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The Rewards And Risks Of Filing Taxes Online

Written by Plastk Canadian Financial Education Leadership (CFEL) | Mar 17, 2023 1:00:00 PM

Image Credit: Freepik

Hello there! With tax season approaching, you may wonder if filing your taxes online or through traditional paper forms is easier.

While both methods have advantages and disadvantages, online filing has become increasingly popular in recent years.

But, you must confirm that you are utilizing a safe website and that you are protecting your personal information. One way to do this is to use secured credit Canada, which provides an extra layer of protection when making online transactions.

This blog will take a closer look at the risks and rewards of paying taxes online.

Continue reading to learn more about this convenient option.

The Rewards Of Filing Taxes Online

Paying taxes online has various advantages, making the process more effective and accessible to taxpayers. A few of these benefits are ease and convenience, quick processing, improved accuracy, and more.

The following will discuss some of the rewards of filing taxes online.

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1.     Ease and Convenience

Tax filing might be complicated, but it is now easier than ever, thanks to the convenience and ease of doing taxes online.

Here is how:

  • Ease of Use

Online tax filing is a simple procedure that can be completed in the comfort of your own home. You can navigate through your tax return and finish it without much effort if you use the right tax software.

  • Error Checking

Many tax filing software have built-in error-checking tools that can assist you in finding any errors or missing data before filing your return. This can help you save time and avoid making costly errors.

  • Automatic Calculations

You will not have to worry about manually calculating your taxes. The tax software will automatically compute your taxes and any credits or deductions to which you are eligible, ensuring you get the maximum tax refund possible.

2.     Fast Processing

The benefits of filing taxes online are numerous, but the processing time of your return is probably the most important.

Here is why:

  • Quick Refunds

One of the significant advantages of filing taxes online in Canada is the speed with which you can receive your tax refund. Further, you can also use the tax refund to improve your credit score.

Most of the time, if you choose direct deposit, you may anticipate receiving your refund within two weeks of electronically filing your return.

  • Reduced Paperwork

You can drastically reduce the amount of paperwork involved in the process. This means you will not have to worry about managing several papers or filing cabinets stuffed with receipts and paperwork.

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3.     Increased Accessibility

Paying taxes online provides ease and convenience and expands access to a broader group of taxpayers.

Some of the main points of increased access are as follows:

  • Accessible from Anywhere

You can access your tax return from any location with an internet connection. This entails that you can complete your taxes while at home, at the office, or even on the road.

  • Accessible to All

Paying taxes online also allows a broader spectrum of taxpayers, including those with impairments or mobility challenges, to participate in the process. You may easily access the CRA website, file your return, and use assistive technology.

  • Accessible in Multiple Languages

The CRA website is available in many languages, including French, making it easier for taxpayers who prefer not to use English.

The Risks Of Filing Taxes Online

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Online tax filing is becoming more and more popular. Yet, it also entails risks, including data breaches, identity theft, and incorrectly filed returns.

Here are some of the potential risks of filing taxes online.

1.     Security Concerns

Now, let's talk about some security issues to be aware of and how to slam the tax scams when doing taxes online:

  • Scammers sometimes send fraudulent emails or text messages posing as the Canada Revenue Agency (CRA) or other government entities to get unsuspecting people's personal information. Ensure the request is legitimate, and be careful of unsolicited emails or messages.
  • Utilize secure websites to file your taxes online. To verify a secure connection, look for the "https" in the web address and the padlock icon in the address bar.
  • Ensure your chosen software is reliable and up-to-date with the latest security features.
  • Avoid utilizing public Wi-Fi networks since hackers could potentially steal your personal information.
  • For an additional degree of protection, think about using two-factor authentication.

2.     Data Entry Errors

Paying taxes online can be a terrific way to save time and avoid the aggravation of traditional paper filing. Nonetheless, there are potential risks involved with this manner of filing, including the risk of data entry errors.

When you submit inaccurate information to your tax return, whether by accident or ignorance, data entry errors may arise; due to these mistakes, taxes may be paid insufficiently or excessively, which may cause issues with the Canada Revenue Agency (CRA) and even fines.

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To reduce the possibility of data entry errors,

  • Carefully verify your tax return before submitting it. Ensure all your personal information, income figures, and deductions are accurate and complete.
  • Another way to reduce the likelihood of errors is to utilize tax software that is designed to detect mistakes. For example, the CRA's NETFILE system verifies your return for errors or omissions before it is submitted, which might assist you in avoiding costly mistakes.

In short, while data entry errors are a potential risk, there are steps you can take to minimize the risk and file your taxes with confidence.

3.     Unfamiliarity With Tax Preparation Software

One potential risk of filing taxes online is unfamiliarity with tax preparation software. You could unintentionally make errors that result in mistakes on your tax return if you are unfamiliar with the tax preparation software you are using.

Here is how:

  • Tax preparation software can be complicated, and it is easy to get lost or make mistakes if you are unfamiliar with how it works.
  • You can miss out on tax deductions you are entitled to if you are unfamiliar with the software.
  • Dealing with new software can stress the already difficult task of filing taxes. It can be time-consuming and difficult if you are unfamiliar with the software.

To minimize the risk of unfamiliarity with tax preparation software, consider taking advantage of the free resources available through the Canada Revenue Agency (CRA) or consult a tax professional to file your taxes.

The CRA offers free tax preparation software that is simple to use and navigate. Additionally, they provide free tax clinics and online tutorials that can help in software navigation and self-assured tax filing.

Using their resources, you can reduce the danger of unfamiliarity with tax preparation software and confidently file your taxes online.

Tips For Filing Taxes Online Safely And Successfully

 

There are a few things you can do to reduce your risks and guarantee a successful filing if you choose to pay your taxes online:

  1. Use a reputable service that is certified by the CRA.
  2. Keep your software up-to-date, as updates often include critical security features and bug fixes.
  3. Protect your personal information using a strong, unique password, avoid filing from public Wi-Fi networks, and be careful of online fraud and phishing scams.
  4. Review Your Return Carefully before you submit your return.
  5. File Early to avoid the last-minute rush and reduce the risk of missing the filing deadline.
  6. Improve your financial literacy so that you have an in-depth understanding of filing taxes, tax refunds, tax software, and the steps involved in filing taxes.

Read: Tax Guide For 2023: Updates You Need To Know!

The Final Takeaway

So there you have it - the risks and rewards of filing your taxes online.

Remember, if you are concerned about the safety of your financial information online, make sure to use strong passwords, avoid public Wi-Fi when possible, and keep your software up-to-date to further enhance your security.

So, why not give online tax filing a try this year? It might just be the most accessible tax season you have ever had!

Thanks for reading, and happy filing.

And hey, while we are on the topic of finances and security, why not take a few minutes to review your other online accounts and see if you can take any additional steps to enhance your cybersecurity?

Stay safe out there!