5 Reasons to File Your Canadian Tax Return Using NETFILE

Filing taxes can seem like a cumbersome task, especially when you’re trying to gather and sort through stacks of paperwork while reading and trying to comprehend complex tax rules and reporting instructions. The Canada Revenue Agency (CRA) has made this process a little simpler and a lot faster through NETFILE, a secure electronic tax filing service. It allows Canadian taxpayers to submit their initial T1 personal income tax returns going back to the 2017 tax year directly to the CRA online. Here’s a look at five reasons why using NETFILE to file your Canadian tax return is a smart decision.

The Efficiency of Filing Your Taxes With NETFILE

The introduction in 1993 of the NETFILE tax return system marked a significant step towards simplifying the tax filing process for Canadian taxpayers and the CRA alike. One of the primary benefits of NETFILE is its efficiency. Traditionally, filing a tax return involved manually completing forms and mailing them to the CRA, a process that could take weeks or months.

With NETFILE, however, filing is instantaneous. Once you submit your return, it’s received and acknowledged by the CRA immediately, eliminating the waiting time associated with mailing large tax packages. You do not have to mail in supporting documentation unless asked, but you must keep these records for at least six years.

This efficiency not only saves time but also speeds up the assessment process, meaning you can receive any refund owed to you much faster. With direct deposit this can be as little as two weeks. It’s important to note that NETFILE is a service that only delivers digital tax returns completed using approved software programs, many of which are available for free.

Accuracy and Security

Another significant advantage of using NETFILE is the reduction in errors. Manual tax reporting is susceptible to human error, from incorrect calculations to misunderstood instructions. Certified NETFILE software, on the other hand, often comes with built-in calculators and programming that detects common errors, increasing the chances that your tax return is accurate.

Furthermore, the CRA has robust security measures in place to protect your personal and financial information once they receive it. They do issue a disclaimer, however, that tax filing software and sites that host them are not a part of their security systems, so always follow proper data security practices. You are required to provide information that validates your identity when using NETFILE. Using your NETFILE access code (located in the upper-right corner of your last Notice of Assessment), you can use information from that NOA for verification.

Convenience and Accessibility

NETFILE is generally accessible for e-filing your tax returns between mid-February and the end of January of the following year. The service is available  21 hours a day with daily maintenance taking place between 3 am and 6 am EST. This allows you to file your taxes from anywhere you have a secure internet connection.

Also for your convenience, and to further expedite completing your federal tax return and corresponding provincial schedule (outside of Quebec), using the “Auto-fill my return” option in the software prepopulates your return with information already provided to the CRA on your behalf. This includes info from tax documents such as T4s and T4RSPs and information from non-tax documents like your Lifelong Learning Plan (LLP) required repayment. The full list is here.

Cost-Effectiveness

As stated earlier, you can find free and pay-what-you-can versions of CRA-certified tax-reporting software. You can use these savings to consult a licensed tax professional for expert advice that can maximize your deductions and credits and tax planning that can reduce your tax bill moving forward.

Environmental Impact

Choosing to file your tax return electronically through NETFILE significantly reduces the need for paper, which saves trees and decreases the carbon footprint associated with producing and transporting paper forms. By opting for electronic filing, you are contributing to a more sustainable and environmentally-friendly tax filing process.

In Conclusion

NETFILE provides a convenient and expedited tax reporting process. Embracing it not only simplifies your tax filing experience but also aligns with modern practices that prioritize efficiency, security, and sustainability.