Canadian Tax Advice
The following is some general advice that you can take or leave. However, we recommend you take it.Doing taxes online
We have pages on the dos and don'ts of tax preparation and a before you file page. We also strongly recommend you file your taxes online. The CRA even gives e-filing an endorsement calling it "easy, convenient and environmentally friendly." There is:
- No mail loss
- Less processing time
- Less waste of paper
- Better accuracy due to computer calculation and easy access to checking through databases, etc.
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- Get their refunds faster (usually, much faster)
- May find their forms easier to fill out with certain programs
- Find the entire process more convenient, less time consuming and ceaper.
Many people have concerns about safety and security of course. Many sites use secure connections. Current technology calls for a Secured Sockets Layer (SSG). This means the information you send is encrypted (or translated) into a code understood only by the server to which it is destined. Yes, there are stories of hackers breaking into government records, but there are also stories about mail theft. Crime can be found everywhere and criminals get caught.
Technology
You also need to be conscious of your own technical abilities. E-file sites including the ones profiled on this web site are becoming easier to use every year, but you need to be sure that you understand everything you are doing.
Technology novices might find it hampering to keep their mind on the accuracy of their tax returns, while they deal with technology they don't understand exactly. Use the e-file company's Help menu or get help from someone you know. Give yourself time to learn. If you don't have the patience, or just don't get it, then you can go back to your old ways.
Price
You need to find your own comfort zone here. There are three basic possibilities:
- File for free using NETFILE services if you are confident you know your tax form well.
- E-file companies (like those profiled on this site) guide you through the tax filing process for fees and these do vary quite broadly.
- Professional tax preparation help for those with a complex tax return.
Taxes and Your RRSP
Registered Retirement Savings Plans (RRSPs) can be used to defer taxes until a later year. If you contribute money to an RRSP, you get a tax deduction for the current year. This can be a big advantage. You won't be able to avoid paying the tax on the contribution forever, but most people like the idea of deferring the payment until they retire (by that point, the RRSP will probably have grown significantly).
