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I had to bite my tongue when the Canada Revenue Agency (CRA) spokesperson said using Netfile is fun. "For the generation of people brought up on games — this is just one more," explains Colette Gentes-Hawn.
"Fun" might be stretching it but Netfile, which allows Canadians to upload tax returns directly to Revenue Canada via the Internet, certainly does make the task seem a bit more attractive. The process takes just a few minutes, is free to file, requires no trips to the post office, and best of all, your return will be processed faster.
This is the sixth year Netfile is available to the general public. It's important to note it's not the same as EFILE, which involves going through a registered EFILE service provider. With EFILE you submit your tax return to a tax preparation service provider, who then submits your electronic tax return to the CRA for you.
With Netfile there's no middle person — you upload the computer-generated tax return to the CRA website yourself. Netfile is available from February 13 to September 30, 2006 and service hours vary across Canada.
Simple step-by-step process
Filing your taxes with Netfile is a straightforward method.
1. Complete your tax return with one of the approved commercial tax preparation software packages or web applications. Appropriate software includes GenuTax and QuickTax. Click here for more details.
2. Check that you meet the CRA's conditions (for example you can only file a return for the year 2005), and that your address is correct. You may be exempt from Netfile if your address is outside Canada, you went bankrupt in 2005 or 2006, or this is the first time you're filing a tax return. Click here for more details.
3. Everything else, from legal obligations to payment options to hours of operation, is explained in detail on the CRA website. To check whether your browser meets Netfile security standards and settings, click on the green test button.
4. Once you've agreed with the terms and conditions, you'll be asked for your Social Insurance Number, date of birth and web Access Code (WAC).
5. Upload your tax return, state whether you have a balance due and click "I agree. File my return now!" Once you receive a confirmation number, sit back and relax. Your return generally takes two weeks to be processed.
Obtain a faster return
Lija Whittaker, an engineer with the Ontario Ministry of Transportation, used to send printouts of computer-generated tax returns to the CRA via snail mail. For the past two years she has used Netfile. "You don't have to leave your house and you get a faster return," she says, which is particularly handy if the government owes you money.
Netfile also reduces errors, says Gentes-Hawn, since taxpayers input their information directly into the system and no one has to retype it. "It's fast and efficient," she says.
Although taxpayers who use Netfile don't have to submit receipts, they are asked to keep them on hand in case Revenue Canada asks for them at a later date. In fact, "it's not unusual to get a letter," says Gentes-Hawn. Since the Canadian tax system is based on self-assessment, "the integrity of that system is preserved on checks on the back end."
Rising confidence
In 2004, 50 per cent of Canadians filing taxes used some form of electronic filing, up 11 per cent from 2003. The CRA estimates 70 per cent of tax returns will be filed electronically by 2007.The number of people using Netfile went from six per cent for the 2001 filing season to 14 per cent in 2004 and is attributed to rising confidence in online banking. "When the banks are considered secure, we fall into the same group with them," says the CRA's Dawna Lynn Labonté. "That shows in the numbers."
Special web access codes, provided by the CRA, which have to match a user's name and address, further enhance security.
Those who use Netfile and discover they've made an error after filing or receive receipts at a later date, can, since 2004, make adjustments and otherwise track their accounts through the My Account service. Help lines are also available for people who might experience difficulties when processing their return.
Updated March 2006
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Writer, Mara Gulens
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