Income Tax Returns – 5 Considerations for Tax Season

Tax Season is well underway and many Canadians are just now getting around to “doing their taxes”. It is a time of year that will feel rewarding for some and frustrating for others, while many will experience both.

There are many considerations when preparing to file your taxes such as personal information, possible deductions, Canada tax free savings accounts or TSFA’s, but there are some basic things that can be done so that you are putting your best foot forward when filing your return.

Who Has to File an Income Tax Return?

Most Canadian residents have to file a tax return. If you work in Canada, then you will likely have to pay Canadian income tax. This is the largest deduction from your income and starts at 15% of your gross pay, however some are taxed at a higher rate due to a higher income.

Know the Deadline

The deadline for filing your Canadian tax return is midnight April 30. If you owe income tax, and subsequently file your return later than April 30, the Canada Revenue Agency (CRA) will charge a penalty and interest on the unpaid amount.

Collect Your Tax Package, Forms and Information Guides

In order to file you need an income tax package for the province in which you lived and worked. The package will contain things like federal and provincial work sheets, and information about each section. This year, the Canada Revenue Agency stopped mailing income tax packages to those who filed the previous year. You can now download and print the package by clicking here.

Preparation for Filing Your Income Tax Return

Prior to tackling your income tax return, make sure you have the essential information collected and in order. Some of the things to consider are as follows:

• Know you social insurance number and those of anyone you may be filing on behalf of.
• Be sure to have you tax information slips that have been sent by employers, banks, and business which tell you and the CRA how much income you received and how much tax has been deducted.
• If you have earned money through your own independent channels, be sure to have all your self-employment info together.
• Any receipts for tax deductions.
• If you were a student, then be sure to have any information on tuition, interest payments, etc in order.

Choosing the Best Way To File Your Taxes

Unlike previous years, you can no longer file your income tax return over the phone. Though you can still file your income taxes by mail or have an income tax preparer file them for you, the online option is the one being encouraged by the CRA.

The benefit of doing your taxes online, and registering for direct deposit, is that if you are to receive an income tax refund then the money will be placed directly into your account. This process usually takes 2-3 less time than mailing your tax return, and with the many options for free tax programs online, will also save on hiring a company to do them for you.

There are still many Canadians that do not have safe access to the internet, and other that do not feel comfortable with their online ability, therefore, filling out your taxes on the worksheet provided by the CRA, or having a professional prepare your taxes are still very viable options.