Tax season – the most dreaded time of the year
Now that the holiday season is over, Canadians can now look forward to tax season. For many, it’s often a scramble to get their return completed before the deadline, so that they avoid paying any penalties. This year, that date is April 30, 2019. Take a deep breath and get all your ducks in a row, you still have a few months to file with the Canada Revenue Agency (CRA).
Penalties and fees
If you owe money, the CRA starts charging interest on your balance one day after the deadline passes. Many Canadians now file their return online, a method that the CRA supports, and recommends. To file it online means that it is immediately received and there’s a digital record. The CRA has a list of certified software packages and web applications. If you file by mail, you can have a paper tax return mailed to your home. For Canadians with simple tax situations, you can also file by phone.
If you haven’t done so already, open a My Account on the CRA website. It’s a secure service for those who file their taxes. You can also use the autofill function in the CRA certified tax preparation software NETFILE, which automatically fills in part of your return, including your information from your T3, T4, and T5 slips.
File no matter what
Even if you’re not expecting a refund, it’s still a good idea to keep the CRA up to date on your income situation. Otherwise payments, such as the Canada child benefit, may be delayed. This also applies for anyone who has zero income. File a return in order to take advantage of all the government tax credits that you are eligible for.
Important tax credits
The Canada caregiver credit provides tax relief to individuals who are caring for a dependant with a mental or physical impairment. In addition, Canadians can now have their disability tax credit application certified by a nurse practitioner. If you need intervention to help conceive a child, there is also a medical expense tax credit for that.
If you are self-employed you have until June 17th to file your return this year. However if you have a balance owing to the CRA, it is due by the April 30th deadline. If your income situation changed dramatically this year, and you have been making income tax instalment payments, figure out the balance that you owe by the deadline. With the new CRA Biz App, you can view transactions and pay balances.
Accountants and tax preparation professionals are all working overtime during tax season. If you have questions, the CRA is also a great resource. For Canadians who need help with their tax return, and can’t afford a professional, they may apply to the Community Volunteer Income Tax Program clinic. To see if you’re eligible and to find a clinic near you, visit cra.gc.ca/volunteer.
Reinvest your return
If you’re expecting a refund this year, you may be dreaming about how to spend it. The best thing that you can do with your tax return, is to reinvest it into your RRSP. By doing so, you’re kick starting your retirement savings for 2019, which helps to reduce your overall income for next year. Another option is to use that money to pay down high interest debt. If you are carrying a balance on your credit card, or a line of credit, this money could help you on your way to becoming debt free. Most importantly, get it in on time.
Rubina Ahmed-Haq is a journalist, personal finance expert and HPG’s finance editor. She appears on CBC TV and radio, CTV Your Morning, Global Toronto, and writes for ratesupermarket.ca. Follow her @alwayssavemoney. alwayssavemoney.ca