9.4.4 Tax software and services
Electronic tax packages
Almost 60 percent of Canadians filed electronic income tax returns in 2009, using both personal software and commercial tax services. With software systems, you complete the tax forms on your screen, produce a tax file and then use an Internet service to send in your file. There, it is assessed and treated as any other return, but it is handled much more quickly.
You must have an access code to use Netfile. The tax agencies will send your access code with your yearly tax package, or you can request one online. You cannot use Internet tax filing in certain other cases. For details, go to Canada Revenue Agency's information on Netfile or go to the Agence du Revenu du Québec information on Netfile Québec.
You can buy a tax program to install on your home computer or use an online service. Many different programs are available. Most use a simple question and answer process that makes it easy to understand and fill in the tax forms. Packages include all the official tax forms, a variety of calculators and advice in the form of videos and information pages. When selecting a tax software package, keep these points in mind:
- Not all packages are certified by the Canada Revenue Agency or the Agence du Revenu du Québec. Without certification, the packages cannot file returns electronically.
- From December to March in each year, the tax agencies review the packages submitted to them to ensure that they produce accurate results and meet filing standards. However, they do not certify that software meets consumer standards. Look for published software reviews.
- Some packages offer free returns for seniors, students or those with low income.
- Some packages are limited to a few returns, so they may not be able to file for a whole family.
- Some packages do not import tax data from prior years or from other programs. Those that can import data will save time and may offer more advanced tax advice.
- Tax preparation services specialize in filling out standard tax forms efficiently and at a low cost. Trained representatives can help you claim your tax refund and minimize your taxes, but they may offer only limited advice.
- Some tax services offer to pay you cash for your tax refund. These services may charge high fees for a refund you can get for free in just a few weeks.
- Accountants and bookkeepers can help you prepare your financial records so that you can see how best to arrange your affairs to minimize the taxes you pay. Tax accountants have specialized training to give you detailed advice and represent you in any issues before the tax agency, but their professional fees are high.
- Financial planners advise you on how to arrange your personal finances to meet your goals, and many of them are trained to offer expert tax advice, especially on issues such as investments. Their advice often covers a wider range of topics than that of tax specialists, and the cost of their tax advice will be included in their overall fees.
Consider your tax advice needs and interview several people to see who is the best advisor for you. A good tax advisor for one person may not be the best for another. Your tax advisor can only be effective if she or he knows your situation, so answer any questions completely. Ask questions about anything you think needs more discussion.
As with any other financial advisor, check the experience, training and references of a tax advisor. Some are certified by professional associations. Some have extensive tax training. Ask friends or others who have used tax services to recommend a good tax advisor.
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