For those of us who still prepare and file hard copy T1-General Income Tax Returns | Page 2 | Income tax filing | Discussion forum

Bill said
Doug, thanks but yes, I realize that, I prefer to attach to my paper return the paper T-slips sent to me by mail.

The digital revolution industry, beginning with the phones all humans now carry right on up to the largest installations, has been an environmental disaster on many levels (just one example: check out the many reports re the impact of just bitcoin mining, something humans managed to live without for millions of years, on global warming) so I'll resist the urge to virtue-signal about my chosen way of filing taxes. And I'm not sure yet if I'll travel during tax season (lot more "green" if I stay put, I'm told, no?) but I'll update everyone as soon as I firm up any plans.  

Yeah, that's fine to paper file. Nothing wrong with that. Some people like to "make the tax man work" by having to at least scan submitted paper returns.

Your FIs store all your tax slips digitally anyway, so was just thinking why not print, on paper, the PDFs of your tax slips and get them sooner? You'd still be printing paper copies.

Also, with CRA having electronic copies of all tax slips, I bet you could just submit your T-1 and associated schedules and they would just verify your tax slips electronically.

Cheers,
Doug

Loonie said
For once, I couldn't agree more with Bill!  

Except the digital revolution is moving rapidly to electronic processing of everything. It was not very long ago when few FIs made online PDFs available, and only a few years since CRA started making tax slip data available online and even fewer offering a digital mailbox for NOAs, Installment Requests, etc.

The time is coming when the only way to file a T1 will be online, perhaps with CRA filing out most of the data entries automatically, leaving the taxpayer to fill in missing data such as self-employment income, and/or verifying data entries already made on your behalf by CRA. I can even see a scenario where any remaining paper filings will have a processing fee tagged on to them.

Ten more years and Canada Post itself may no longer have any Class 1 mail to deliver.

What if your house burns down?

I keep my electronic records on several devices as well as the cloud and even scan or photo the important hard copies.

I am not a complete paper Nazi however, my wife still writes and posts personal letters but where there is a large volume of savings such as tax returns, OAS/CPP cheques, these should be electronically stored and transmitted.

Loonie said
What is your plan for when a major hacking incident or tech disaster occurs, so that your records vanish? - as it surely will one of these days. You may not believe this - fair enough - but how would you know if you're right?

It depends on how one paranoid organized could be.

This is how I keep my tax returns:

1) Large envelope that contains tax deductible receipts I collected during the year. Just in case CRA would like to see proof of what I claim in deductions. Happened at least twice.

2) T1 form (and all other firms) exported to PDF from Netfile and saved on hard drive;

3) This same PDF file written to CD/DVD and stored in large envelope with receipts;

4) Daily hard drive backup (with PDF files and everything else) to storage server on premises;

5) Encrypted PDF files and Netfile files stored on cloud;

6) Backup of last resort - CRA My Account, which keeps all info on tax reports filed.

Is this good enough?

There are still gaps in this approach. If my house burns down and CRA wants to see receipts, I am in trouble. Ideally, I should scan them all and keep electronically.
So, one can't be too organized.

Now, a funny history from CRA reviewing my taxes. Once, they asked me to prove I do indeed have dependents I claim and supply receipts for medical services I paid for them and claimed in deductions.
I did.

CRA replied: we accept that you do have dependents, and medical services were paid for them are tax deductible. Please give us proof that it is you who paid for those.

This is what left me perplexed. I thought, the definition of a dependant (whom nobody else claims as a dependant) is a person who solely depends on you. So, what CRA says they agree a person is depending on just me for providing support, but I must prove that support provided was by me.

I decided not to discuss linguistics with CRA, you never win that discussion. Luckily, all services were paid by credit card, my credit card of course, so I just submitted CC statements.

If I were one of those people who hate getting their expenses tracked by credit card companies, paid cash for everything - I would have lost hundreds of dollars in tax rebates that year.

So, the digital revolution that can track your every move could be used in your benefit. Once in a while.

Loonie said

CRA accepted your monthly statement but they could have asked for the actual receipt.

I think CRA had a valid point. Just because someone is dependent on someone else doesn't mean that that only one person necessarily always pays all their expenses.

Perhaps, my story was not clear. CRA asked me for actual receipts. I have provided CRA with scans of receipts and they accepted it.

After that, CRA asked to prove that these were paid by me. On CC purchase receipt (attached to receipt from medical service provider with itemized medical services) there is name of service provider I paid money to, last 4 digits of my CC, name of bank that issued CC.

Medical service provider receipt has name of my dependant, but CC purchase receipt does not have name of credit card owner.

I had to send, additionally, 12 monthly Credit Card statements, as expenses have happened during the course of the year.
CRA was satisfied with CC statements I provided. I conveniently circled all relevant expenses on them, and CC statement has my full name.

If I paid cash, I can't even imagine what options could I have to prove the payment was done by me.

I would also argue that if nobody else but a single person legally claims someone as a dependant and that claim is not disputed by CRA, that person is entitled to claim allowed expenses made on behalf of dependant.

Even if someone chipped in, they won't be able to claim deductions.

Also, I might accept CRA suspicions if my income happened to be way low to afford medical expenses I claim I paid, but that was truly and definitely not the case.

So, my guess someone at the top of CRA directed to have more scrutiny on electronic tax returns with medical and other deductions which, when filled electronically, do not require proof until CRA asks for it.

Perhaps, an agent processing my return didn't have many questionable returns from my area, so decided to spend time on mine.

I don't mind, just found it funny. Also, as extra lesson learned, I now keep all CC statements downloaded to my PC. I also dedicated separate credit card for tax deductible expenses only. To make life of CRA agent easier next time they ask for CC statements and have to scroll through pages of irrelevant transactions (he buys his groceries where? What a snob!).

Loonie said 3. I would add off-site storage if I were you.  

That would be item 5 on my list, "stored on cloud."

FYI - 2023 T1 Income Tax Package printed version is now available here

If you file paper last year, CRA will mail one to you this year. No need to order ... I file online and still want a paper copy to pencil in my notes 🙂

Our paper 2024 returns came in the mail from CRA last week.

Here's a handy link if you need to order paper forms to be mailed to you:
https://apps.cra-arc.gc.ca/ebci/cjcf/fpos-scfp/pub/rdr?request_locale=en_CA