Tax time is almost upon us once again. Whether you do your taxes yourself or contract them out to an accountant or firm, there is a lot you can do to make the most of your tax year.
GET YOUR DUCKS IN A ROW
While little yellow duckies would be adorable and far more fun, we’re referring to the paperwork needed in preparing your taxes for filing. Before you start or head to the accountant’s office, it’s essential to do some of the legwork yourself, ensuring you have the important and crucial documents on hand.
- Personal Forms | Make sure you have received an official tax form from any of the following that applies to your situation for the tax year in question,
- Employer (T4)
- Employment Insurance (T4E)
- Trust Income (T3)
- Investment Income (T5)
- Pension (T4A)
- Old Age Security (T4A OS)
- Canada Pension Plan (T4A P)
- Workers Comp (T5007)
If you are unsure whether or not you have other means of income that should be accounted for, you can consult the Government of Canada website.
- Family Related Expenses | If you have children under the age of 18 listed as dependents, ensure to include any of the following that applies to your personal situation for the tax year in question,
- Canada Child Benefit
- Birth-Related Medical Expenses
- Canada Caregiver Benefit
- Child Care Expenses (Your childcare provider should provide you with a form for your taxes, listing all children who attend and the exact number of days they attended in that calendar year.)
- Children Fitness Tax Credit (Only applicable in Yukon, Manitoba and Québec)
- RESP (Registered Education Savings Plan)
- Student Related Expenses | If you were enrolled as a student during the applicable tax year, you will want to be sure you have included any of the following that applies to your situation,
- Moving Expenses
- Interest Paid on Student Loans
- Tuition, Education and Textbook Expenses
For further details, reference the website for the Government of Canada.
Each province has its own list of requirements that may differ according to where you live. To be sure that you have everything you need and don’t miss out on any deductions, consult your province’s requirements here.
If you received the CERB (Canada Emergency Response Benefit), it is important to note that you will owe taxes on the total amount received in 2020. The percentage of tax will be according to your personal tax bracket. With the additional benefits (CRB, CRSB, CRCB) offered in relation to the pandemic, a 10% tax was deducted before you received it; however, you may be accountable to pay more if your marginal tax rate is higher.
While it is intended that beneficiaries will receive a tax slip with the amount due by the end of February, it won’t hurt to start saving now in preparation. In the event that this amount catches you off guard, you may want to consider a simple, online loan. Our quick online loans don’t require a credit history and won’t affect your credit rating. We are here to help you through unexpected difficulties. You can always count on our professional, discreet and humane service. Credito supports Canadians working hard for a life they deserve.
GET AHEAD OF 2021
We all make mistakes, and our taxes are no exception. Not all is lost; there is always next year and the year after that, and so on. Here are a few ways you can learn and prepare yourself for a successful 2021 tax season.
- Keep Track | If you work for yourself, this one is significant. Get yourself a small file accordion with 12 sections. Ideally, you will tally any expenses at the end of each week, but in the name of real-life, let’s say you do it once a month. Once you’ve entered them into your spreadsheet or whatnot, staple your receipts together according to category and then store them in the accordion file. You will find it so much easier at the end of the year to tally your expenses, and your accountant will be oh so grateful when you show up without the usual shoebox full of crumpled receipts.
- Revise Tax Deductions | Review your paystubs and double-check how much you are paying in taxes. While you may love a good tax return, why wait till the years’ end. Some companies may be deducting too much in taxes from your paycheck. Speak with your accounting administrator and have them adjust it to the amount you actually end up owing. Some might find themselves not paying enough tax, winding up owning the government money at the end of it all. Ask your employer to increase the amount they deduct from your pay. If you can’t afford that, speak with your employer about a pay raise to meet basic living requirements.
- Be Truthful, Always | It’s so easy for some to feel like they shouldn’t have to pay individual taxes. While we won’t go into a debate on ethics and how the world works, we can say with 100% certainty that the truth is always worth it when it comes to taxes. Before you decide to falsify what you made last year, consider the fact that the government has access to the following,
- Social Media (Including your brag posts.)
- Your Online Sales & Purchases on Kijiji, Etsy and eBay
- Your CRA
- Bank Accounts and Investments
Pay Your Taxes On Time
It’s a pity to have to pay more than necessary, especially on your taxes. If you are in a difficult situation, contact the number on your notice of assessment and set up a payment plan. You will be surprised at the level of help and flexibility you can get if you simply ask.
FILING YOUR TAXES
If you don’t already have a specific accountant for filing your taxes, this year is an ideal year to get one. With all the changes related to the pandemic, you don’t want to miss anything. Whether you decide to file them yourself in the end, find an individual CRA or select a branch that handles taxes, get it lined up as soon as possible. Tax season literally is a busy season for accountants, and waiting too long might result in paying late filing penalties. If you do decide to file your own taxes, SavvyNewCanadians.com rounded up the best tax software for Canadians. The top three are,
- Turbo Tax-Free | Certified by NETFILE, is available in Québec, satisfaction guaranteed, and more.
- Simple Tax | Same tier service regardless of what you pay, CRA-certified, step-by-step guidance, and more.
- Ufile Free | Offers a simple way to file your taxes, secure methods, and guaranteed accuracy.
While tax time might not be your favourite time of year, the good news is that if you get up to speed, file them on time and set good habits for the following year; it’ll all be over in about two months…till next year, that is.