One of the Canada Revenue Agency’s goals is to move taxpayers towards electronic filing. Filing electronically makes processing easier and cuts down on the cost of handling a tax return.
The CRA stopped mailing 2012 paper forms to taxpayers who had filed via paper the year before. Paper tax packages could still be found at Service Canada offices and post offices but they no longer came to your door unless you called the CRA and requested one.
Third-party preparers were also encouraged to file their client returns electronically. Any preparer who filed 10 or more 2012 tax returns had to file online or faced a $25 charge per return.
At the same time, the CRA also allowed taxpayers to use NETFILE without a special access code. Instead, a Social Insurance Number and Date of Birth were the only pieces of information required to file your return using NETFILE. First-time filers who were Canadian residents all year were also allowed to use NETFILE in 2012, rather than having to use paper to file.
The changes seemed to have worked, as 76 per cent of Canadians filed their 2012 tax returns electronically. Paper filing dropped almost 30 per cent when compared to 2011 tax filing. This is good news for the CRA as it looks to streamline the tax filing process.
Canadians are also continuing to sign up for My Account, which provides access to their tax information online. The service allows you to make changes to previous tax returns, shows your RRSP and TFSA contribution limits and offers other useful information.
If you were one of the 6.2 million Canadians who filed via paper last year, the CRA will probably have more up their sleeve next year. The goal is to move everyone possible to electronic filing.
And this will include payments. Revenu Quebec was the first to introduce a new tax benefit – Solidarity Tax Credit – that is only payable via direct deposit. As the CRA continues to look for savings in the future, moving everyone to direct deposit will cut down on printing cheques and postage.
Some people are truly uncomfortable with online filing methods, and for them the CRA will continue to offer a paper-based process. But if you are one of the 24 per cent of Canadians who used paper for your 2012 return, consider moving online for 2013. It can often be easier than using a pen and paper, and you can expect the CRA will continue to encourage you to move to electronic filing.