in specific numbers and see how much money will be withheld from each paycheck before filing even begins, planning ahead for any additional withholding that may be necessary should be simple.
Access to helpful tools like SmartLookTM, which allows you to receive f) step-by-step guidance from experts who will walk you through every step of completing your return—without having to wait on hold!

Pricing

The tax-preparation company H&R Block sells its TaxCut software in four pricing plans – Basic ($29.95), Deluxe ($54.95), Premium ($74.95) and Premium & Business ($89.95). If you own a small business in Ontario, it’s worth spending more for Premium or Premium & Business versions because they have special features designed specifically for businesses.

5. Quickbooks

Business owners are often looking for ways to save money, especially when they’re just starting out. That’s why many small business owners rely on income tax calculator tools like Quickbooks. By using these types of programs instead of hiring a professional accountant, you’ll be able to focus more time and energy on growing your business rather than doing paperwork.

Advantages

a) Can help track your expenses and produce organized reports.
Integrates with other online tools, like TurboTax, to calculate taxes and make it easy to file from any device or location.

b) Has an app for Apple Watch so you can track your expenses on-the-go without having to pull out your phone.

c) Allows to sync this platform with accounting software programs like FreshBooks or Xero in order to get an even better understanding of where your money is going.

Pricing

Each plan also includes a 30-day free trial, so you can decide which plan works best for you without being tied to a long-term contract.The Self-Employed plan is available at $7.50 per month. The Self-Employed Tax Bundle is available at $12 per month. The Self-Employed Live Tax Bundle is available for $17 per month. The final option includes live consultations with professional CPAs before you file your taxes.

Conclusion

If you are serious about saving money for tax season, just remember that a little preparation can go a long way.

When it comes down to it, you really have two options: you can either do your own taxes yourself, or use an online income tax calculator tool.

Making the choice to use an income tax calculator can help ensure that you don’t miss any deductions, credits or exemptions that you might be eligible for.

However, if your situation is complex (such as if you’re self-employed), then it would be a good idea to consult with a professional who can provide personalized advice on your specific financial situation.

Fortunately, you can do that right from within your income tax calculator tool with the right pricing plan.

Regardless of how much money you make or how many taxes you pay, there are ways to reduce what comes out of your pocket!

Figuring out your best strategy involves knowing what options exist and why some work better than others.

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