Tax time 2015: How to file your tax return online
Close to 80% of tax returns were filed electronically last year
This tax season, taxpayers will be able to view their notice of assessment or reassessment online in the My Account section of the CRA website if they sign up for something called "online mail." They'll receive email notification when their assessment is ready and will not receive it by post. The CRA plans to progressively make other other types of correspondence available this way.
Our goal is to replace the 120 million pieces of mail we are sending out each year with a fast, secure and green electronic correspondence service.- Philippe Brideau, CRA spokesman
"Our goal is to replace the 120 million pieces of mail we are sending out each year with a fast, secure and green electronic correspondence service," CRA spokesman Philippe Brideau told CBC News.
Two other improvements: All CRA-certified tax software will this year send returns directly to Netfile — so, no more uploading those .tax files yourself — and the CRA is also introducing a service for tax preparers who use Efile to file returns on behalf of clients that will automatically fill in certain fields on a return.
Called Tax Data Delivery, the system will make available to the tax preparer information from a client's T4 slips, RRSPs, capital gains and losses, universal child care benefit statements and other tax-related documents as long as the taxpayer has authorized the preparer to have access to that information — by filling out a T1013 form. This authorization can be cancelled or changed online at any time.
How we filed in 2014
Paper: 6,154,033 (22%)
Netfile: 7,200,084 (25%)
EFile: 14,941,583 (53%)
Total: 28,295,700 (100%)
Source: Canada Revenue Agency
Only about 22 per cent of the 28.2 million tax returns filed in 2014 were filed the old-fashioned, ink-and-paper way, and the number continues to dwindle each year — in 2013, it was 25 per cent.
Last year, 25 per cent of returns were filed using Netfile, the online option for individual taxpayers, while the other 53 per cent were filed via tax professionals, who use the Efile service.
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The CRA says filing online is cheaper and more accurate and can put a refund in a taxpayer's bank account in as little as eight days through direct deposit. For a return sent in by mail, a refund can take four to six weeks.
The tax agency said it paid out more than $28 billion in refunds last year, with the average refund being $1,696. About 58 per cent of returns file resulted in a refund, the CRA said.
How to Netfile
A variety of software programs are available to help Canadians file electronically. Most cost money — unless you have modest income — but several are free for everybody.
To have your return filed directly to the CRA vie Netfile, you have to use one of the certified tax programs listed on the CRA website.
Taxpayers have two main options: software that is downloaded onto a computer or mobile device, or web-based programs. Once these programs complete your tax return, you can either have it filed on your behalf electronically or print it out and mail by post.
Here's a quick look at the bells and whistles of some of the most popular CRA-certified tax-preparation programs for Netfiling. For a full list, see the CRA website, which is updated as additional programs are certified.
TurboTax's other programs have been certified for tax year 2014. The simplest edition — for filers who have no kids or significant assets and are claiming only income — is $9.99. The next version up, the Standard edition, is $39.99 ($17.99 for the online version) and will handle eight returns and is meant for those with relatively simple finances, including people with RRSPs, pensions and children.
The $69.99 Premier version ($34.99 online) adds features for those with rental or investment income to report. The $109.99 Home and Business edition ($49.99 online) is for consultants, contractors and others with business income.
All of the downloadable versions are for PCs only. If you have a Mac, you'll need to use one of the online versions (see below).
Intuit also offers a free iPhone app, SnapTax, which can handle very simple returns for those with no dependants and who are under age 65 and live anywhere in Canada expect Quebec or the territories.
Like TurboTax, UFile for Windows uses the interview method to lead users through the tax-preparation process. UFile is installed on your computer (either via download or CD-Rom) and allows users to prepare as many as four returns for $19.99 or 12 returns for $39.99. (You can pay extra to add other returns.) It can handle self-employment income, including income from rental properties, foreign income and pension splitting, among other scenarios.
The company also offers several Pro editions (again, only for Windows), starting at $124.99 for 25 returns, and an online version (for Windows, Mac and Linux) that starts at $15.95. Its software is free for those with income under $20,000, first-time filers and students.
Mac users can file through UFile's online software, starting at $15.95 a return, plus another $10 for your spouse.
Deadlines for Netfile
Service is open as of Feb. 9, 2015. Personal tax returns for 2014 are due April 30, 2015.
Penalty for filing late: 5% of tax owing, plus interest equal to 1% of balance owing per month. If you were charged a late-filing penalty in any of the previous three tax years, the penalties may jump to 20% and 2%, respectively.
Even if you can't afford to send the full balance owing, file on time to avoid the penalty.
Source: Canada Revenue Agency
H&R Block is offering the desktop version of its tax software free to download and prepare returns. Customers will get charged once they're ready to file. It costs $9.99 to file up to four returns and $29.99 for up to 20 returns.
The software will only work on Windows-based computers.
Like its main competitors, H&R Block software employs the question-and-answer format and allows you to import your tax data from other software products.
The software can prepare a number of different personal returns, including for those with multiple small businesses, rental properties, commission or foreign income and child-care expenses.
TaxTron uses a step-by-step approach and works on Windows and Mac operating systems. However, by mid-2015 the software will no longer support Windows XP due to CRA upgrading its security after the Heartbleed bug last year.
The software free for those with total income of less than $31,000 and for full-time students.
