Sunday, April 28, 2013

Net Filing Resulted in Tax Refund in 6 Business Days

As discussed in my previous post, I tried NETFILE (filing my income tax return over the internet) for the first time this year, using the free StudioTax software.  NETFILE fast-tracked the processing of my return relative to mailing in a paper form.  I received my tax refund into my bank account (for which I have pre-authorized deposit set up) in a mere 6 business days.

Next tax season will mark my first full year of early retirement, without any employment income from which my company already withheld taxes, or corresponding RRSP deductions to further reduce my taxable income.  For the first time, I will have to pay income tax as opposed to receiving a refund.  This means I will no longer be incented to file my return as quickly as possible, but still do not want to miss the April 30th deadline.  Using NETFILE immediately submits your return, so there is no need to worry about timing or delays from the postal service.

I can also pay my income tax online by setting up a bill payment with my bank.  I entered CANADA REVENUE in the search criteria and received the following options:
  • CRA 2013 Installments
  • CRA - Arrears
  • CRA - Payment on Filing
The last one, "Payment on Filing" can be used for full payment of the upcoming tax bill.  The "account number" is your social insurance number.  Through my bank, I can either post date the bill payment or pay immediately.  I just need to ensure there is enough money in my chequing account to cover the amount owed.

It is quite convenient that this entire process can be handled online from the comfort of my home.

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