5 lifelines for tax time

Keeping your head above water in April is tough. Our tax expert explains how the CRA’s new online features help you deal with the slips, receipts and data needed to prepare personal tax returns.

If you’re drowning in tax data, you’ll be glad to hear that the Canada Revenue Agency (CRA) is casting some lifelines online this tax season to make it quicker and easier for Canadians and tax preparers to get information and file returns.

A host of new electronic service enhancements are part of the CRA’s strategy to provide completely digital service. More are coming later this year. As the CRA put it in a recent CPA Canada webinar, the goal is world-class service that’s “user-centric, secure and digital from beginning to end.”

We outline the main services and new features below. Our resident tax expert, Gabe Hayos, FCPA, FCA, CPA Canada’s vice-president, Taxation, weighs in on the take-aways.

LIFELINE 1: RETRIEVE YOUR DATA ONLINE


The CRA continues to add new features to My Account, the secure online portal that lets individuals track refunds, view or change returns, and check benefits and credit payments as well as RRSP limits.

New: As of February 2016, the tax data in My Account includes hard-to-track information such as T3 trust income slips and T5 investment income slips received by the CRA.

The Auto-fill my return function (formerly Tax Data Delivery) lets individuals and tax preparers who use NETFILE-certified software automatically fill in parts of T1 returns with tax information already on file with the CRA.

Take-away: “Having access to the data that the CRA has about you makes it much less likely you’ll overlook any income that you need to report,” says Hayos. “With changes like these, tax preparers can rest easy. The dreaded client shoebox of slips and receipts may soon be a relic of the past.”

LIFELINE 2: PAPERLESS COMMUNICATION


If you’re not doing so yet, cut paper clutter and sign up for the CRA’s secure online mail service so you can receive and view your correspondence in My Account. The CRA will notify you by email when there’s a new message in your account.

New: You can now get a wider range of documents into the CRA’s hands electronically via My Account. Through Submit documents online, you can send scanned versions of slips, receipts and other data that the CRA might request to back up your tax claims. Unsolicited documents — including online child benefits applications, voluntary disclosures and CPP/EI rulings — are also accepted.

Take-away: As the CRA expands the range of documents it accepts online, you’ll find it easier and more efficient to get your data in their hands. You can keep your originals because you’ll get confirmation and reference numbers to use when you communicate with the CRA in the future.

LIFELINE 3: GO MOBILE


With the MyCRA app, you can securely access and view key portions of your tax information such as your notice of assessment, tax return status, and benefits and credit information.

New: Handy features this tax season allow you to use the app to check your RRSP and TFSA contribution room, manage online mail, update your contact information, manage your direct deposits and request a proof of income statement.

Take-away: You’ll be able to get even more tax information anytime, anywhere on your tablet or smartphone.

LIFELINE 4: MANAGE PAYMENTS ONLINE


Signing up for the CRA’s direct deposit and electronic payment options allows you to streamline your tax payments, benefits and refunds. My Payment, for example, let’s you use a bank access card to pay your taxes online from your bank account. Electronic payments to the CRA are recognized on the date of payment or the following business day. (Payments made on weekends and statutory holidays are recognized on the following business day.)

To make sure your tax payments and instalments arrive on time, arrange for pre-authorized debit (PAD) though My Account. PADs are a simple, low-cost way to pay taxes, and you don’t have to go to a bank or mail a cheque. Signing a PAD only allows the CRA to withdraw the amount you choose, on the date you choose. No other CRA activity is permitted. Don’t forget to have enough funds in your account to cover your payments as they come due.

New: Despite rumours to the contrary, the CRA says it has no plans to make direct deposits mandatory for tax refunds and benefits payments. Taxpayers and benefits recipients can continue to receive and make payments by cheque in the foreseeable future.

Coming soon: Starting in July 2016, EFILE-registered tax preparers will be able to sign up their clients for the PAD option via EFILE software.

Take-away: Some taxpayers are leery of giving the CRA information about their bank accounts, but signing a PAD only allows the CRA to withdraw the amount you choose, on the date you choose. The agreement permits no other CRA activity. Online payments and pre-authorized debits help you to cut the risk of lost or missed tax payments and related interest and penalties.

LIFELINE 5: GET SIMPLER, EASIER-TO-UNDERSTAND INFORMATION


The CRA has tried to simplify the look and language of all of its forms and guidance to help Canadians understand their taxes better.

New: When you file a T1 in or after February 2016, you’ll receive a simplified notice of assessment. This year’s notices are clearly and cleanly organized so you can easily spot important information, including any taxes you owe or actions you need to take.

Coming soon: Simplified versions of benefits statements will be available in July 2016. Simplified notices of assessment for T2 and GST returns are coming in October 2016.

Take-away: These simplified notices are just the start. The CRA is working to put all of its forms and guides in a language and format that will make them much more reader-friendly for taxpayers and preparers.

Editor’s note

The next issue of Member News will land in your inbox on May 9, 2016.

Enjoy the issue and, as always, let us know what you think!

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