Are you in a state of confusion? Maybe you are wondering if you should prepare your tax return manually for filing in Canada or make use of tax preparation software or paper file your return.
NETFILE? EFILE? As you can see, there are numerous choices and so little time! The good news is that you don’t need to panic because in this article, we will be listing the advantages and disadvantages of each option and that will enable you to select the filing method that is most suitable for your needs.
Selecting the most suitable preparation option for you
You already know that you are required to file a tax return, but how do you go about it? Preparing your return yourself the ancient way, or using your computer, or do you just give up and employ someone to do it on your behalf?
Making use of your computer compared to a pencil
Have you ever envisaged using a computer to prepare your tax return instead of making use of the ancient technique of using a pencil and calculator?
Tax preparation software looks relatable to you only when you’ve already gotten into the world of preparing your return by yourself. Even if you are one of those that are reluctant about it, tax preparation software may give you the push you need.
Advantages of choosing to go the tech way
It is obvious that preparing your tax return using software has a number of advantages over paper filing. One of the favorites is automatic recalculation: This simply means that when a number on your return alters, the program automatically updates all important forms and recalculates your final tax bill.
The second advantage is that almost all software packages are dummy-proof setup, therefore you are required to locate the window that fits the exact slip you have whether it is a T3, T4, T5, e.t.c and fills it depending on what you see in your boxes. By so doing, you can save enough time and frustration!
In addition to this, a lot of tax software programs permit you to NETFILE your tax return, which is quick, effective, and ecologically friendly. You may be wondering what NETFILING means.
It means sending your return with the use of the Internet, rather than printing and mailing it in. In a situation whereby you’re expecting a refund, NETFILE will help you to get it quicker and that is an additional advantage.
Purchasing tax software
It may interest you to know that there is a wide variety of available software programs to prepare Canadian tax returns. Please watch out for programs that don’t prepare Quebec’s return.
That being said, let’s assume you want to NETFILE your return, below are some of the CRA (Canada Revenue Agency)-certified options:
- GenuTax: This is a free downloadable multiyear software that is Windows-only and doesn’t support Quebec returns. (They welcome donations to finance continuing development.)
- H&R Block: H&R Block can complete your return on your behalf, or you can make use of their Windows or Online Tax Programs to perform your taxes.
- *Tax Chopper by cute Tac Inc.: It is also one of the online software that doesn’t support Quebec returns.
- *TaxTron: You can find this in Windows and Mac versions and interestingly, it can handle Quebec returns also has online/phone support in various languages; English, Punjabi, Chinese, French, and Hindi.
- *TurboTax: It is possible for you to download TurboTax by Intuit Canada for PCs from, or buy CDs. There are online editions of the software available for both PC and Mac users and it handles Quebec returns.
- *UFile: This is yet another program that can handle Quebec returns and is also known to be part of the Dr. Tax Software group. It is either you choose to use the UFile Online or buy UFile for Windows to install on your PC.
Obtaining the most from tax professionals
A lot of people consider asking for help to be the final resort. Well, it is a commendable idea for you to admit defeat, and hire someone before you complicate things.
How to deal with a tax professional
Just before you hand over everything to the preparer, make sure you have gathered all the necessary information.
In case you run a business, the best thing to do is to summarize all your revenue and expenses beforehand. If you do this, you will be reducing your fee as well as ensuring that no relevant information is skipped.
Ask the appropriate questions
We have stated below the list of questions you should ask your tax professional to make sure he or she can manage your case:
- It is expedient that you find out the services they offer because while some tax professionals only prepare tax returns; others will assist you with other matters like estate planning or retirement planning.
- The second question is if he/she has worked in that area before. In a case whereby you have a business of your own or you are an avid investor, find out from your professional if he/she has worked with equivalent situations in the past.
- Find out who will prepare your return. Please note that the person you’re speaking to will not necessarily prepare your return unless you’re dealing with a sole practitioner so don’t get walked up if a junior staff member prepares your return because this is a norm and can help reduce your preparation fees.
- Know the professional’s fee structure because some of them charge by the hour. That being said, ensure that you request upfront for the hourly fee, and also for an estimate of the time duration your return will take before it can be completed.
- Tax professionals are required to have completed a two-year, in-depth tax course which is usually offered by the Canadian Institute of Chartered Accountants, therefore finding out what qualifications the professional has.
Determining how you can file your return
There are choices available to you for filing your return with the CRA after preparing your tax return. To find out the best choice for you, keep reading.
Send it online: File your return electronically
As we earlier stated, filing your return electronically is a wonderful choice because it’s rather easy, you can save and reduce the cost of a stamp and you can get your refund quickly (if need be).
What is the difference between NETFILING and EFILING?
You can choose to file your return electronically in either of the two ways:
- You have the option of NETFILING your return if you’ve prepared the return yourself using a CRA authorized by tax software. You can find the list of CRA-approved tax software on the CEA website and the CRA will send you a four-digit access code in your annual tax return information package if you are able to NETFILE. In case you lose the number, don’t fret, just visit the NETFILE website and apply for your code online, or call the CRA e-Services Helpdesk at 1-800-714-7257, you will receive it through MyAccount.
- As for EFILING, it is used only when you have employed someone to prepare your return for you. So, before you hire anybody to do your taxes, please find out from them whether they are EFILE-approved because the CRA must approve tax preparers to EFILE. There is no way you can EFILE your tax return by yourself.
The ancient method: Paper filing
It may sound weird but know that it is not everyone that embraces the computer. In case you fall under this category, there are two options available to you in case you want to paper file your return:
- It is possible for you to fill out your tax forms using your hand, just ask the CRA to forward the forms to you, endeavor to print them from the CRA website, or pick up a copy at your local post office.
- Another route is through the hybrid approach. This entails preparing the return with the use of your computer and printing off a copy to mail to the CRA.
After following any of these steps, paper filing becomes easy. All you need to do is to include the required information slips and receipts, sign your return, and place it in the mail.
In conclusion, filing your tax shouldn’t be a hard nut to crack. We believe that with the information in this article, you will be able to choose the filing method that is most suitable for you, and even if you are hiring someone to do it for you, you now know the basic question you must ask the tax professional.