Is Filing Taxes Over the Internet Secure?

Filed in blog, Personal Finance by on March 19, 2014 1 Comment

The great Canadian tax season is upon us! Dust off your calculators and sharpen your pencils. If you have them ready, you join close to 7 million Canadians filed their taxes the old-fashioned way: through the mail. Yes a large group of us still fill out paper forms; however, over the past 10 years you may have noticed a strong push towards submitting it electronically.

How we filed in 2013

  • Paper: 7,086,618 (25%)
  • Netfile: 6,805,779 (25%)
  • EFile: 13,953,964 (50%)

Total: 27,846,361 (100%)

Source: Canada Revenue Agency

In fact, it is not hard to see why net filing a tax return is gaining ground. It is hugely popular with individuals between ages 35-45. Aside from the cost that software makers charge, doing your taxes using a software relatively cheap and easy. According to the Canada Revenue Agency (CRA) filing taxes electronically is fast, secure, more accurate, and refunds are deposited within 8 days.

Is filing your taxes over the internet secure?

Generally, filing electronically is very secure. When you send your returns over the next, a secure connection is made between the government and you. You file is encrypted as it gets sent and only those who are authorized to read the data will have access to it. Having said that, before you can actually Netfile your return, you will need to enter your tax data into the software. Candians have 2 options, buying a regesiterd and certified tax software for your computer or opt for an online version. I personally would not suggest using online base tax software.

As convenient as it may be, your personal information is only secure as the password that you create. Even then, a password may not be enough to keep hackers out. As someone who has been in the credit reporting industry for many years, I’ve seen many instances of identity fraud. All it takes is a few scraps of information and your life can be compromised. Now imagine the wealth of information that is stored in your tax return. Your social insurance number, your income, address, birthdates, names and addresses of spouses or children. Would you make this available online? What if the site gets hacked?

There are a variety of software programs are available to help Canadians file electronically. If you are keen on doing your own taxes this year, take a walk to your local computer store and purchase a desktop version of the software. Why? At least your personal and financial information will be stored on your local hard drive and will add another layer of security to the whole process.

About the Author ()

Pat Drummond is the author of Credit Reports Canada and considered by many to be one of the leading experts on productivity and simplicity in relation to financial planning. He started this online credit score & reporting site to chronicle and share what he’s learned in over 20 years of counseling families and individuals on debt management, obtaining loans and improving credit scores.

Comments (1)

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  1. Emil says:

    I did my taxes over uFile’s website and never had any problems with it. But having given it some thought, you’re probably right. This year I bought the program at the store. If these guys can hack into government websites I am pretty sure they can hack this site if they wanted. thanks

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