Estimated reading time: 8 minutes
Learn how I went from being clueless about Canadian tax returns to filing my income tax return for free. Discover simple ways to file your taxes in Canada.
Everyone Has To File A Tax Return
It’s that time again to file your Income tax return in Canada, and there are several simple ways to do that.
Today, I want to take you on my journey from being new to Canada and not understanding tax time and spending money to file to filing my tax return for free.
Income Tax Return season is like a 4 letter word for all Canadians but also a busy time because it’s not something we choose to do.
It’s something we must do.
My New Home Country- Canada
When I moved to Canada from the UK, I had no idea about Canadian Income Tax and how it worked.
Like many other permanent residents or immigrants, I had to research life in Canada, and filing a tax return was somewhat part of the process.
What I mean by that is when you move to a new country, learning it from the bottom up can be overwhelming, especially if you don’t speak English well.
Most people want to work and make money and worry about what comes after at a later date.
During my first years in Canada, I returned to school to gain skills to find a career path in Canada, which meant I could write off lots of education-related expenses.
Years ago, when Mrs. CBB and I had to file our income tax return, we would visit a Scottish gentleman (Mr. Accountant) in our city, and that is where I started to learn.
I learned over two years of filing a tax return with him that there were many ways to file your tax return in Canada, not just with an accountant.
Thankfully, we didn’t have to wait for an income tax return cheque in the mail because we set up direct deposit into our bank account.
Below is the 2018 CRA showing cheque returns were over 5 million and direct deposits were slightly over 11 million.
| Refund by cheque | 5,153,435 | $9,077,655,636 | $1,761 | 31% |
| Refund by direct deposit | 11,606,641 | $20,555,077,435 | $1,771 | 69% |
Costs To File A Tax Return In Canada
Mr. Accountant charged us shy of $100 each to file our income tax return, which I thought was the norm until I did more research.
Most of my research led me to Kijiji, online ads, and tax software such as Turbo Tax, a popular software in Canada.
Be Careful With Personal Information
There was a lady who posted an online Kijiji ad who would file tax returns for $15, and we were in awe of how cheap it was.
In hindsight, we should have done more research.
Handing out personal information to a woman who claimed to do tax returns was irresponsible.
We didn’t know enough about her, although the low price to file a tax return for her meant she was swamped with customers.
Consequently, better options exist for filing your income tax return in Canada.
Going with the cheapest person around isn’t necessarily the best option.
Before hiring someone through an online ad, do your research first.
Some random people can buy tax return packages and file your tax return for you with little to no costs involved.
Providing your social insurance number and other personal information to a stranger leaves you vulnerable to identity theft.
Are they legit, or are they trying to make extra money?
Stay away from sketchy or unknown individuals, as there are other options.
We went from paying $100 each to file our tax returns to $15 with a random lady from Kijiji.
Never again.
Alternate Ways To File Our Tax Return
There had to be a better way to file our tax return in Canada, so I took over and said, I’m doing it myself.
First, I needed to know how to file our income tax return.
There were a few ways, but I didn’t get down to the nitty-gritty of it without research.
Using Tax Software
I started filing our tax return journey using Turbo Tax, which we purchased at Zehrs for just over $20 years ago.
UFile is another popular income tax software that is available and relatively easy to understand.
What I liked about Turbo Tax and UFile was that they walked me through the process without glitches.
Most newcomers to Canada have little knowledge about the tax system, and using software was very helpful at first.
From 2015 to 2019, I set up a MY Account for Individuals with the CRA and filed an electronic tax return for Mrs. CBB and me for two reasons.
- Easy
- It’s FREE
If it’s free, I’m right in there, but filing an income tax return for many Canadians can be challenging and not something you want to mess up.
Electronic Tax Software Availability
Typically, by mid-February, the Canada Revenue Agency opens up the electronic tax return system so Canadians can get a head start on filing their taxes.
In 2018 alone, over 25 million Canadians filed their income tax return electronically, and just under 4 million filed via paper.
Total returns received from 2018-02-12 to 2019-01-25
Canadian 2018 Income Tax Season: Your Questions Answered
| Filing method | Number of returns | Percentage of total |
|---|---|---|
| EFILE | 17,065,710 | 57.3% |
| NETFILE | 8,748,033 | 29.4% |
| File my Return (FMR) | 47,196 | 0.1% |
| Total – electronic | 25,860,939 | 86.8% |
| Paper | 3,923,564 | 13.2% |
| Total – all methods | 29,784,503 | 100% |
This is great for us because I do it all myself, and frankly, it’s fairly simple as long as you follow the process and are prepared with all the documents you need beforehand.
