Report reveals tax stress may cause Canadians to overlook simple tax filing solutions or miss valuable write-offs

FOR IMMEDIATE RELEASE:
March 6, 2007

Almost half of all Canadians find the idea of preparing their own tax return stressful, according to a study commissioned by UFile, the leading Canadian-based tax preparation software company, and this could contribute to the continuing trend in Canada to delay tax filing to the last minute and not optimize potential tax write-offs.

According to the report, 45 per cent of Canadians polled admitted that tackling tax return preparation themselves generated a moderate to high degree of stress. Female respondents indicated more apprehension at the thought of completing their own tax returns than men, with almost twice the number of female respondents choosing the most extreme stress rating as men (11 per cent vs. six per cent (6%), respectively).

Canadians still seem to procrastinate doing their taxes for as long as possible, with 44 per cent of respondents stating they’ll file in April – the last month of tax season. This represents a meager four per cent (4%) improvement over last year, in which 48 per cent said they would choose April as their tax-filing month of choice.

“Clearly, Canadians still feel somewhat overwhelmed by the idea of doing their own tax returns, which may also explain why they tend to wait to the last minute to file their taxes,” observed Joanne Birtch, vice president of marketing and new business development at UFile. “Yet, while some Canadians are racking up penalties and interest due to late filing, this procrastination and stress can be minimized in relatively inexpensive ways, such as filing online using an income tax return preparation software like UFile.”

Of those Canadians who actually plan on missing the tax deadline this year, 23 per cent stated it was because they found it “less stressful” to determine what they owe at a later date. Sixteen per cent (16%) of this group indicated they simply don’t pay attention to the tax deadline.

Canadians are also continuing the trend of neglecting to note the first day to complete their taxes; according to the study, 69 per cent of respondents weren’t aware of the first day they were eligible to file their taxes – only one per cent (1%) more were aware this year than last year.

The report also revealed 15 per cent of Canadians either don’t file their tax returns themselves or have never filed a tax return. Furthermore, 13 per cent of Canadians polled reported they knew someone who still has not filed a return for the previous tax year.

Finally, 32 per cent of Canadians report that it is “likely” they are unintentionally overlooking available tax write-offs or exemptions when they file their return. This has actually increased by four per cent (4%) from last year, demonstrating Canadians aren’t taking measures to optimize their tax return and receive money that is rightly due to them at tax time.

“Most Canadians will likely receive refunds after filing their income tax returns,” added Birtch. “It’s important they not fear tax season, but embrace it, simplify the process and file on time.”

UFile’s 2007 study was conducted by Decima Research January 11th through the 15th, 2007. With a sample size of 1,017 completed surveys, the results can be considered to be accurate within +/-3.1% 19 times out of 20.

Additional Findings Based on UFile’s 2007 Decima Survey:

• Regionally, residents of Ontario and Alberta had the highest degree of tax stress. Forty-nine per cent (49%) of residents from these two provinces reported that preparing their own tax return generated a moderate to high degree stress.
• Quebec residents, however, were the most relaxed about doing their own income taxes. Only 33 per cent – considerably lower than the rest of Canada – of Quebecers put themselves in the moderate to high stress categories.
• Twenty-two per cent (22%) of those who were aware of someone who still owes a tax return for the previous year had a household income of $100,000 or more. This was the largest group (in terms of income) who were aware of someone owing last year’s tax return.
• Although Canadians are clearly not paying attention to the first day to file their taxes and prefer to wait till the last minute to file, 97 per cent of respondents in the study have the best intentions, indicating they planned on meeting the tax deadline this year.
• Only six per cent (6%) of the 18-24 age group were aware of the first day they could file, making this the least knowledgeable age segment in this regard.
• Sixty-five per cent (65%) of respondents claimed they filed their first tax return when they were between 18 and 24 years of age. On a scale of 1 – 10, with ‘(1.)’ being the lowest degree of stress and ‘(10.)’ being the highest degree of stress, how would you would rate your stress level at the thought of preparing your own tax return?

On a scale of 1 – 10, with ‘(1.)’ being the lowest degree of stress and ‘(10.)’ being the highest degree of stress, how would you would rate your stress level at the thought of preparing your own tax return?

Tips to Simplify the Tax Filing Process:

• Prepare early: the earlier you prepare, the earlier you file and receive your refund -- or determine what you owe to avoid late penalties and interest.
• Refer to last year's tax return as a guide in order to ensure you don’t miss benefits and deductibles.
• Store slips and receipts throughout the year in a central place, such as an envelope, for easy reference at tax time.
• Remember to incorporate deductible expenses to decrease what you owe and ultimately maximize your refund.
• File online, on time, which typically delivers your refund as quickly as eight days.

About Dr Tax Software
Dr Tax Software Inc. is a privately-owned, Canadian company located in Montreal, Quebec. It is a leading provider of tax preparation products and has served the professional tax community with tax compliance products for 20 years. Dr Tax's UFile products include UFile.ca (online tax software) and UFile for Windows®. UFile.ca powers the tax centres for Canada's major Web portals, Sympatico.MSN.ca and Yahoo! Canada.

About UFile Products
UFile is available on CD-ROM or as an online program. Both UFile for Windows® and UFile.ca can prepare tax returns for all provinces and is available in French as ImpôtExpert. Those who choose UFile can take advantage of the program's unique QuikClik interview process and MaxBack refund analyzer, which saves money by finding every possible deduction and transfer to minimize your taxes and maximize your refund. This year's version also includes updated and intuitive help functionalities, as well as online support built directly into the product.

Pricing and Availability
UFile for Windows® is available exclusively at Future Shop and Best Buy for $19.99 for the standard box version or $29.99 for UFile Plus. Pricing online at www.ufile.ca starts at $15.95.

The online version of the product is available for free to students and Canadians making under $25,000 a year.

For more information please contact:
Joanne Birtch
Vice President, Marketing and New Business Development UFile
905 845-0908 or 1 800 834-5322