In Canada, we have the option of filing our Income Tax Returns ourselves or having a tax preparation specialist do it for us. If we choose to file our taxes ourselves we have a few choices of how to do it: either by mail, over the internet (called Netfile) or by telephone. (called telefile) For the last few years I have been taking advantage of the telefile service which is free, while my wife has been using the netfile option which is not free to the majority of Canadians. Filing over the internet basically involves using third party software to prepare the return before you can file it with the Federal Government. So the Government doesn't charge you to do this but the needed preparation software doesn't come free. Depending on which software you buy it can set you back anywhere from $20 to $30 (Canadian), and if you choose to prepare it online instead of buying the actual software in store, it will still cost you at least $15 to $20 per person.
One thing to mention here is that filing online is free for anyone with a net income of $20,000 or less, which rules out a lot of people. This is a provision put in place by the Government to make sure that low income households can have access to this filing option but .like I said it still rules out a lot of people who are still not well off by any means but make more than $20k a year.
Now, there is a way around this - a loophole if you will - that leats many more people file for free.
To do this you need to qualify in the following ways:
1. You have to be using the Ufile online tax preparation software (ie use it on the internet because I dont know if the store bought version allows for this)
2. You have to be a student who will be claiming some student deductions for the past tax year (2008).
Here is how it works. You get a promo code and enter it in the special offer codes section of the tax return and make sure you are claiming some tuition fees and then the software should end up letting you submit your return for free even id your net income is over $20k for the year. Basically, you are supposed to be a member of the Canadian Federation of Students to use this but there is no way for them to check this if you satisfy the other requirements of tuition and entering the right code in the right spot. The code for the 2008 tax year is FAY1493
Here is the blurb for it straight from the Ufile site:
File online on time -- for free!To see this for yourself just visit: http://www.ufile.ca/home/cfs.asp and follow the instructions.
The Canadian Federation of Students and UFile.ca, Canada's online tax preparation Web site, have joined together to provide FREE online tax preparation and filing for all Canadian post-secondary students.
To be eligible for this special offer...
You must be a resident of Canada, have tuition fees and have attended school for at least one month during tax year 2008. You must also be designated as the FAMILY HEAD (the primary member of the family) for purposes of your tax file in UFile.
To take advantage of this offer...
- Log in to a new or existing UFile account for tax year 2008.
- Enter your tuition fees and months at school and click NEXT
- Locate the "Special offer" form in UFile's QuikClik Navigator. (You may need to scroll down the screen.)
- Enter the following Canadian Federation of Students "Free for Students" special offer code:
- Click NEXT.
Enter the rest of your tax information and then you can print or NETFILE your return whenever you are ready -- free of charge!
My wife who is a member of the Federation of students was able to use this promo code to file here taxes for free this year and I realized while helping her with her taxes that there is really no way that this stipulation is being enforced so ... I'll let you decide if you want to save some money online at tax time this year.