Canadian Tax Return: Preparing And Submitting Your Taxes

Would you prepare your tax returns manually for filing in Canada or utilize a tax preparation software? Does paper file your return? NETFILE? EFILE? There are so many choices, but so little time! The good news is there’s no need to panic. 

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The pros and cons of every available option are highlighted here to help you choose the best filing method that fits your needs.

Choosing the preparation option that’s right for you

We’ll know you’d have to file your tax return, but do you prepare it yourself the old-fashioned way, or use a computer, or would you just throw in the towel and pay someone to do it for you?

Using your computer vs. a pencil to tally your taxes

Have you ever thought about preparing your tax return using a computer instead of the ancient method of pencil and calculator?

Tax preparation software is a great idea when you’ve already delved into the world of preparing your own return. And even for the fencers, tax preparation software might give the nudge you need.

Looking at the perks and perils of using the tech route

Using software to compute your tax return data has lots of advantages over paper filing.

Our favourite is of course automatic recalculation. When any number on your tax return changes, the program updates every relevant form and recalculates your final tax bill.

Another advantage is that multiple software packages are fake-proof, they’re set up in a way that all you ever need to do is find the window that corresponds with the particular slip you have (be it a T4, T3, T5, or so on) and just fill it in based on what appears in the boxes. This saves users lots of time and frustration!

Most tax software programs enable you to NETFILE your Canadian tax return, which is quick, effective, and ecologically friendly.

NETFILING refers to you sending your tax returns using the Internet, instead of the old printing and mailing it in. If you’re expecting a refund, you would get it faster when you NETFILE, which is an added advantage!

Shopping for tax software

It’s quite shocking to see how many software programs are available to help prepare Canadian tax returns.

If your return is straightforward and you don’t want to print off a copy to mail into the CRA, almost all programs available out there will do the trick.

That being said, some programs do not prepare Quebec tax returns, so look out for that. If you want to NETFILE your Canadian tax return, here are some CRA accredited options:

  • GenuTax: it is a Downloadable multiyear software that is completely free! (Donations are accepted to fund further development.). This software is Windows-only and doesn’t prepare Quebec returns.
  • H&R BlockYou could’ve H&R Block finish your return for you, or utilize their Windows or Online Tax Programs to prepare your own taxes.
  • Tax Chopper by Cute Tax Inc.: This is an Online online only platform that doesn’t support Quebec returns.
  • TaxTronThis software is available in both Windows and Mac versions, and supports Quebec returns. Support is mostly available online or via phone in English, French, Hindi, Chinese, and Punjabi.
  • TurboTaxYou could download TurboTax for PCs or purchase it CDs. Online edition of the software is also available for both PC and Mac users. It supports Quebec returns!
  • UFileUFile is a part of the Dr. Tax Software group. It is another program that supports Quebec return. You can either use the UFile Online, or install on your Windows PC. 

Getting the most from tax pros

For few people, enlisting help is always the last resort when preparing their Canadian tax return.

But sometimes, admitting your inabilities and enlisting the services of a professional before getting into trouble is the best idea.

Dealing with a tax professional

Ensure you have gathered all the necessary information before sending it to the professional preparing your Canadian tax returns.

If you own a business, your best bet is to sum up all your revenues and expenditures before time.

You’ll significantly reduce your fee, and make sure in the process that no relevant information is omitted.

Ask the right questions (FAQ)

Below is a handy list of basic questions you ought to ask your tax professional to ensure he or she can properly handle your situation:

  • What services do you offer? Some professionals only prepare tax returns. while others help you with other matters such as planning retirement or estate.
  • Have you worked in this area before? If you own your business, or are an avid investor, ensure the  professional you’ve chosen has worked on similar accounts before.
  • Who will prepare my return? Except you’re working with a sole practitioner, the individual you’re speaking to may not necessarily prepare your return. Don’t be alarmed If it is a junior staff member preparing your return, don’t be alarmed as this is not only commonplace and can actually save you preparation fees.
  • What is your fee structure? Most tax professionals charge hourly, so ensure you inquire upfront for the hourly rate, as well as for an estimated time your return.
  • What qualifications do you have? Tax professionals must have completed a two-year, specialized tax course offered by the Canadian Institute of Chartered Accountants.

Figuring out how to file your return

After you’ve prepared your tax return, you have few routes for filing your return with the CRA. What’s the best route for you? Read on.

Turn it in online: Electronically file your return

Electronically filing your Canadian tax return is a great choice because it’s relatively seamless, plus you can get your refund faster, and still save a tree and the cost of a stamp!

Understanding the difference between NETFILING and EFILING

Electronically filing of your return can be done in one of two ways:

  • NETFILING your return. If you’ve computed your Canadian tax return yourself using CRA-approved tax software, you’d have the option of NETFILING your return. The list of CRA-accredited tax software is on the CRA website. If you successfully NETFILE, the CRA would send you a four digit access code in your annual tax return info package. If the number gets lost, you’d have to go to the NETFILE website and apply for your code online, get it via MyAccount, or call the CRA e-Services Helpdesk at 1-800-714-7257.
  • *Having your return EFILED. E-FILING is used solely when you’ve enlisted a third party to prepare your Canadian tax return for you. The CRA must approve tax preparers to E-FILE, so if you’re hiring a professional to do your taxes you’ll need to ask them if they are E-FILE approved. You can’t E-FILE your tax return yourself.

Paper filing: The old-fashioned way

Very true, not everyone embraces tech-based methods. If you want to properly paper file your tax return you have two preparation options:

  • You could fill out your tax forms by hand, request the CRA to send you the forms, print them from CRA website, or pick a copy up at your local post office or CRA office.
  • You could also go for the hybrid approach, this means preparing the return using your computer but then printing off a copy and mailing it to the CRA.

After preparing the return, the paper filing is trouble-free. Just attach all the necessary information slips and receipts, sign your return, and put it in the mail.

Ensure to postmark it no later than midnight on April 30 to evade late filing penalties. And don’t forget the cheque, if you have a balance owing. 

Money in the bank: Direct deposit of your tax refund

When you put set in motion a direct deposit with the CRA you receive your tax refund a few days earlier than if it were mailed to you.

You don’t need to bother about your tax refund cheque going missing, or about going to your bank.

Complete form T1DD, The “Direct Deposit Request,” with your bank details.

This form could be sent to the CRA at any given time. If you don’t send it in before your tax return is finished, you could send it with your return.

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