It’s that time again to file your Income tax return in Canada and there are several simple ways that you can do that.
Today I want to take you on my journey from being new to Canada and not understanding tax time and spending money to file to filing my tax return for free.
Income Tax Return season is like a 4 letter word for all Canadians but also a busy time because it’s not something that we choose to do it’s something we must do.
My New Home Country- Canada
When I moved to Canada from the UK I had no idea about Canadian Income Tax and how it worked. I, like many other permanent residents or immigrants had to research life in Canada and filing a tax return was somewhat part of the process.
What I mean by that is when you move to a new country learning it from the bottom-up can be overwhelming especially if you don’t speak English well. Most people just want to work and make money and worry about what comes after at a later date.
My first years in Canada were spent back in school so I could gain skills to find a career path in Canada which meant I was able to write off lots of education related expenses.
I remember when Mrs. CBB and I had to file our income tax return we would visit a Scottish gentleman (Mr. Accountant) in our city and that is where I started to learn.
What I learned over the course of two years of filing a tax return with him was that there were many ways to file your tax return in Canada and not just with an accountant.
Bonus was that we didn’t have to wait for an income tax return cheque in the mail because if we set up direct deposit the CRA would send it to use directly.
These are the 2018 stats from the CRA where cheque returns were just over 5 million and direct deposit slightly over 11 million.
| Refundby cheque | 5,153,435 | $9,077,655,636 | $1,761 | 31% |
| Refundby direct deposit | 11,606,641 | $20,555,077,435 | $1,771 | 69% |
Costs to file income tax return in Canada
Mr. Accountant was charging us just shy of $100 each to file our income tax return which I thought was the norm until I did a bit more research.
Most of my research led me to Kijiji, online ads and income tax software such as Turbo Tax which is a popular software in Canada.
There was a lady who posted an online Kijiji ad who would file tax returns for $15 and we were in awe how cheap it was.
Looking back we should have done more research rather than handing over our personal information to a woman claiming to do all sorts of tax returns for customers in our area.
She did there was no doubt about that but we didn’t know enough about her although the cheap price to file a tax return for her meant she was swamped with customers. Would we do that again? Nope.
If I can give you any advice it is that there are options out there when it comes to filing your income tax return in Canada and going with the cheapest person around doesn’t necessarily mean it’s the best option.
Going the personal route with online ads to file your income tax return make sure you find out who the person is.
Honestly, there are random people out there that can buy tax return packages and file your tax return for you with little to no costs involved.
The problem with that is providing your social insurance number and other personal information to a stranger who closes up shop once tax season is over.
Are they really legit or trying to make extra money on the side?
Stay away from sketchy or the unknown as there are other options.
So we went from paying $100 each to file our individual income tax returns to $15 with a random lady from Kijiji who seemed more than legit at the time but never again.
Filing our income tax return
There had to be a better way to file our tax return in Canada so that’s when I took over and said, I’m doing it myself. The first thing I needed to know was the various ways I could file our income tax return.
It turns out there were a few ways but I didn’t get down to the nitty-gritty of it all right away. I started filing our tax return journey using Turbo Tax which we purchased at Zehrs for just over $20 many years ago now.
UFile is another popular income tax software available and quite easy to understand and one year they were so kind as to host a contest on CBB to give away free tax return codes for their software.
What I liked about Turbo Tax and UFile was that they both walked me through the process without any glitches.
When you are new to Canada and have slim knowledge about the tax system like I did a tax return software like these was very helpful.
Moving forward 2015 to 2019 I set up a MY Account for Individuals with the CRA and file an electronic tax return for both Mrs. CBB and I and for two reasons.
- Very Easy
- It’s FREE
Hey, if it’s free I’m right in there but filing an income tax return for many Canadians can be tough-going and it’s not something you want to screw up.
Typically by mid February the Canada Revenue Agency opens up the electronic tax return system so Canadians can get a head start on filing their taxes.
