Tag Archives: taxes

How to NETFILE a StudioTax 2012 Return Online to the CRA for Free

Posted on by

After downloading and installing StudioTax 2012, testing it with a typical personal Canadian income tax return, and a very simple business income and personal income tax return, I was ready to calculate my own taxes. After that, I filed my tax return online following the instructions provided by StudioTax. And it cost me nothing!

Well, I did make a donation to StudioTax but somehow that doesn’t feel the same as having to fork out the big bucks for boxed software. It’s like being asked to do something instead of ordered to do it.

UPDATE: I do hope to file a return again in early 2014 using StudioTax 2013. Until then, I hope this article will provide you with an overview of how it works.

Here’s how I filed online:

Filing a Canadian Income Tax Return Online from StudioTax 2012

  1. Double click on the icon to Start StudioTax 2012.
  2. Click on your name under the Recent Returns.
  3. Review each part of your return by clicking on the listed Schedules and Forms on the left side of the screen. Look for any errors or omissions. (Or print a draft of your return to review it.)
  4. It’s very important to review your return before filing. One user reported on RedFlagDeals that by entering a number for the public transportation credit using commas StudioTax reset the deduction value to 0! So take a few minutes and look closely.
  5. If you want to see a Schedule that is not listed,
    1. click on the icon at the top of the screen called Forms.
    2. Select the Schedule you want to review.
    3. Click the down arrow key to add it to the list.
    4. Click OK.

    The Schedule will now be added to the list on the left side of the screen. You can click on it and review the information on it.

If everything looks good, you can NETFILE your taxes.

Preparing to NETFILE your Return

  1. From the icons at the top of the screen, click on NETFILE.
  2. If necessary, save your file by clicking on YES.
  3. Read the explanatory message, then click Next.
  4. Read the next material.
    Check the box to confirm you have understood it.
    Click the Next button.
  5. Read the exclusions.
    If none of the situations apply to you, click on the No button, then click on the Next button.
  6. If you are prompted to check your facts, check them and then select Yes and click Next.
  7. Read any warnings.
    If no action is required, click Next.
  8. Make a note of where your file is stored on your computer:
    For example: C:\Documents and Settings\user7\MyDocuments\BETCROOKS_2012.TAX
    If the suggested location is acceptable, click on Next.
  9. After the file successfully generates, click on the Next button.

StudioTax generates a useful screen listing what you will need to NETFILE including your SIN number and the location of your .TAX file.

Sending the Return In by NETFILE

Click on the link to the CRA website at http://www.netfile.gc.ca/

On the CRA website:

Click on the Ready to File button.

  1. Read the information.
  2. If you want to continue click on the button: I agree with the Terms and Conditions – proceed
  3. Click on the applicable button:
    • I am filing an income tax return with the CRA for the first time.
    • My personal information including my name, mailing address or direct deposit information has not changed.
    • I need to update my personal information with the CRA including my name, mailing address, or direct deposit information before I can proceed with NETFILE.

    NOTE: when it asks whether you are filing for the first time, it means filing taxes by any method, including by mail, not just by NETFILE.

On the NETFILE transmission page

  1. In the Social Insurance Number (SIN) text box, type your SIN number.
  2. In the Date of Birth (YYYY MM DD) fields, type your date of birth as described.
  3. If you are filing your first income tax return with the CRA check the box: I am filing an income tax return with the CRA for the first time.
    It will then prompt you to enter your given name, second name, family name etc.
  4. After clicking on the Browse button, navigate to where the file is stored on your computer.
    Double click on the name of your file.
  5. If you intend to pay any taxes due within the next 5 days by internet or telephone banking and if you want your Notice of Assessment to show that you have paid, click on the box beside “I will make an electronic payment using my financial institution’s Internet or telephone banking services within the next five days”
    They will then place a hold on your return till after the 5 days before they review your taxes and print your Notice of Assessment.
  6. Read the Declaration.
    If you agree, click the check box beside “I agree with this declaration.”
  7. Click on the button: File my return now!
  8. You will receive a message thanking your for using NETFILE which should include your proper name.
    It should say
    “We have successfully received your 2012 tax return.”
  9. Be sure to make a note of the confirmation number, or print the page for your file, by clicking on the Print this Page button.

If you wish to file a return for your partner or spouse, click on the link Ready to file.
Otherwise, you can close your browser window.

Returning to StudioTax 2012

  1. Click on the Next button.
  2. Read the thank you.
    Seriously consider making a donation to StudioTax either now or when your Notice of Assessment comes back.
  3. Click on the Finish button.
  4. Click on File and select Exit to close the window.

You’re done! Now you’ll have to wait and see what the CRA says on your Notice of Assessment.

