Is It Time To Electronically File Your Income Tax Returns In Canada

By Thor Hanso

The old saying goes that two things in life are certain: death and taxes. Although this is true taxes don’t have to be quite as painful as it was 15 years ago. Prior to the internet and personal computers for everyone filing your taxes was a terrible affair that required either an accountant or plenty of time. However, with the introduction of the internet filing your taxes is much easier than before.

However and quite surprisingly, is that not everyone in Canada files their taxes online. In fact, according to CBC in 2009 only 56% of tax returns were filed online. This means that 44% of the people are either using the old-cumbersome method of paper or using the automated telephone method, Telefile. Here is the breakdown of various tax-filing methods.

Paper – 11.29 Miillion returns (42.4%)

Netfile – 4.63 Million returns (17.4%) – The system that individuals use when filing their taxes through software applications like TurboTax, Ufile, etc

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EFile – 10.24 Million returns (38.5%) – The system that tax professionals use to file other people’s taxes.

Telefile – 445,067 returns (1.7%) – An automated system used for VERY simple tax returns.

In this computer aided world where the internet, computers and various tax processing software making things easier it’s hard to see people filing their taxes with paper. However, over 11 million people filed their taxes with paper in 2009! The need for a paper version is fairly clear, however, for anyone with a slightly complex tax return the increased value in using a computer aided version must outweigh the costs of the software!

In fact, it would be interesting to know if people filing their taxes with paper missed out on money (ie: deductions) that they didn’t know existed. Did they get their full RRSP deduction, tuition transferred, investment income, etc Is it was worth saving the money for the tax-software? In addition, filing your taxes online provides a much quicker turn-around time for your tax-return if the government owes you money!

The next question is what are the costs to the tax-payers of Canada to have a paper-tax filing system? Surely an online tax filing method must be cheaper than paying government employees for data-entry. What about placing the paper-forms online so everyone can file online and the data-entry step is removed!

The Canada Revenue Agency’s NETFILE system, the system used to file your taxes online, is turning 12 this year. This means we’ve been able to file our taxes online for 12 years. In this time the citizen’s of Canada have gone from 0% filing online to 56% this is a huge increase but still much lower than expected from a computer dominated world! How many more years till everyone is filing their taxes online or till the government makes it mandatory to file online?

Like it or not taxes are complex and the amount of different government programs is hard to keep track. Might as well use a tax software where you simply fill in the required boxes, it checks your return for errors and provides all the calculations accurately. With the various tax-software platforms the cost associated with the software is very competitive and can be as in-expensive as $6.

About the Author: For a full review of the

best Canadian Tax Software

visit Thor’s website

Best Tax Software

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Source:

isnare.com

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This entry was posted on Saturday, March 17th, 2018 at 2:30 am and is filed under Financial Services. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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