Filing your taxes can be stressful—but it doesn’t have to be. Follow these few easy tips to make filing your taxes easier, more efficient, and an all-around piece of cake.
Taxes! Even the word can send people running for the hills. And with the deadline still a few months away, a lot of Canadians would rather not think about it until the last minute. But if you start early, break it down into steps, and rely on the help of your trusted accountant, you can make sure to file your personal tax return quickly, properly, and best of all, with the most tax savings possible. So let’s dive in and learn how to do taxes right.
1. Start Early
The deadline to file your personal tax return isn’t until April 30, 2022. But even if that seems far off, you’re better off getting some of your paperwork in order now rather than scrambling at the last minute.
At the very least, it helps to collect all of your documents into a single place—whether print, digital, or both—so that when it does come time to file your taxes, you’ll be ready. Examples of relevant documents include charitable donation ships, RRSP contribution receipts (you can contribute up to March 1! [link to blog 1]), and receipts for tax-deductible business expenses. Talk to your accountant to find out what paperwork you might need—and how else you can get the ball rolling early—so that when April hits, you’ll be well ahead of the game.
2. Familiarize yourself with COVID-specific changes (or ask your accountant)
As we enter year three of the pandemic, the Canada Revenue Agency (CRA) continues to provide certain tax accommodations and adjustments to taxpayers. While many of these changes may not be applicable to your unique circumstances, some, like the ability to claim a deduction for certain home office expenses, might.
To make sure you follow the rules and get the most out of these accommodations, check out the CRA’s list of COVID-specific tax changes on their website. Or better yet, ask your accountant how you might be affected, or stand to benefit.
3. Consider Tax Software
That being said, if your tax situation is a bit more complicated—if you own a business, for instance, or have capital gains or losses—or you simply want to make sure to get the most tax savings possible, a professional accountant is the easiest, best, and quickest way to get your yearly taxes out of the way.
4. Create a CRA Account Online
Even if you file your taxes with accountants, it’s a good idea to sign up for a CRA E-Services account—whether an individual account, business account, or both. This will allow you to review tax filings from previous years and access your T4 slips (which record your annual employment earnings) and any other key information that you or your accountant may want to have on hand. You can even set up automatic deposits, if applicable.
And fear not: creating a CRA account is easy.
5. Reach Out to Your Accountant—Early
Everyone’s tax circumstances are unique. That’s why we recommend reaching out to a tax accountant as early as possible in the new year. An accountant can help you gather and review documentation, walk you through all the steps necessary to properly file your taxes—and best of all, help you maximize your savings. Whether it’s business expenses, medical expenses, RRSP contributions, capital gains or losses, or even student loan interest, accountants know how to take the unique conditions of your entire financial picture into consideration in order to get the best return possible.
6. Don’t Miss the Deadline!
Last but not least, don’t miss the deadline! It may sound obvious, but many people don’t realize that there are financial penalties and interest that come with filing late. And the sooner you file your taxes, the sooner you get your refund (if applicable).
If you haven’t yet filed your taxes for previous years, get in touch and we’d be happy to help you out.
Final Thoughts: The Early Bird Gets the Worm
There are many aspects to filing your taxes, but our advice really boils down to this: start early, and reach out to a professional. Aside from saving you countless hours, needless stress, and the headache of doing it all on your own, accountants can make sure you file your taxes on time, file them correctly, and optimize savings.
Here’s to smooth sailing in 2022! Happy filing