Free and Easy Online Tax Preparation in Canada

As a resident of Canada, filing and paying taxes is a mandatory part of life. Putting off this duty could have severe long-term repercussions, so it's important to beat the deadlines and fulfill the requirements as soon as possible.

You should avoid filing taxes late because it will cause you to pay more in interest and penalties. Interest, fines, and fees are a pain to accumulate. Not paying your taxes on time can have a negative effect on government benefits, which is bad news if you're trying to get out of debt, build wealth, or do both.

Thankfully, if you choose to file your paperwork online, you can expect a much shorter processing time. If you live in Canada and need a primer on filing your taxes online, this is the place to start. Tax preparation is complicated; if you need assistance beyond this, hire a professional.

With Wealthsimple Tax, you can file your taxes quickly and easily, knowing that they will be prepared correctly, and for as little as you want to pay.

Exactly what are the upsides to completing your tax return electronically?

There are a few advantages to filing your taxes online. One benefit is how quickly you can submit your paperwork and know that it has been received and processed. Since this is not 1993, it is preferable to submit paperwork electronically.

The Canada Revenue Agency (CRA) mobile app lets you check the status of your return, change your address, modify your direct deposit information, check your RRSP and TFSA contribution limits, and modify your marital status.

If you have the time on the other hand, you can also call to find out where your return is in the process. If you don't submit your tax return electronically, however, it may take longer for these changes to reflect in your account.

The interfaces and online applications that file your taxes for you can greatly simplify the process and lessen the likelihood of mistakes, which are both good reasons to file online. For example, tax preparation programs like TurboTax and Wealthsimple Tax (we favor the latter) can ensure that you get the biggest possible refund. In addition, if you file your taxes online, you can disregard the requirement to include receipts unless the CRA asks for them.

In conclusion, submitting your return online will result in a quicker refund. In some cases, refunds can be received in as little as two weeks when you use direct deposit.

You should know the following dates before you file your taxes:

The 2022 tax filing deadlines are:

• Tax returns must be submitted by April 30, 2023 (technically, you have until May 1, as April 30 falls on a Sunday).

• If you or your spouse or common-law partner are self-employed, you have until June 15, 2023, to file your taxes.

The due date for 2022 taxes is

The deadline to submit tax payments is April 30, 2023; however, since that date falls on a Sunday, the payment deadline is extended to the following business day, May 1, 2023.

Get the necessary paperwork ready.

You can anticipate receiving the bulk of the paperwork you need to file your taxes online by the end of February, if not sooner. It's impossible to get started on your tax return online without knowing your income, expenses, deductions, credits, etc. You'll be stopped in your tracks and unable to move forward if You can use some tax preparation software to fill in part of your return now and finish it at a later time.

When completing your tax return, you may need to consider the following common forms of income:

Income

You may have to file Canadian tax returns because you earned money in more than one way. According to the CRA website, the following are examples of taxable income:

Money from jobs and being self-employed

This includes wages, salaries, tips, commissions, and earnings from businesses you own or run, as well as income from working abroad.

Funds from a Pension or Other Savings Plan

Income from pensions and savings plans, such as Social Security, the Canada Pension Plan, the Quebec Pension Plan, and other national or international pensions.

Capital gains

Interest, dividends, and capital gains are all examples of investment income.

Funds from Benefits

Income from benefits such as EI and other benefits, workers' compensation benefits, social assistance payments, or UCCB also counts toward this total.

Input your costs, credits, and deductions.

You can reduce your taxable income (and, by extension, your tax payments) by taking advantage of a wide variety of deductions and expenses. Credits can also be used to lower your tax liability. Some credits, known as "non-refundable," can only be used to offset your taxes to zero. However, there are other credits that can be returned to you, called refundable credits. Some common credits and deductions you may be eligible for are as follows:

Deductions

• RPP stands for "Registered Pension Plan"

• Taking a Withdrawal from Your RRSP

• Subtraction for the Split-Pension Amount You Choose

• Paying Dues to a Union, Profession, or Similar

• Costs of Child Care

• Subtraction for Disability Assistance

• Abnormal Business Expenses Loss (ABEL)

