Whether you are new to business or an old hand, you must know how to  file a tax return correctly and on time. It can be a daunting process for first timers, confronted with a stack of forms to fill in and not knowing where to start.  The Canada Revenue Agency will issue you with a tax pack, containing all of the forms you need to complete and a copy of their Business and Professional Income Guide.

Once you have completed the returns that are required they must be filed, on time and correctly in order to avoid penalties and interest accruing on your account.  There are 2 ways in which tax returns can be filed in Canada – by post (or hand delivered) or electronically. Whichever way you choose to do it, you must ensure that your returns are filed by the due dates.

Post or by hand are the traditional methods of filing your tax returns. However, if relying on the postal service you must always ensure that you post your returns a few days early to ensure they are received by the due date.  If your due date falls on a Saturday, Sunday or Public Holiday then the next business working day is deemed to be as on time.

Electronic filing is the newer and much preferred method these days.  It is a much quicker system, not having to remember to post the letter and waiting for it to be delivered, it’s also a lot more secure and, if you have any refunds due you will receive them far quicker by filing your tax return electronically.

E-File Online is one piece of software supplied by the Canadian Revenue Agency for electronic filing. There are 2 versions of it, including E-File Online Plus. Both support electronic tax return filing, although with the Plus version you can submit batches of returns, up to 30 in each batch.  You must use the E-File certified software in order to submit your returns in this manner. Acknowledgements are generated within a few hours for each return or batch of returns.

The other method of electronic tax return filing is Net File.  E-File is designed more for accountants and professional bodies who submit tax returns on behalf of their clients as well as for the corporate businesses whereas net file can only be used by individuals. Also, Net file can only be used to file T1 forms for individuals and not corporations.

To use Net file you must use certified software, must not be in bankruptcy, must not be submitting returns with an income from a business with a permanent address that is outside of your residential province or territory, must be a citizen of Canada and is not for use in amending a return that has already been submitted.

One other method of filing your tax return is Telefile – using a touch tone telephone. However, this is not for complicated tax returns, only for the more commonly used ones.

If you are confused about how to file a tax return, or need guidance on the CRA requirements for your business  please contact us today!