A family licence, which costs $24.99 ($39.99 for Mac), will allow you to prepare and file five returns for earners with a total income of $31,000 or more and 15 returns for earners with income under $31,000.
This downloadable program charges $5.99 for one return, $7.99 for two returns, $9.99 for 10 returns or $17.99 for 20 returns. It will run on PCs with operating systems going all the way back to Windows 95 but is not available for Macs. It also cannot be used to file Quebec provincial returns.
This downloadable software costs $6.99 for one return and $13.99 for a licence that allows users to prepare up to 10 returns. It runs on Windows and Mac operating systems and is free for those with a total family income of less than $25,000. It can't be used to file Quebec provincial returns.
TaxFreeway is a downloadable program that costs $9.95 for up to 20 returns ($14.95 for the Mac version). It also offers a "3-in-1" package for $22.99 that allows users to file up to 20 returns using a PC, Mac or iPad. It claims to be the only Canadian tax software that allows users to work in interview and form modes simultaneously.
StudioTax is the work of BHOK IT Consulting, a group of software professionals in the Ottawa area. It's free to download and use regardless of income for up to 20 returns but asks for donations. It's available for both Windows and Mac, but the Mac version doesn't support Quebec returns. The company's website says that "hundreds of thousands" of people use its free service.
This is free downloadable tax software for Windows operating systems, which also asks for donations. It uses the familiar interview method and cannot handle Quebec provincial returns.
This French-language software is available to Quebec residents only using Windows operating systems. The basic version costs $24.95, although "The Demo" edition allows for two free reports when reported revenues are less than $25,000. It bills itself as comprehensive and easy to use.
This software comes in Mac, PC and online versions. It is free for students or people with total income below $25,000. Otherwise, pricing starts at $11.99 for a single return, or $79.99 for unlimited returns. eTaxCanada uses actual tax forms, but a step-by-step interview process is available if desired.
This service provides free download and online versions, promising no extra charge for complicated tax returns. The downloadable version is for Windows only.
The online version of TurboTax Standard is $17.99 for a single return, which will suffice for typical taxpayers with the usual claims like RRSP deductions, charitable donations and medical expenses.
But the company offers a free version for taxpayers with simple taxes to file. And they mean simple: no RRSPs, no investment income, no charitable donations and no pension or income from tips. You can also file for free if you’re a tuition-paying student with a household income of $20,000 or less.
Premier edition for those with investment or rental property income is $34.99 for a single return. A Home and Business edition is also available online for $49.99 per return.
UFile's online solution costs $15.95 for the first family member, plus $10 to include a spouse. You can file tax returns for dependent family members for free. All students and families with a total income of less than $20,000 can also file for free.
H&R Block Online
The online version of H&R Block's software is free for all users and their spouse. You are limited to 20 returns on any one account because of CRA regulations. It works on both Macintosh and Windows-based operating systems and also works on tablets.
This is web-based tax program is free for everyone regardless of income or types of deductions. The three Vancouver-based creators of SimpleTax claim they made the software free because they believe "you shouldn't have to pay to do your taxes." The program is equipped to handle rental and business income and other scenarios but not Quebec returns or returns for tax years before 2012. It is iPad friendly and doesn't require you to set up an account, which also means your data is not stored and you won't be able to review your past returns in future years.
If you like the program, you can make a donation to help fund it before you submit your return.
EachTax.com charges $5.99 for the first return and $3.99 for each additional return. It’s free for new customers, regardless of income, new immigrants, seniors and those who earned $25,000 or less. The software cannot calculate Quebec provincial returns.
TaxChopper (formerly CuteTax Online)
TaxChopper costs $9.98 for one return, $15.98 for two returns, $19.98 for three to five returns and $25.98 for six to 15 returns. It's free for those who made less than $25,000 and were single, divorced, separated or widowed at the end of the tax year. Couples with incomes below $30,000 and students who spent six months of the tax year enrolled in full-time studies can also file for free.
This web application, available from MacroNT Inc., is free unless you have self-employment or rental income, dependant-related expenses or other deductions such as RRSPs, in which case it costs $12.99.
AdvTax bills itself as an "extremely easy and incredibly fast" web-based tax program that is free for the 2014 tax year (for a limited time only, according to its website). Its text-heavy webpage may not be easy on the eyes, but it claims AdvTax will help you complete your return in just five minutes. It claims to support English, French and Chinese but those who need to file a Quebec tax return or are new immigrants won't be able to use the program. The program can be used on tablets and smartphones as well as desktop and laptop computers.
This web-based tax program is available for $9.99 for a single return and $14.99 for family returns. It's free if your total income is less than $20,000. Returns for Quebec and the territories, as well as rental income and self-employed business statements, are not supported, but the program is iPad friendly.
Finally, time for a quick mention of TaxMan — the work of an opinionated Victoria man who calls himself "the poor man's accountant."
Since 1995, he's offered a "moron-simple" program that uses CRA-approved forms. You can't Netfile this baby — you'll have to print it up and mail it in — but it is free, regardless of the number of returns or income.
TaxMan does, however, accept donations, for those who feel so inclined.
Of course, everyone who uses tax software can always file the old-fashioned way — on paper, via Canada Post. You just do your data entry through the program and then print the results and send them in.
You can also download all the forms you need from the Canada Revenue Agency's website or pick up a tax package at a CRA service kiosk or at the post office and fill everything out (shudder) by hand.