You're now at the point where your tax return is complete. Now what? If you've hired someone to prepare it for you, you have the option of e-filing your return. E-file is an automated system that allows approved electronic filers to electronically deliver individual income tax return information to the Canada Customs and Revenue Agency (CCRA). In 1999, more than 5.4 million people electronically transmitted their returns. This represents more than 26 percent of all the returns filed.
You can't e-file your tax return yourself. You must first have your return prepared by an approved electronic filer. Most businesses that offer tax preparation services are registered to e-file returns. Some e-file service providers may be willing to accept a return you've prepared on suitable computer software, but you may have to shop around.
What are the benefits of e-filing?
In this fast-paced world, nothing is good unless it's quick. (Except, of course, for some fast-food meals.) Most people like e-filing their return because they get their assessment and refunds faster. In fact, the wait is cut to two weeks from the usual four to six, if you're a procrastinator and file towards the end of April. If you're one of those who file in the middle of March, you may actually see your refund in just over a week! As well, since electronically transmitting your return saves the CCRA from having to manually input your data, it reduces the likelihood of data entry errors. Last but not least, e-filing saves you a stamp.
Who can e-file?
The majority of Canadian taxpayers can electronically transmit their return. People who can't e-file include non-residents, people who came to Canada during the year, people who have declared bankruptcy, and people who have to pay income tax to more than one province or territory.
Before your return can be e-filed, you must sign form T183, which basically gives the firm preparing your return authorization to e-file. There's no need to worry about getting the form yourself — your preparer will provide it for you.
Are my chances of audit lower if I e-file?
No. E-filed returns are selected for review using the same criteria as paper-filed returns. So if you're worried about an audit, don't think you can reduce your odds by e-filing your return. And if you don't like having any contact with the CCRA after you file your return other than a report card called the Notice of Assessment, then we don't suggest you e-file. You see, since no supporting documentation is sent to the CCRA when you e-file, the taxman may contact you asking for backup information for some of your claims. The most common requests are for medical and donation receipts. The CCRA tries to select only returns for which they think there is a higher probability of non-compliance, but this is not always the case. Don't panic, however, if you receive a request to send more information. It doesn't mean you're being audited.
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