Filing your taxes online has never been easier with the many tax software available to Canadians. Not only that but these days you can also complete your online tax return for free or very cheap.
Basically, unless your tax situation is complicated or you run a sizeable business, you can safely say “adieu” to your accountant and not lose out on any tax deductions or credits.
So far, for the 2019 tax filing season, 88.5% of Canadians filed an electronic income tax and benefit return, with 58% utilizing EFILE, 30.3% using NETFILE and 0.2% using the File My Return Service.
Update: The tax return filing deadline for the 2019 tax year has been pushed to June 1, 2020 (from April 30, 2020). Canadians can also defer payments of their income taxes owed until after August 31, 2020, without interest or penalties.
How To File Your Taxes Online in Canada
There are two main ways to file your taxes online in Canada i.e. using NETFILE or EFILE.
NETFILE is an online transmission service provided by the Canada Revenue Agency (CRA) for individual filers to send in their tax returns without needing the paper tax forms.
In order to prepare your online tax return using NETFILE, you must use a CRA-certified tax preparation software such as TurboTax and several others.
Tax return submissions through NETFILE go directly to the CRA in a secure format.
EFILE is an electronic submission service used by tax preparers to transmit your income tax return information to the CRA.
If you are not comfortable with using NETFILE or have a complicated tax return and require professional help, an accountant or tax preparation firm can use EFILE to file your tax return for a fee.
Starting in 2018, CRA now offers a “File My Return” service that lower-income Canadians can use to file their income tax and benefit return for free.
Individuals who qualify for this service receive an invitation letter in February with instructions on how to proceed. For questions relating to using File My Return, call CRA at 1-800-959-8281.
Free Tax Software in Canada
Here are some of the tax software certified by the CRA for NETFILE tax return submissions. They all offer free options to file your taxes and some have paid versions as well.
Typically, the free version can handle most tax situations. However, the software provider may have restrictions based on your income level and there may be limited to no phone or email support available.
My general advice is that if you are in doubt, start with the free version and only upgrade if required.
1. TurboTax Free
TurboTax is the most popular online tax return software in Canada.
While TurboTax offers a free, standard, premium and self-employed versions of their software, the free version covers all the main basis and is recommended for simple tax returns.
You can use TurboTax on any device including smartphones.
Here’s what you get with the free TurboTax software:
- Up to 20 free returns per year.
- Auto-fill My Return compatibility which imports your tax information directly from the CRA.
- Maximum refund guarantee. They pay you $9.99 if you get a larger refund or smaller tax due by using any other tax method.
- 100% accuracy guarantee or they will repay any penalties caused by a TurboTax calculation.
- Instant access to your notice of assessment after submitting your return using NETFILE.
- They offer REFILE if you need to make adjustments to your return.
- TLS encryption to secure your personal information.
- It is available in Quebec.
The free version does not offer phone support with one of their tax specialists, however, you can find answers to your question using their free online community.
If you need to use a paid version of TurboTax (e.g. Standard service for $19.99), you can get a 15% discount here.
Read my complete TurboTax review.
SimpleTax is a Canadian software that offers a “pay what you want” model for filing your tax return. SimpleTax was founded in 2012 and was acquired by the popular robo-advisor, Wealthsimple, in 2019.
SimpleTax offers only one main product i.e. there are no tiers in the service you get.
After you have submitted your return to CRA, they ask you to support them to the tune of $0, $9, $19, $34 or $49. What you pay is totally up to you.
Here are some of the benefits they offer:
- Easy-to-use online tax software.
- Step-by-step guidance and a 100% accuracy guarantee.
- Maximum refund using their refund optimizer and get your refund in as little as 8 days via direct deposit.
- Encryption to secure your private information.
- CRA-certified with Auto-fill My Return compatibility.
- Choose how much you pay.
- Up to 20 returns per account.
3. uFile Free
uFile is an income tax return software you can directly access online using a Windows or Mac computer, tablet and smartphone. They also have a Windows version that requires you to download and install the program on your computer.
uFile is available free of charge to students regardless of their income. This free service is offered through its partnership with the Canadian Federation of Students.
The tax software is also available for free if you are:
- Filing a simple tax return i.e. you are reporting only one employment income or pension income (OAS or CPP).
- A newcomer fo Canada and are filing your first federal tax return.
- A low-income taxpayer with a total family income that is less than $20,000.
The paid uFile tax service starts at $19.95.
Similar to the other tax software on this list, uFile also offers:
- Guaranteed Accuracy and tax results
It is NETFILE-certified and is available in Quebec.
StudioTax is a free income tax program that is available on Windows and Mac.
After installing the program on your computer, you can file your taxes using NETFILE. It supports the Auto-fill My Return feature and Express Notice of Assessment.
StudioTax is not available on smartphones or tablets.
The program is 100% free, however, you can make a contribution if you’d like to support them.
Some of the highlights of StudioTax are :
- It does not need to connect to the internet to perform its main functions – your name, email, online account or credit card details are not required.
- It is NETFILE-certified.
- It allows for both simple and complex returns.
- Up to 20 returns per year.
- No income restrictions.
- Available in Quebec.
If you are looking to complete a simple non-business tax return, you can do so using CloudTax.
CloudTax was founded by Nimalan Balachandran and the tax software is certified by the Canada Revenue Agency.
They offer a free service (CloudTax Free) and a paid service (CloudTax Pro).
For the free service, you get:
- Auto-fill My Return.
- Unlimited chat support.
- The ability to access the platform via the web and mobile (iOS and Android).
- Encryption to secure your data.
- Online tax return storage.
- Optional audit protection for $2.99/month.
CloudTax is currently not available to residents of Quebec, Yukon, the Northwest Territories and Nunavut.
GenuTax is a NETFILE-certified tax software that is only available as an installation file on Windows computers.
It is free to use and handles most tax scenarios. They request a voluntary donation to support the company.
Limited customer service is available through email and you can prepare up to 20 tax returns every year.
AdvTax is provided by Aclasssoft Inc. The tax return software is available using your smartphone, tablet or computer. The program supports multiple languages including English, French and Chinese.
It is also:
- Easy-to-use. As per their website, it should take you about 5 minutes to complete your tax return.
Filing Your Taxes Return Online
A majority of Canadians can generally file their tax returns electronically. Some instances where a NETFILE submission is restricted are if you:
- Are filing a tax return for a taxation year before 2015
- Are a non-resident of Canada and/or your address is outside of Canada
- Became bankrupt within the two years before your tax filing
- Are filing a tax return for a deceased person
- Need to change your name
- Are filing an amended return
- Your social insurance number begins with 08 or 09
You can check out other NETFILE restrictions here.
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Benefits of Filing Your Taxes Online Using a Tax Software
The benefits of filing your taxes online as opposed to completing the paper forms and mailing to CRA are:
A. Faster Refunds: Electronic submissions result in faster refunds…often in as few as 8 business days.
B. User-friendly: Online tax software are generally user-friendly and they guide you through the process so you don’t need to be a tax expert to file your own return. They also keep your previous tax returns on file for several years, making it easy to retrieve them if needed.
C. Cheaper: Compared to the cost of an accountant helping you out, online tax software can be free or much cheaper.
D. Improved Accuracy: NETFILE-certified tax software can use the Auto-fill My Return service which automatically fills part of your tax return. Combine this with the “accuracy guarantee” and automatic calculations provided by the software, and your chances of submitting an accurate return increases.
If you plan to file your taxes electronically, ensure that the tax software is:
- Certified by the CRA
- Has adequate security in place to protect your personal information
- Easy to use and compatible with your devices
- Affordable or free