Filing your tax return is finally catching up to all the other financial transactions that have been made less tedious and troublesome by the internet.
The Canada Revenue Agency has in the past four years introduced a range of electronic options to simplify and modernize the filing and monitoring of tax returns by individuals. CRA statistics supplied to The Globe and Mail show people picked right up on these new services in the 2019 tax season.
The shift to electronic filing and managing of tax returns benefits the CRA and taxpayers – less paper means less opportunity to make errors that take time to resolve and can result in costly adjustments for tax filers. Another benefit is helping to take the load off CRA call centres, which were slammed for their customer service levels in a 2017 report by the federal Auditor-General.
“As we move to electronic services, more people are doing self-serve,” said Frank Vermaeten, CRA’s assistant commissioner of the assessments, benefits, and services branch. “It does reduce some pressure on the phones.”
The big win on convenience has to be “Auto-fill my return,” where relevant numbers from your various T-slips are automatically added to your online tax return as you fill it out. Preliminary numbers show the use of Auto-fill my return jumped 17 per cent over 2018 to almost 11 million returns, which is about 40 per cent of the 26.2 million total returns received.
Auto-fill my return is available to people using online tax software to file electronically through the Netfile service for individuals (there’s also E-file for accountants and tax preparers). You also have to be registered for My Account, which is an online CRA account that lets you view and manage your taxes.
The CRA can offer auto-fill because it has duplicate copies of your T-slips. A frustration with auto-fill is that the CRA may not have all your slips when you’re ready to file. It’s up to you to ensure you don’t leave anything out and, if you do, penalties may apply.
An electronic service that is just starting to make some headway is Express NOA, which allows you to get a look at your notice of assessment online within seconds of filing it to the CRA. Preliminary numbers show use of this service jumped 60 per cent off a small base of about 375,000 users in 2018. Usage of a service that lets you make changes to your return online jumped 38 per cent off a base of 243,000 or so in 2018.
Netfile and E-file are the CRA’s foundational electronic services. They are steadily devouring the market share of paper tax filing, which is an example of old technology with no redeeming features. Yes, paper is free, but so are a growing number of tax software products.
CRA numbers show paper is down to about 10 per cent of returns after a 7-per-cent decline this year. Both Netfile and E-file gained ground, but the service with the real momentum is with something called “File my return.”
Aimed at low-income individuals and those on a fixed income whose situation remains the same from year to year, File my return allows you to file your taxes by answering questions through an automated phone service. Use of File my return jumped 37 per cent to about almost 65,000 people for the 2019 tax season.
What the CRA is doing with its electronic options for taxpayers amounts to the bank-ification of tax filing. Instead of filing your taxes into the void and waiting to hear back, you can view your account online and manage it as required. Withdrawals aside, it’s a lot like your online bank account.
About 9.3 million people have signed up for CRA’s My Account, which is helpful in a non-tax way in showing your contribution room for tax-free savings accounts and registered retirement savings plan.
Electronic services eliminate paper, but not the need for human contact with the CRA to get questions answered. The 2017 Auditor-General report on the CRA’s call centres found that calls were frequently blocked to cope with volumes and that nearly 30 per cent of callers who got through received incorrect information.
The CRA’s Mr. Vermaeten said steps have been taken to improve both accuracy and service levels. Just under half of calls during the 2019 tax season were answered by an agent, preliminary CRA numbers show. Another 36 got an automated response and 17 per cent of people hung up.
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