In the meantime,

  • be sure to file your supporting documents and keep them for at least 6 years in case the Canada Revenue Agency asks to see them
  • if desired, backup the program and your .TAX file to a more secure storage media, like a DVD
  • PAY any amount owing! The deadline for payments is April 30, 2013. If it’s later than that, pay immediately to reduce the interest charges that are building up.

Related Reading

Join In
Did you NETFILE your taxes this year with StudioTax or a competing product? Did the program help you find any extra credits or deductions? Did the CRA agree with your calculations? Please share your experiences with a comment.

Can I Claim a Charitable Tax Deduction Credit for a Donation Made Outside of Canada?

Posted on by

We help a lot of Canadian charities because we were both raised to believe that if you have you should share. One thing we quickly learned is that we can donate more to Canadian charities at the same total cost to us if we claim the donation on our income taxes. We also donate to some international charities. (And yes, despite what Pearson airport and Canada Post believe, the USA is actually *international!*) In the past, we haven’t bothered too much with the receipts for those foreign donations because we believed that they were not necessary for filing our Canadian income taxes. When I read the tax forms more carefully this year, though, I was left wondering if we could claim donations made outside of Canada to get a tax deduction.

What the CRA Says on Schedule 9 Donations and Gifts

This was the wording on Schedule 9 that caught my eye

“Donations made to the United Nations, its agencies, and certain charitable organizations outside Canada” (line 334)

The amount you enter on this new line 334 is added directly into your “Total eligible amount of charitable donations and government gifts” just like your gifts to registered Canadian charities.

So can you donate to international charities and claim it on your Canadian taxes? Which charitable organizations outside Canada are included in “certain?”

Which are the “Certain Charitable Organizations Outside Canada” and Which Aren’t?

I went hunting on the CRA website to find out if the health and children’s charities we donate to internationally are “claimable.” Here’s what I found:

Did the Queen Give it the Royal Nod on Behalf of Canada?

I found at http://www.cra-arc.gc.ca/chrts-gvng/qlfd-dns/qd-lstngs/gftsfrmhrmjsty-lst-eng.html
that

“A listed charitable organization outside Canada that has received a gift from Her Majesty in right of Canada is a qualified donee until 24 months from the date of the gift.”

A list of which gifts Queen Elizabeth II has made within the required time period is provided. For the 2012 taxation year, these include

  • Education Africa, in South Africa
  • The Rhodes Trust, in the United Kingdom
  • the Aga Khan Foundation, in Switzerland
  • and several others

The list is certainly not long!

Did One of Our Politicians Go to Uni There

At http://www.cra-arc.gc.ca/chrts-gvng/qlfd-dns/qd-lstngs/prscrbdnvrsts-lst-eng.html there is a list of international universities to which you can donate and claim the expense on your Schedule 9.

(Donations to most Canadian universities are also eligible. You can check by looking up the name of the university on the CRA website at http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html.)

So if you want to contribute to the University of Tartu, rest assured you can get back a portion of your contribution. (or donate more at no additional total cost to yourself) Or to the Maharishi University of Management, which I’m sure you know is in Iowa.

Gifts to the United Nations and Its Agencies Qualify Too

I could not find a specific list of United Nations agencies on the CRA website, so you might have to contact the CRA to determine if an agency is approved.

What Other International Gifts Can be Claimed on Schedule 9?

At this time, the UN and its agencies, foreign universities, and the organizations favoured by Queen Elizabeth II on Canada’s behalf are the only ones qualified. So our donations to help children in other countries and with world health issues are not eligible.

Still, if you did donate to one of those select few organizations, you should be sure to report your claim on Schedule 9. Assuming you have taxes to pay, you will be able to reduce them using the associated credit. Then you can use the money you didn’t have to pay in taxes to contribute more to the same or another charitable effort, at no additional total cost to yourself!

Do You Work Primarily in the USA or Internationally?

This information is intended for average Canadians who work in Canada, generally donate in Canada and pay taxes only in Canada. It appears that there may some other eligible donations that apply only in very specific circumstances, particularly for Canadians who work in the US (or other countries) and are paid in US dollars (or other currencies). If that describes you, you may want to talk to an accountant about which contributions to US (or international) charities you may be able to claim.

If you read the comments, below, you will find a very useful and detailed description of one case in which a taxpayer could claim donations made to US charities based on income earned in US dollars.

I don’t feel qualified to judge which international (including American) charities would qualify for this tax break in Canada. I’d recommend you look for a tax accountant who specializes in Canadians working abroad if you have a substantial donation that you wish to claim. (It’s possible that in that case you should be getting advance authorization from the CRA before submitting the claim.)

Related Reading

Join In
Do you maximize your claims to charity using Schedule 9? Any tips or issues you’d like to report? Please share your experiences with a comment.