The Internet is a great painkiller for all your tax headaches.
The various tools available on-line won't pay your income tax bill for you but they will make the process of completing your tax return as simple and expeditious as it's ever going to be.
You can fill out your tax return on-line and file it to the Canada Customs and Revenue Agency over the Internet as well. The Internet is also a great resource for finding answers to all your tax-planning questions.
The key to getting the most out of on-line tax tools is knowing where to go so that you don't waste time mucking about in the vast expanse of information.
To start, there are three or so different options for completing your tax return on-line and then filing it to CCRA through its Netfile program. The usual drill requires you to fill out a tax form using a secure Web site that keeps your data private, then pay by supplying a credit card number.
QuickTax and TaxWiz, the leading tax software programs, offer on-line versions of their product at http://www.quicktaxweb.ca and http://www.taxwiz.ca. QuickTaxWeb charges $19.95 for a single return and $24.95 for an individual and spouse, while TaxWiz On-line charges $12.95 for each return. As a special promotion, QuickTaxWeb's service is free to those who don't qualify for a tax refund.
Another option is UFile.ca at http://www.ufile.ca, which charges $12.95 for one return and an extra $7 for a spouse.
Worried that doing your taxes on-line opens you to the risk that someone will read and possibly exploit your private information? Relax. Each of these on-line tax-filing Web sites uses what techies call 128-bit encryption, which is a hard-to-crack method of scrambling data so that hackers can't get access to it. This applies when you're sending your data over the Internet and when your personal information is stored on the Web site of the tax-filing service.
If you're using an older Web browser that has weaker 40-bit encryption, you should easily be able to download a more up-to-date, 128-bit version over the Internet at no cost. Netscape users should go to http://www.netscape.com, while Microsoft Internet Explorer users should go to http://www.microsoft.com/windows/ie/default.asp.
No matter which on-line tax filing service you use, check to make sure it has been certified by CCRA for its Netfile program. Using Netfile means you should have any refund in about two weeks as opposed to a wait of as long as eight weeks if you file your taxes near the April 30 deadline.
You'll need a CCRA-supplied access number to use Netfile. If you haven't received one from CCRA, call 1-800-714-7257. For more information on Netfile, visit http://www.netfile.gc.ca.
You won't send in any tax slips to CCRA when you submit your return via Netfile. Keep them handy, though, because the tax people can always contact you for verification of details on your return.
Some people have taken this to mean that you're more likely to be audited if you use Netfile, but CCRA insists that there's no difference in the treatment of electronic and paper tax returns.
If you like the idea of Netfile but aren't comfortable with the idea of doing your taxes on-line, consider the compact disc versions of QuickTax and TaxWiz, both of which are now owned by Edmonton-based Intuit Canada Ltd.
QuickTax Standard, at $29.95 for six family-member returns after a $10 mail-in rebate, is the best all-around choice from a usability point of view while TaxWiz is the less expensive choice at $24.95 for six returns.
Note also that QuickTax has new $59.95 versions out this year for small business, investors and those people who are approaching or in retirement, plus a $79.95 platinum version that combines each of these three products.
Another software option is Mytaxexpress at http://www.mytaxexpress.com, which you download from the Internet at a cost of $12.99 for 10 returns, tax included (tax is not usually included in quoted prices). Note that Mytaxexpress supports tax returns for residents of Ontario, Alberta and British Columbia only.
Anyone with a straightforward return should take a look at GriffTax Simple, which you download at no cost at http://www.grifftax.ca. The only cost is a $5 charge for sending your return to CCRA via Netfile. The limitation of GriffTax Simple is that it process only returns with nothing more complex than T4 and interest income, as well as contributions to registered retirement savings plans, charitable donations and medical expenses.
A good way to enhance the convenience of electronic tax filing is to pay any taxes you might owe through your financial institution's on-line banking service. Choose CCRA as the payee and be sure to select April 30 or earlier for the payment to be made.
If you're expecting a refund, you can speed things up by having the money deposited directly to your bank account. If you're submitting your taxes on-line with on-line tax filing services like QuickTaxWeb and Ufile, you should be able to set this up before you file. As an alternative, you can obtain a T1-DD(1) direct deposit request form and submit it to CCRA.
The CCRA Web site at http://www.ccra-adrc.gc.ca is a useful resource not just for downloading such tax forms, but also for getting answers to both general and specific tax questions. There's also a service that will let you check the status of your tax refund on-line.
For a quick estimate of whether you'll owe Canada Revenue or receive a refund, try the 2002 tax calculator offered by Fidelity Investments in the tools area of its investor centre at http://www.fidelity.ca. This calculator is noteworthy because it processes the three types of investment income -- interest, capital gains and dividends -- and because it offers results tailored for residents of each province.
If you just want to know your marginal tax rate, try a calculator offered on Globeinvestor.com's Tax Centre at http://www.globeinvestor.com. You'll also find dozens of tax-related articles from the The Globe and Mail, general tax tips and other resources.
A few other worthwhile on-line tax resources are:
Tax expert Tim Cestnick's Web site at http://www.timcestnick.com. Mr. Cestnick, a financial adviser, Globe contributor and author of Winning the Tax Game 2003, offers tax calculators, an on-line tax discussion forum and audio and video clips with tax advice. He also answers questions from individuals.
The Tax Centre on H&R Block's Canadian Web site at http://www.hrblock.ca. This site offers a handy list of all major changes for the 2002 tax year. There's also a data base of answers to frequently asked tax questions categorized by topic headings like medical expenses, starting your own business and support payments.
MSN Money at money.msn.ca. The "taxes" section of this site, found under the Planning banner, contains a motherlode of tax-related articles by personal finance experts and a good selection of tools.
© The Globe and Mail
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