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Eight tips to help get you through tax season

Confused about filing your taxes? Sketch out your tax filing road map with this handy list of tips.
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Income tax
(via The Canadian Press)

Are you a new business owner, first-time filer or just plain confused about how to file your taxes?

We've compiled a handy list of tips to keep in mind as the April 30 deadline fast approaches.

1) File your tax return

Most Canadians are required to file their tax returns by April 30.

Anyone filing late will likely face interest and penalty charges. But they also risk delays in benefit and credit payments, including the Canada child benefit, which can give you up to $6,639 a year for a child under 6, and up to $5,602 a year for a child between 6 and 17.

2) Claim your tax credits and deductions

Find out what tax credits and deductions you are eligible for here.

For those with a registered business, make sure you don’t miss the chance to claim your business expenses. Find out which expenses you’re eligible to claim here.

3) Report all your income

Most of your pay slips should be delivered to you by February, including T4’s, and those that come from your employer, the payer of your income, or administrator. If you have misplaced a pay slip, you can ask your employer to issue a new one or sign-up online for the Canada Revenue Agency’s My Account service here.

Otherwise, you can estimate your income using your pay stubs. Don’t forget to keep all your documents should the CRA come knocking later.

Other income without a tax slip should also be reported, including tips, money earned through services like Airbnb or ride sharing services, tutoring, or selling things online.

If you sold your principal residence last year make sure you report the necessary information on your return.  

4) Know what’s a valid claim

Many people think you can claim expenses from funerals and wedding, or a loan to a family member. Use this handy guide to make sure you don’t claim anything non-deductible.

5) Use free tax software to file online

You don’t need to shell out for online tax software. The CRA offers Netfile as a free alternative.

Those registered with My Account can also take advantage of the Auto-fill my Return option, which automatically fills in parts of your return’s income tax and benefits sections. Express NOA will hand you your notice of assessment immediately after you file.

6) Get free tax help

Have a volunteer from the Community Volunteer Income Tax Program do your taxes for you, for free. Those with a modest income and simple tax return may be eligible. You can also find tax preparation clinics using the MyCRA mobile web app.

7) File and pay on time

If you owe money and file late, the CRA will charge you a penalty of 5% of your initial balance, plus 1% of your balance per month for up to 12 months.

Everyone can avoid the late penalty by filing on time, but if you can’t pay your balance by the due date, you should contact the CRA beforehand to see if you quality for a payment arrangement or taxpayer relief.

If you’ve never filed or it has been a few years, you may be eligible to receive relief from interest, penalties, and prosecution through the Voluntary Disclosures Program.

8) Hang on to receipts and records

You should keep your receipts and supporting documents for at least six years after filing your return. This will make it easier to prove that you reported your income and deductions correctly if the CRA reviews your file.

- Tri-City News




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