Famed pundit h.l. Mencken once mused that the world definitely must be progressing, because the average person now pays twice as much in taxes as he or she used to earn in wages.

Regrettably, we’ll all soon face our annual reminder of just how right Mencken was when we file our annual income tax return. April 30 is the day of reckoning for salaried workers, although it may be changed to Monday, May 1. June 15 is the deadline for business owners and the self-employed. And March 1 is the last day to offset some taxes for the 2005 taxation year by socking money into an RRSP.

The Internet can help advisors and their clients come to terms with the taxman. Here are some Web sites to consider.



Canada Revenue Agency

www.cra-arc.gc.ca

There is really nothing rosy to say about income taxes. If you owe taxes, get ready to cut a cheque. If you’re getting a refund, the Canada Revenue Agency took more of your money than it should have last year.

A visit to the taxman’s lair may help you clear up any questions or avoid potential problems at tax time.

The CRA’s site is well designed and easy to get around in — which is rather unusual for a government agency. A menu in the centre of the home page cuts right to the chase. There are three categories: tax information for individuals, information for businesses and a group of links that cover other tax topics.

The site notes that the CRA’s army of taxmen and -women begin processing tax returns in mid-February and will complete each return that is filed before April 30 in two to four weeks, depending on whether taxpayers file a paper or electronic return. Those who wait until the last minute and file a paper return can expect to wait up to six weeks.

The quick links include full versions of the 2005 tax package for each province. You can download any necessary forms right from the site, or call a 1-800 number and have them mailed to you. There is also a list of tax seminars offered in cities and towns across Canada dealing with various topics such as GST, new small-business ownership, payroll deductions and child tax benefits.

Procrastinators, by the way, should know that the latest penalty has been set at 7% for late payment of any taxes, Canada Pension Plan contributions or employment insurance premiums.



Taxtips Canada

www.taxtips.ca

Taxtips is a first-rate Web site created by a retired couple in Nanaimo, B.C. Advisors may want to recommend the site to clients in their next newsletter or e-mail, as it is overflowing with useful tax information that is geared toward the average taxpayer.

The centre of the home page is filled with a long column of specific topics. And a menu that runs down the left-hand side deals with about 15 topics, including personal and business taxes, small businesses, the GST and provincial tax rates, senior citizens, and wills and estates. It even includes highlights of the 2005 federal budget and each of the latest provincial budgets.

The site is completely up to date, including a half-dozen changes added in January. The additions include items such as the latest tables for non-refundable tax credits and a new calculator from the CRA that lets employers determine the taxable benefits of automobiles made available to employees.

Visitors to the site who want a brief respite from the tax information should visit Taxtips’ “useless information” area. It notes, for example, that the federal debt in 1901 totalled just $355 million, which equalled $66 for each of Canada’s 5.4 million people. By 1951, the debt was $16.7 billion, or $1,225 for each of 13.6 million Canadians. Fifty years later, in 2001, 31.8 million Canadians would have had to fork out $20,748 as their share of the federal debt, which had reached $645 billion.



Netfile

www.netfile.gc.ca

The fastest way to get your 2005 tax return out of the way is to use the Internet to file it directly with the CRA. The service can only be used for filing personal tax returns, so advisors should pass the site address along to clients.

Netfile is geared specifically toward the millions of Canadians who use special software programs to prepare their tax returns, as it removes the old chore of having to print out hard copies of results from such programs and mail them to Ottawa. This year, the service is provided online between Feb. 13 and Sept. 30.

@page_break@Netfile is easy to use as long as you have a software program or a Web application that has been certified for use by the CRA, such as GenuTax or Cutetax Online. Click on “software” on the left side of the Netfile home page for information.

The approved programs have been written to work with Netfile. Once you have finished calculating your taxes on the computer, go to the Netfile site and transmit the information. Your return will be processed by the CRA in two weeks or less.

A filing tip: technology makes filing faster, but you still need all the usual numbers, receipts and other information that you required decades ago. Visit the “before you start” area on the left-hand side of the home page and read the checklist.



E-file and TeleFile

www.efile.cra.gc.ca

E-file is the electronic road to take for clients who require an advisor or accountant to prepare a more complex tax return.

It is no different from the old-fashioned trip to a professional, except the tax preparer is registered with Ottawa to file tax returns online. As a result, anyone who is owed a tax refund will probably receive it within two weeks. Those who are owed tax refunds can still file the return early, but will not have to send the money to the CRA until the regular tax deadline.

TeleFile is for Canadians who have very simple tax returns that involve regular income and deductions. It cannot be used by the self-employed or for returns that include capital gains or rental income.

Here’s how Telefile works: complete the regular paper tax package, have your social insurance number and the four-digit “access code” on your return’s front-page label handy, then dial 1-800-959-1110. Use a Touch-Tone phone’s keypad to type in the requested numbers, receive a confirmation number and you’re done. IE



If you have Web sites to share with IE readers, e-mail Glenn Flanagan at gflanagan@sympatico.ca.