The tax filing 2020 season is almost here and if we follow the last year’s timeline, the exact time will be around the second or third week of February 2020. The last day to file taxes is on April 2020 for Canadians and June 15th, 2020 for the self-employed people or for those who have a self-employed spouse. Filing taxes on time is crucial for every citizen. It is not only about the potential of tax refunds 2020; you may also face monetary penalties, or the government benefits you receive may also be affected for not being able to file tax on time.
What is free file and who is the free file alliance?
The term Free File alliance is used to define the companies that are in the business of charging people to help them handle their tax filing procedure. They have put a lot of effort and money to ensure that the IRS does not start its own free tax filing service that would compete with what they are providing. The new Free File Alliance deal allows the IRS to offer a similar service, but it is not willing to do it this year.
The group of companies under the Free File Alliance has agreed to offer free tax filing for a section of people depending on their income. You can visit the IRS website to find out which option is suitable for you. The companies included in this alliance are mentioned below
- OnLine Taxes
- 1040NOW Corp.
- Free Tax Returns
- H&R Block
How to File Your Taxes in 2020?
You can file your taxes in multiple ways in 2020 based on your situation and preferences. Here are some of the prominent options
Online tax software
When it comes to online tax software, there are many brands available from which you can choose the free or paid versions based on the kind of support you need.
Some of the examples of well-known tax software that include TurboTax online, TurboTax free, Studio Tax, AdvTaz, uFile, H&R Block Tax and CloudTax.
Tax software makes the tax filing process easy. You can connect to an existing CRA My Account and use the “auto-fill my return” feature to automatically populate a major part of your information. This automated process decreases the chances of errors in the procedure.
Online software for tax filing allows you to send your income tax return 2020 directly to CRA through NETFILE and receive your return within 8days. Apart from this, you will also have your tax details for previous years saved online that you can access anytime for reference purpose in the future.
CRA file my return: This year CRA has decided to help the low-income group complete their tax return through automated phone service. They offer this service for free and the people who are eligible for this will be informed through email.
Paper return via Mail: Some people are in favor of the old-fashioned method of filing taxes. The CRA, in some years, mails out tax forms to paper filers to speed up the entire process. In case you want to file a paper return and did not get any email regarding that, you can order a paper copy of that.
Community Volunteer Income Tax Program: Under this program, volunteers in tax clinics across Canada help income Tax Preparation and benefit returns to the individual who are eligible and have a modest income and a simple tax situation.
When is the Tax Filing Deadline 2020?
30th April 2020 is the date that Canadians need to keep in their minds. This deadline is applicable for most of the tax filers for both paying due tax 2020 and filing returns.
For the self-employed people, the date is extended to 15th of June. However, you must keep in mind that if you awe taxes, you are required to pay up by April 30th.
In case of any delay from your end in settling your balance or sending in your paperwork, you will be charged with late filing penalty and daily interest charges on any taxes owed.
Penalties for a Late Tax Filing in 2020?
The government wants to ensure that if you owe the government any taxes, you file tax returns on time. If you do not owe any taxes to the government, you may not need to file any tax return. On the other hand, if you are late in filing your tax returns and owe tax, you will be charged with interest and penalties by the CRA. The penalties are equal to five percent of the balance owed plus an additional percentage for each month you delay. In addition to the late filing penalty amount, you will also be charged with interest on the amount of taxes you owe to the government.
Filing your income tax online using trusted software
Filing your own taxes is undoubtedly a daunting task. Fortunately, there are various free tax return software from which you can choose a suitable one for yourself. One of the advantages of using this software is that you do not need to pay a tax consultant for filing your tax returns which ultimately results in savings.
Some of the well-known tax return software in 2020 is the following
SimpleTax is a new tax filing software that is built combining the best features of other tax return software to make a well-rounded program. It is available in a web-based version that can be accessed on a local Windows, Mac desktop and IOS mobile devices. It comes in a unique pay-what-you-want structure, which is free, but you have the option to donate something to encourage the creators.
TurboTax is available both in paid and free versions and accessible in Windows, Mac, Android and IOS platforms. One of the unique features of its free version is that it does not have any income limitation. Although you are allowed to import your tax information with CRA’s Auto-fill My Return, you will need the paid version if you wish to transfer your tax information from the last year.
UFile FREE only has a web-based version that can be used on Mac or Windows desktop. You need to meet at least one of the below mentioned criteria to file your taxes for free with UFileFREE.
- Your entire family income is less than $20,000
- This is the first time you are filing your tax return
- You are a post-secondary student
- You are a recipient of Guaranteed Income Supplement
- Your only source of income is T4 tax slip.
If you do not fulfill any of the above-mentioned criteria, you can opt for a more robust version of the program, but you’ll have to pay cash for it.
TaxAct is a well-known tax filing software in Canada that has been serving Canadians for free over a decade now. Taxact help to online tax filing for new and experienced users, it accommodates mainly the self-employed and rental income group.
I hope the above-mentioned information will be helpful for you in gearing up for the 2020 tax session.