In 2018 alone over 25 million Canadians filed their income tax return electronically and just under 4 million filed via the paper method.
Total returns receivedfrom 2018-02-12 to 2019-01-25
Canadian 2018 Income Tax Season: Your Questions Answered
| Filing method | Number of returns | Percentage of total |
|---|---|---|
| EFILE | 17,065,710 | 57.3% |
| NETFILE | 8,748,033 | 29.4% |
| File my Return (FMR) | 47,196 | 0.1% |
| Total – electronic | 25,860,939 | 86.8% |
| Paper | 3,923,564 | 13.2% |
| Total – all methods | 29,784,503 | 100% |
This is great for us because I do it all myself and frankly it’s fairly simple as long as you follow the process and are prepared with all the documents you need beforehand.
Electronic Tax Return filing methods
Below are the electronic ways that your income tax return can be submitted to the Canada Revenue Agency.
EFILE
This is a service for authorized EFILE service providers to file income tax returns on your behalf. So, when we went to Mr. Accountant we brought folders with our documents and paid him a fee of $100 each this is how he filed our tax return.
Netfile
Netfile is the current tax return program that we use to file our income tax with the CRA and it’s super easy to use. What I like about NetFile is that there is no paper involved, no mailing, less waiting for a tax return, secure and filing is direct.
Netfile cannot be used by tax preparers and not everyone is eligible to use Netfile as it comes with restrictions. If you went bankrupt or are a non-resident Canada you may not be eligible to use Netfile in Canada.
The NETFILE program is now open for the electronic filing of your 2015, 2016, 2017, and 2018 T1 personal income tax and benefit return. The NETFILE service will be open until Friday, January 24, 2020.
By Phone Tax Return
File My Return (FMR) is a newer free income tax filing service offered by the CRA which targets low-income or fixed-income Canadians.
This service will be perfect for my mother-in-law whose spouse passed away last year and she is now collecting government benefits. The CRA will send out letters to eligible participants by mid-February but if you don’t get a letter you don’t qualify.
At the beginning of the call when filing by phone the CRA will verify your eligibility.
If you are eligible all you do is make a phone call and answer questions by a secure free automated service and you’re done. The phone service runs 21 hours a day and participants can start filing the process as of February 18, 2019.
Individuals with questions about the File my Return service can call the CRA’s individual tax enquiries line at 1-800-959-8281.
Paper Tax Return
The pencil method of filing your tax return still exists and if you filed by paper the previous year the CRA will send you a new all-in-one package by February 11, 2019.
This is a service so you don’t have to go find a package or order a paper income tax package.
You can also call to order if you haven’t received a package or download the package free online.
- 1-855-330-3305 (for service in English)
- 1-855-330-3310 (for service in French) (for service in French)
The new all-in-one income tax return package will include:
A letter from the Minister and Commissioner
A consolidated package which includes:
the Federal Income Tax and Benefit Guide
the Provincial or Territorial Information Guide, with the income tax return, and
all federal and provincial (does not apply to Quebec) forms and schedules.
One pre-addressed return envelope
Free Tax Return Clinic
If none of the above appeals or applies to you then perhaps searching your community for free tax return clinics that you can visit for help with may suffice.
You can find a free tax clinic that you can submit your tax return through if you have a simple or modest income.
Modest meaning 1 person total family income of $35,000, 2 person $45,000, 3 person $47,500 and so on or a simple return from the following tax sources.
- employment
- pension
- benefits such as Canada Pension Plan,disability,employment insurance, social assistance
- registered retirement savings plans (RRSP’s)
- support payments
- scholarships, fellowships, bursaries or grants
- interest (under $1,000)
Other important income tax return info for 2019
Canadian Income Tax Rates for 2019
Trans Union Canada is another great source for finding your credit score and getting your credit report.
As you can see there is no shortage of ways you can file your income tax return in Canada and the faster you do it the faster you get a return if you’re eligible.
Discussion: How do you typically file your tax return in Canada? Leave me a comment below.
