Will the Canadian Goverment prepare my taxes for free?

April 8, 2006 5:22 PM

Canadian Income Tax Question: Will the Canada Revenue Agency do my taxes for me?

This is a question that I've had in my mind for years, but that I'm especially interested in now. A few years back a friend-of-a-friend told me that every year he simply bundled up all his tax documents (T4, receipts, RRSP contribution info, etc) WITHOUT filling anything out himself, mailed them to the CRA and in short order would receive the standard "thanks for filing, here's your refund or whatever" response. His explaination was basically that the CRA has a mandate to prepare a citizen's filing for them, but that they don't advertise the service to minimize the demand.

Is this true? The CRA website doesn't really address the issue one way or another as far I can tell.

I can imagine that the CRA might not take it upon themselves to make sure you get every available deduction like a pro accountant might, but my circumstances leave me with no special tax considerations (Just a T4 to file), and making the goverment take care of everything for me seems like a good alternative to learning how to do it myself or paying for a professional preparation.

Assuming this is possible, is it totally tacky to take advantage of it? I'm kind of afraid of tax stuff - don't want to make any mistakes, and I'm way poor for a few months so would really, really like to avoid paying ANYTHING to file my taxes this year. I can afford a stamp, though. As an alternative, any common ways to get your taxes prepared and filed for free? Accounting students or something?

posted by chudmonkey to law & government (12 comments total)

If all you have is a T4--no strange deductions (don't forget claiming your rent! Make sure you have receipts from your landlord), no RRSP contributions, no weird income etc--then filling out the forms is easy as pie. Just slot the numbers in from your T4. At that point, it's really just very simple math.

You'll be filling out the main return, your Federal Schedule 1 (calculates how much Federal tax you owe), your provincial tax form, and your provincial tax credits. Shouldn't take more than about 1/2 hour, and trust me--it's really, really simple to do.
posted by dirtynumbangelboy at 5:26 PM on April 8, 2006

woah. that's kinda cool if it's true.
posted by juv3nal at 5:36 PM on April 8, 2006

QuickTaxWeb

If your gross income is less than $25,000, you can prepare and file your return online for free.
posted by magwich at 5:50 PM on April 8, 2006

That's excellent to know, magwich. I don't qualify this year, however.
posted by chudmonkey at 5:53 PM on April 8, 2006

If your tax situation is straightforward, use Telefile, which you can do for free, takes a few minutes, and gets you your refund (if any) in a coupla weeks.

Even if you have have RRSP stuff, tuition deductions, medical deductions etc. - you can still use it.
posted by birdsquared at 6:22 PM on April 8, 2006

See myth #2 on the CRA's list of myths. See also the income tax act.
posted by acoutu at 7:02 PM on April 8, 2006

acoutu, I don't see anything in Myth #2 that has anything to do with the question being asked here. The poster is asking whether CRA will actually fill out the forms for him, not whether he has to or not.
posted by dirtynumbangelboy at 8:53 PM on April 8, 2006

I've had CRA "fix" my tax return (more returned to me).

It's really believable that the CRA will "do your taxes" for you...

I think it might depend on whether you/your employer submitted expected income tax.

Then again, given that they'll give back money that's already been banked, I'd imagine that they'd inform you that you owe them more money.

(I'm really interested in an authoratative answer to this question)
posted by PurplePorpoise at 9:05 PM on April 8, 2006

I must admit that I know someone who just put all his receipts in an envelope and sent them off and got a return, no problem.
posted by acoutu at 11:06 PM on April 8, 2006

AFAIK, if you're living the simple life (employment income, standard deductions, simple investments), the CRA will start mailing you a pre-prepared! tax form. You fill in a couple blanks, give some account information, and send it back. They do the calculation and deduct/deposit accordingly.

They once corrected a mistake I'd made and sent back more money than I'd expected. I was surprised and pleased with their honesty.

I would not expect they make any effort whatsoever to maximize your savings by the various income-/deduction-splitting means available to spouses. Nor would they make the efforts an accountant would to organize one's business or investment costs to minimize taxation.
posted by five fresh fish at 11:38 PM on April 8, 2006

I wouldn't be surprised with their honesty. Given that some people believe that they can choose not to do their taxes (see the myths page), can you imagine what would happen if it came out that CRA was deliberately screwing up returns? A mistake here and there is one thing; that's human error. But being anythign less than scrupulously honest could cause pretty bad ripple effects throughout the system.
posted by dirtynumbangelboy at 9:32 AM on April 9, 2006

The CRA has a Community Volunteer Income Tax Program. During tax season, volunteers will help you with your taxes. They don't handle capital gains, and there's apparently a low income requirement.

They will also train you to (volunteer to) help people with their taxes. If you don't qualify for the free help itself, perhaps this free training would help you learn how to do your own taxes.

As a volunteer opportunity, I find this program both unnerving and compelling.
posted by blue grama at 6:50 PM on April 9, 2006