Wondering how to speed up your next CRA tax return? If you're looking for shortcuts on how to file quickly or want to speed up your CRA tax refund, this article has got you covered.
How to speed up CRA taxes
Whether you're self-employed, a small business owner, or work in-house or freelance for a company, your income tax return is handled by the Canada Revenue Agency. After you file your income tax return, the CRA will issue your notice of assessment (NOA) along with your refund (if you have one). You will most likely receive your NOA within two weeks of filing electronically and within eight weeks of filing a paper return. From this perspective, an electronic filing could speed up your tax return by around six weeks.
How to file a CRA tax return electronically
According to the CRA, 90% of Canadians filed their taxes electronically last year. Contrary to what some people might think, online filing is fast, easy, and secure. Most Canadians are eligible to file an electronic tax return. Be aware that tax returns for years before 2014 are subject to restrictions. If you are submitting a late tax return for a year other than 2014, 2015 or 2016, you will need to send the CRA a paper return. Canadians who filed for bankruptcy in 2017 or 2018 are also required to present a paper return. The same is true for non-residents of Canada.
Certified CRA NETFILE software
The easiest way to file your taxes online is to use tax preparation software such as TurboTax, Ufile, or Simple Tax. For a complete list of available NETFILE-certified tax preparation products, consult the CRA list. The great thing about tax preparation software is that most allow you to obtain an Express NOA. This service lets you view your NOA as soon as your return has been received and processed by the CRA. To use Express NOA, you need to:
Use NETFILE-certified software that supports the Express NOA service.
When using certified software, you can also benefit from CRA's Auto-fill my return service. This service automatically retrieves information that the CRA has on file for you at the time of your return, including the following tax slips:
T3, Statement of Trust Income Allocations and Designations
T4, Statement of Remuneration Paid
T4A, Statement of Pension, Retirement, Annuity, and Other Income
T4A(OAS), Statement of Old Age Security
T4A(P), Statement of Canada Pension Plan Benefits
T4E, Statement of Employment Insurance and Other Benefits
T4RIF, Statement of Income from a Registered Retirement Income Fund
T4RSP, Statement of Registered Retirement Savings Plan Income
T5, Statement of Investment Income
T5007, Statement of Benefits
T5008, Statement of Securities Transactions
RC62, Universal Child Care Benefit Statement
RC210, Working Income Tax Benefit Advance Payments Statement
Registered retirement savings plan contribution receipt
PRPP, Pooled registered pension plan
T1204, Government Service Contract Payments
RENT ASSIST.
By mid-March, the CRA should have received all of last year's information. Auto-fill my return will also work if you are filing tax documents for 2015 or 2016. Make sure to verify that all data is correct before you process your return. CRA-certified tax preparation software doesn't mean you aren't responsible for submitting an accurate return.
How to file a paper return
There are several ways to file a paper tax return in Canada. One involves using tax preparation software. Whether you elect to work online or use desktop software, go through all of the prompts and fill in your information as the software calculates everything for you. If you don't want to file online, you can print your tax return as generated by the software and mail it to the CRA. You can also do things the traditional way by putting pen to paper. To do this, you'll need your CRA tax forms, which are available from most Canada Post, Service Canada, and Caisse Populaire Desjardins locations. The official documents are also available online. Taxpayers may want to note that as of 2019, these forms will no longer be available from the service providers mentioned above. However, if you filed a paper return last year, you should receive a copy of the Income Tax and Benefits Guide and forms book through the mail.
If the thought of doing your taxes fills you with dread, you can always consult a tax preparation professional. Those who have complicated taxes to file should consider hiring an accountant or CPA. In the eyes of the CRA, you may want to do this if you:
Are self-employed or have employment expenses;
Have a business or rental income and expenses;
Have capital gains or losses;
Filed for bankruptcy in the last two years;
Are completing a tax return for a deceased person.
On the other hand, if you have a modest income and a simple tax situation, you may be eligible for free help through a tax preparation clinic near you. The Community Volunteer Income Tax Program (CVITP) offers helpful clinics for those who require some assistance preparing their tax filing. A modest income is considered to be:
Less than $30,000 for a single person;
Below $40,000 for two people;
Lower than $42,500 for three people;
Less than $45,000 for four people (add $2,500 for each additional individual for households of five or more people).
Simple tax situations fall into this category if you have no income or if your income stems from the following sources:
Regular employment;
Pension earnings;
Government benefits such as the Canada Pension Plan, disability payments, employment insurance, or social assistance;
Registered retirement savings plans (RRSPs);
Support payments (i.e., child support or spousal support);
Scholarships, fellowships, bursaries or grants;
Interest (under $1,000).
What happens if you make a mistake on your CRA tax return?
If you make a mistake on your tax return, you can make adjustments using CRA's ReFile service. Adjustments using ReFile are available with any NETFILE-certified tax software. If you did not use tax software to file your return, you would need to fill out Form T1-ADJ, T1 Adjustment Request and mail it to the CRA. Because of the self-assessment Canada tax system, it is your responsibility to ensure that the information you submit is complete and accurate. While mistakes do happen, sometimes a slip can get lost in the mail. If you make a mistake on your return, such as by not declaring a portion of your employment income, the CRA is likely to discover this through one of its review programs. Small mistakes will result in a reassessment. If you wind up owing more, interest and penalties may apply. Numerous discrepancies could alert the CRA to fraud on your end. If you consistently fail to report income and the CRA catches you through one of its review programs, you could be at high risk for an audit. On the other hand, mistakes can also be in the CRA's favour. If you realize there is a credit or deduction you haven't been claiming, you can go as far back as ten years to recoup amounts you overpaid on your taxes.
Additional tips and tricks
Here are a few more tips and tricks you can use to streamline your Canadian income tax return.
Know what you owe
Unsure of how much money you should set aside to foot your tax bill? Use an online tax calculator to figure out what you will owe based on your income. We like this one from SimpleTax since it accounts for self-employment income. For example, if you are on track to make $50,000 in self-employment income in Ontario and contribute $5,000 to your RRSP, you would owe $10,914 in taxes before claiming any business deductions. Based on this exercise, you can divide your estimated amount owing by 12 months. Consider making a monthly deposit into a tax-free savings account (TFSA). This way, you will have more than enough money to pay your balance owing at the end of the year. Ideally, you will be able to claim additional deductions to reduce your tax burden. With enough luck, this strategy will leave you with the extra money you can put towards a vacation, instead of scrambling to make your tax payments when they are due.
Get organized
Keep a record of your business expenses in a spreadsheet or use online accounting software like Quickbooks or Freshbooks. Your expenses will be so much easier to claim if you don't have to compile them all in one day. The same is true for invoices.
Register for direct deposit
Registering for direct deposit can help speed up your CRA tax return since you won't have to wait for your refund check to reach you through the mail. The easiest way to register for direct deposit is through CRA's My Account service. Among other things, you can also use My Account to track your refund, check your credit and benefit payments, and view your RRSP limit. If you are a Caisse Populaire Desjardins or TD Canada Trust member, you can also sign up for direct deposit in person, at your bank. Watch for other financial institutions offer this service in the near future. All in all, if you are looking to speed up the tax return process, technology is your best friend. From using tax preparation software to tracking your invoices and expenses with accounting software to registering for direct deposit, doing your taxes has never been easier. Here's to getting this year's taxes done as fast as possible!
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