• Costs Associated with Relocating

• Payroll Taxes Used to Support Families

• Costs Associated with Research and Development

• Miscellaneous Labor Costs

• The Home Use Exemption for Religious Workers

• Subtractions From Other Areas

• Personnel of the Canadian Armed Forces and the Police Forces are Subject to a Deduction

• Costs Associated with Stock Option Exercises

• Other Years' Losses for Limited Partnerships

• The Other Years' Non-Capital Losses

• Taking a Tax Break on Your Capital Gains

• Reductions for Northern Residents

• Costs of Interest and Maintenance

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• A Person's BPA, or Minimum Required Amount, Is

• Age Amount

• Indicative Dollar Amount Shared by Spouse or Common-Law Partner

• Sum for a Qualified Relative

• In Canada, a Caregiver can receive a tax credit or an amount for their care.

• Number of Volunteer Firefighters

• Money Required by Prospective Homebuyers

• Costs Associated with Improving Residential Accessibility

• The Cost of Adoption

• Quantity of Disability Due to One's Own Condition

• Transferred Disability Benefits from a Family Member

• Spending Money on Education Loan Interest

• Costs of Schooling, Books, and Tuition

• Gifting Your Child's Tuition

• Treatment Costs That Can Be Reimbursed

• Gifts and Donations

• Tax credits at the provincial or territorial level

Benefit Amounts for COVID-19

While some pandemic-related deductions have been reinstated since 2021, the Canada Recovery Benefit (CRB) itself has been eliminated. Two options exist for deducting home-based business costs on your 2022 tax return. The first is a short-term, flat-rate strategy. Deductions of $2 per day are available if you worked from home more than half the time for four weeks or more. (You can spend as much as $500.) The government doesn't even need proof of purchase. Over $500 in expenses necessitate the more in-depth approach. You should ask your company for a T2200S form. In addition, documentation in the form of receipts will be required. Rent and internet or phone service are two examples of allowable outlays. Mortgage interest and office supplies aren't tax deductible, unfortunately.

Think about your tax filing strategy.

You've decided to file your taxes online, and now you need to learn the specifics of doing so. Tax returns can be submitted to the Canada Revenue Agency (CRA) in a number of different ways. (Filing in Quebec may require you to take certain additional steps. )

To file your taxes electronically, you must use tax software that has been approved for use with the NETFILE system (or, in Quebec, the Netfile system). (NETFILE is a service that allows you to file your taxes online and electronically transmit your income tax and benefit return to the CRA. ) These programs can often be used to file tax returns at no cost to the user.

If you have filed taxes with the CRA at least once since 2017, your data should be in their system and accessible through any NETFILE-approved tax program. If you have a CRA My Account, you should be able to use Auto-fill my return to automatically populate your tax information.

Bear in mind that not all tax preparation programs are approved for use with all years of tax returns. If you're looking for NETFILE-approved tax software, you can find a list of developers and the years they're approved for here.

Free and easy tax filing via the Internet

A number of options exist for filing Canadian tax returns without incurring any fees. In order to help you find NETFILE-approved software, we have provided some examples below. Some of these can be used for free, while others offer paid upgrades through in-app purchases:

If you qualify, you can have your taxes done at no cost at a free tax clinic. Appointments can be made in person or online at these clinics.

Online tax preparation

When you are ready to file your taxes online, you can do so by going to the website or app of your certified tax provider and creating an account by entering the following information:

• Name

• The SIN, or Social Insurance Number

• Birth Date:

• To what extent the return concerns the estate of a deceased person

• Favored tongue

• Where one lives

• It's a phone number

In some cases, the system may offer to automatically complete your tax return based on the account information you provide by displaying a prompt labeled "Auto-fill my return." It is from this screen that you will begin populating your personal finance details such as salary, housing costs, charitable contributions, and other deductions. In the event that the fields are empty

To file your taxes with the CRA once you've entered all the necessary data, you can connect directly to NETFILE (via your tax software), which will send your return to the CRA via electronic means. As soon as your return is received, you should be notified. You can now either call the CRA or log in to your "My Account" page online to see where your tax return is in the processing queue. At least one of these four laws needs to be included in your return:

• Assessed

• Proceeding (The CRA is currently reviewing your return)

• Incoming (not yet evaluated)

• Return status not updated (The CRA has not received your return or is still processing it). )