According to a famous quote, there’s nothing quite as certain in life as taxes. Whether you’re studying for your degree, working at your first job, or even about to retire, tax filing is an inevitable part of life here in Canada. If you’re filing for the first time, this process can get a little confusing. It’s still a valuable lesson in financial planning, and one that you will continue to use for years to come. We’ve outlined these 5 great tips to keep in mind when you’re about to start your very first tax return.
Also, don’t forget that the Canada Revenue Agency tax deadline this year is midnight by May 1, so make sure you complete your return by then and avoid any possible late-filing penalties.
1. Get Organized
Have all the information handy. This includes your T4 statements, other income statements, expense receipts, charitable donations, and more. It’s a great idea to have all of them organized by category. This will help you pull up the information faster while filing, and also access it easily in case you need it later on. Ideally, the the CRA advises you to keep your tax records and documentation for 6 years in case your return is selected for review.
Here’s a checklist of some of the documents you should have before you start filing.
- Employment Income (T4)
- Employment Insurance Benefits (T4E)
- Tuition/Education Receipts (T2202A)
- Universal Child Care Benefit (RC62)
- Social Assistance Payments (T5007)
- Interest, Dividends, Mutual Funds (T3, T5, T5008)
- Workers’ Compensation Benefits (T5007)
- Old Age Security and CPP Benefits (T4A-OAS, T4AP)
- Other Pensions and Annuities (T4A)
- Any other information slips
- Medical Expenses
- Child Care Expenses
- Adoption Expenses
- Moving Expenses
- Interest Paid on Student Loans
- Transit Pass Receipts
- Political Contributions
- RRSP Contribution Receipts
- Charitable Donations
- Professional or Union Dues
- Tool Costs for Tradespersons and Apprentice Mechanics
- Child, Spouse or Common-Law Partner Support Payments
- Children’s Arts and Sports Programs
- Office-in-Home Expenses
- Disability Tax Credit Certificate
- Notice of Assessment/Reassessment
- Canada Revenue Agency Correspondence
- Rental Income and Expense Receipts
- Declaration of Conditions of Employment (T2200)
- Automobile/Travel Logbook and Expenses
- Volunteer Firefighters Certification
- Search and Rescue Volunteers’ Certification
- Sale/Deemed Sale of Stocks, Bonds or Real Estate
- Business, Farm or Fishing Income/Expenses
2. Create a CRA My Account
With the Canada Revenue Agency’s My Account, you can track your refund, check your benefit and credit payments, view or change your return, view your RRSP limit, and even set up direct deposits for payments. One of the most popular features of TurboTax is Auto-Fill My Return, which allows you to instantly import official tax information (such as a T4 and RRSP investment receipts) directly from the CRA My Account. With just a few clicks, your tax return is populated with the most accurate and up-to-date information available, so you can start filing your return much faster.
3. File Your Return Accurately
If you’re going to submit your return using NETFILE, then you have to make sure you’re your information is accurate. If any of your personal information such as name, date of birth, or SIN does not match what the CRA has on file, it might get rejected. Double check everything before you submit it, and make sure your name is exactly as it appears on your Social Insurance Number document.
According to the CRA, the penalty for omitting or misstating information on your return is either $100 or 50 percent of the amount of understated tax or overstated credit, whichever is greater. It is never advisable to lie on your tax form, as you might be faced with consequences more severe than just fines and penalties.
4. Filing by the Tax Deadline
Filing your return late means that you might have to pay penalties as well as interest on any balances you owe to the CRA. It can also delay the payment of some of your tax benefits.
- For individuals, the tax deadline is usually April 30, but since that falls on a Sunday this year, the CRA is accenting submissions until midnight on Monday, May 1.
- If you are self-employed, you must file your taxes on or before June 15, 2016. But if you have balance owning then you have to pay it on or before May 1 deadline.
- If you filing your incorporated business taxes, then you should calculate your deadline based on the fiscal year-end of your business. This is usually December 31 for most businesses, so the deadline would be June 30.
If you’re looking for answers to specific questions, do check out our information community forum. AnswerXchange is a very helpful resource where experts and community members answer questions and offer advice for filing your return.
With TurboTax, we’ve taken the confusion out of filing taxes and made it so much easier to complete your return. All you have to do is answer a few simple questions to get started and we’ll help you get the biggest refund this year.