Electronic Tax Return filing methods
Below are the electronic ways your income tax return can be submitted to the Canada Revenue Agency.
EFILE
This is a service for authorized EFILE service providers to file income tax returns on your behalf.
So, when we went to Mr. Accountant, we brought folders with our documents and paid him a fee of $100 each. This is how he filed our tax return.
Netfile
Netfile is the current tax return program that we use to file our income tax with the CRA, and it’s super easy to use.
What I like about NetFile is that there is no paper involved, no mailing, less waiting for a tax return, secure and filing is direct.
Netfile cannot be used by tax preparers and not everyone is eligible to use Netfile as it comes with restrictions.
If you went bankrupt or are a non-resident Canada you may not be eligible to use Netfile in Canada.
The NETFILE program is now open for the electronic filing of your 2015, 2016, 2017, and 2018 T1 personal income tax and benefit return.
The NETFILE service will be open until Friday, January 24, 2020.
By Phone Tax Return
File My Return (FMR) is a newer free income tax filing service offered by the CRA, targeting low-income or fixed-income Canadians.
This service will be perfect for my mother-in-law whose spouse passed away last year and she is now collecting government benefits.
The CRA will send a letter to eligible participants by mid-February, but if you don’t qualify, you don’t get a letter, you don’t qualify.
At the beginning of the call, the CRA will verify your eligibility when filing by phone.
If you are eligible all you do is make a phone call and answer questions by a secure free automated service and you’re done.
The phone service runs 21 hours a day and participants can start filing the process as of February 18, 2019.
Individuals with questions about the File My Return service can call the CRA’s individual tax inquiries line at 1-800-959-8281.
Paper Tax Return
The pencil method of filing your tax return still exists and if you filed by paper the previous year the CRA will send you a new all-in-one package by February 11, 2019.
This is a service, so you don’t have to find a package or order a paper income tax package.
You can also call to order if you haven’t received a package or download the package free online.
- 1-855-330-3305 (for service in English)
- 1-855-330-3310 (for service in French) (for service in French)
The new all-in-one income tax return package will include:
Free Tax Return Clinic
If none of the above appeals or applies to you, perhaps searching your community for free tax return clinics you can visit for help may suffice.
You can find a free tax clinic where you can submit your tax return if you have a simple or oneodest income.
Modest meaning 1 person total family income of $35,000, 2 person $45,000, 3 person $47,500 and so on or a simple return from the following tax sources.
- employment
- pension
- benefits such as Canada Pension Plan, disability, employment insurance, social assistance
- registered retirement savings plans (RRSP’s)
- support payments
- scholarships, fellowships, bursaries, or grants
- interest (under $1,000)
Other Important Tax Information
Trans Union Canada is another excellent source for finding your credit score and getting your credit report.
As you can see, there is no shortage of ways you can file your income tax return in Canada, and the faster you do it, the quicker you get a return if you’re eligible.
Discussion: How do you typically file your tax return in Canada?
Please Leave me a comment below.
Thanks for reading,
Mr. CBB
Mr. CBB, my husband and I have an accountant file our returns. I used to use the paper method but, the last time I tried (a number of years ago), after preparing this schedule and that schedule – and not really being certain if I needed to prepare them – I developed a raging headache and decided it was cheaper in the long run to have our returns done professionally. Yes, it is expensive but when you factor in WorkSafe benefits, OAS, CPP and disability benefits, it’s important to get it right. I still have fantasies of one day doing my own darned taxes but, then again, I also have fantasies of being able to fit into that too-small dress sitting in my closet. (Sigh)
Thanks for the care you take and the information provided! Just so you know, I’m going to try that Italian Rapini recipe in your previous post. Maybe it will help me fit in that dress. ?
Hi Judy,
Thanks for your comment. You know for many people it’s far easier to pay the money to get their income tax returns done professionally instead of stress and headaches. I know my mother-in-law paid a bit to get theirs done each year but it was best that way. There’s no point in making mistakes if you’re not confident in the process. I was terrified but eventually got it right. I’m certainly not an accountant and never will be but I don’t mind taking the time to learn. You will LOVE the rapini more than spinach trust me but sadly the price right now is a bit costly. I like to buy it at around $1.99 but it’s upwards of $4. If you see it on sale buying 3 bunches is a good amount. Let me know how it goes! You can also make the rapini, add butter and ricotta to pasta and then mix in the rapini topped with parmigiano. O. M. G so good!! Now I”m hungry. Mr. CBB
I used to use Turbo Tax until the pricing got ridiculous– $120–if you had side business income.
I now use UFILE which is about $20 for 4 returns and includes business income. It also walks you through the steps or you can use the forms method if you prefer.
Doing in a return just on paper alone: such a hassle.