How to file your tax return using NETFILE
NETFILE is one of the Canada Revenue Agency (CRA) electronic tax-filing options. It allows you to file your personal income tax and benefit return directly to the CRA using the internet. Tax returns submitted through NETFILE must be prepared using CRA certified tax software. TurboTax and UFile are both CRA certified tax software.
What is NETFILE?
NETFILE streamlines the tax-filing process and offers the following benefits:
With direct deposit, you could receive your refund in as little as 8 business days, compared with 4 to 6 weeks for a paper return, although some exceptions apply.
Save on time, paper, and money
There's no need to mail a paper tax return and, best of all, NETFILE is free.
Secure and confidential
NETFILE uses 128-bit SSL encryption to keep data secure and confidential. This is the same security system used by banks.
With NETFILE, there is no need for the CRA to re-key information, as with paper returns, reducing the chance of errors.
Quick and easy to use
Just prepare your tax return using NETFILE certified software and follow the software's instructions to automatically file to the CRA using NETFILE. The CRA will immediately display a confirmation number as proof of receipt of the return. Keep this number for your files.
What is EFILE?
EFILE is an online CRA system that is used only by those who prepare and file income tax on the behalf of others, such as tax professionals. It is not used by individuals who are filing their personal tax returns.
What is the difference between NETFILE and EFILE?
NETFILE is for those people who prepare and submit their own tax returns, while EFILE is for tax professionals.
Tips for using CRA NETFILE:
Make sure your information is up to date.
Before you can file your tax return using NETFILE, the CRA must have your current name, address, and direct deposit information.
You cannot change this information through NETFILE. You can update your personal information using the My Account service.
NETFILE is available to most Canadians. There are a few exceptions to the kinds of returns that are eligible for NETFILE. Your software will tell you if your return cannot be filed using NETFILE. You may also check the CRA website for restrictions.
Find the CRA NETFILE certified software for you.
You must use a NETFILE certified tax software or web application to prepare your tax return. You may have to purchase this,
but a number of companies offer free use of their software or web application.
Once you receive your confirmation number the process is complete. Make sure to keep your confirmation number.
You'll receive a paper copy of your Notice of Assessment in the mail as usual.
How to maximize your tax return.
There are many ways to ensure you are getting the highest tax refund possible but the best way is to ensure you are using a quality tax software that can automatically perform calculations and that will transfer credits and deductions to reduce your taxes. Be sure to take notice of any "tax-saving ideas" your tax software may offer.
Most people use RRSPs to ease their tax burden. Maximize your RRSP tax advantages by investing up to your maximum contribution limit. However, be aware that going over your limit may result in owing taxes. Also, Canadians aged 18 years and older can deposit up to $5,000 each year into tax-free savings accounts to reduce their tax burden.
Also, if you're making a medical claim, make sure to claim all medical expenses for yourself, your spouse, and your dependents (under 18) on one tax return to maximize your family's claim. Don't forget that charitable deductions made with payroll deduction, and donations of goods and clothing are all deductible. And if you're self-employed, you are eligible for lots of tax deductions, such as business-related vehicle mileage, website fees, office supplies, and any expenses incurred in order to run your business.
What's the difference between TurboTax and UFile?
Both UFile and TurboTax make it quicker and easier to prepare your personal tax return, but there are some key differences between them.
TurboTax has 4 different versions, and each version has different sets of features. You can choose the right version for you, based on your situation: if you're filling out returns for multiple family members, if you're a property owner, if you have a small business, etc.
UFile is generally tailored towards personal returns for you and your family. It's available in 2 versions: UFile 4 provides 4 returns and UFile 12 gives you 12 returns. Both versions also include an additional 4 returns for modest-income taxpayers.