Canadians, tax season is here again! Time to dig up those receipts and get organized and ready to submit your taxes.
To help you prepare, here are some essential things to remember when doing your taxes this year:
- File your taxes on time: Start working on your tax report early, so you can file everything on time and avoid penalties. Canada’s 2021 tax deadline is April 30, 2022. Ottawa did not prolong the tax season this year so ensure you file things on time.
- Take advantage of available tax credits and deductions: There are many tax credits and deductions that you may be able to claim when submitting your tax return. To check what you are eligible to claim, visit the Canada Revenue Agency website. This handy page can help you sort through the tax credits and deductions to find what applies to you. Remember to claim business expenses if you have your own registered business, or if you ended up working from home last year due to the pandemic.
- Make sure you claim all your income for the year: Collect all of your T4 slips from your employer, and any other income for the year! This includes things like rental income, contract work, ride sharing, selling stuff online, and other services you provide where you earn money.
- Take advantage of free tax software: You can find certified tax software for free to help you file your taxes. The CRA website has a full list of approved software available in Canada. You can see the full list here.
- Get help! Hire an accountant or get free help if you qualify: Are you struggling to file your taxes? Do you have questions or need help? You can hire an accountant to help you sort through the report and file everything correctly. I highly recommend this if you have your own business or have a less straight forward situation, self-employed, with multiple revenue incomes for example.If you have a modest income and a simple tax situation, a volunteer from the Community Volunteer Income Tax Program (CVITP) may be able to do your taxes for you, for free. You can find a tax preparation clinic near you or learn more at canada.ca/taxes-help.
- Prepare for the year by keeping things organized: Keeping all your documents, receipts, T4 slips, expense and income lists all in one place can save you a lot of headaches during tax preparation time.I highly recommend you designate a file folder, or a cabinet/box, to keep all of the documents and receipts pertinent to the year. Keeping a simple Excel spreadsheet with all your income/expense information can also be very helpful. I personally use Quickbooks myself, and I find it very helpful to keep everything in one place. I can record expenses, send invoices, and keep track of my income all online in one location. It is very easy to then transfer information to my accountant once it is time to file my taxes. (If you are interested in trying Quickbooks yourself, you can use my referral link and get 50% their fees).
Do you prepare your taxes yourself or hire somebody to help? Would love to hear from you!