End-of-Season Tax Tips to Remember Before You File

Tip 1: Utilize MyCRA and Auto-Fill My Return for efficient tax filing

In today’s digital age, managing your taxes has never been easier or more efficient, thanks to tools like Auto-Fill My Return and MyCRA from the Canada Revenue Agency (CRA). The CRA has expanded its My Account offering by providing a mobile app called MyCRA, which enables you to access your tax information and pay your tax bill on your phone. Visit the CRA website to see everything you can do with this app.

In order to use MyCRA, you must first register for the CRA My Account service. Registering online with the CRA grants you access to your personal tax information and simplifies the filing of your returns.

Once you have a CRA My Account, you can complete your taxes by using Auto-Fill My Return through TurboTax. This service auto-populates your tax return with the data the CRA has on file in your account. This not only saves you time, but also reduces the risk of errors, ensuring a better tax-filing experience.

By linking your CRA account directly with TurboTax, the process of filling out your tax return becomes almost effortless. TurboTax uses the data from the Auto-Fill feature to ensure all your information is accurate and up-to-date, allowing you to review everything easily before filing. The integration also means that TurboTax can provide tailored advice and insights based on the most current data, helping you to maximize your deductions and credits.

To learn more about CRA My Account, check out TurboTax’s definitive guide to using CRA My Account.

Tip 2: Know your deadlines to avoid penalties and maximize payments

Awareness of tax deadlines is the key to avoiding unnecessary penalties and interest charges. In Canada, personal tax returns are due by April 30. Any balance owing is also due on or before this date.

If you own an unincorporated business, the tax-filing deadline is extended to June 15; however, it’s important to note that any balance owing is still due on or before April 30.

Other key deadlines include:

• March 1 for Registered Retirement Savings Plan (RRSP) contributions—unless that date falls on a weekend, then it is the first Monday following March 1
• December 31 for charitable donations
• March 15, June 15, September 15, and December 15 for quarterly personal tax instalments

Tip 3: Make use of carryforward balances and deductions

Many taxpayers overlook valuable carryforward balances and deductions from previous years’ tax returns that can still be utilized. Whether it’s tuition amounts or investment losses, revisiting past returns can uncover opportunities to lower your current tax bill.

Here are some common places to look for carryforward balances:

1. Unused tuition amounts: Check for any unused tuition, education, and textbook amounts from prior years that can be carried forward to reduce your current year’s taxable income.
2. Charitable donations: If you haven’t claimed all your charitable donations, you can carry forward any unclaimed amounts for up to 5 years, optimizing your tax benefits over time.

Unused RRSP contributions: If you paid money into your RRSP but you haven’t claimed it, you can carry forward this amount indefinitely to use as a deduction in future tax years when it may benefit you more. This could potentially reduce your taxable income when you’re in a higher tax bracket.

1. Medical expenses: If your medical expenses weren’t claimed in the past, you may be able to carry them forward to the next year, allowing for a larger claim under certain conditions.

Checking for carryforward balances not only maximizes your deductions; it can also uncover valuable opportunities to decrease your tax liability and enhance your financial planning.

Imagine a student, Sarah, completed her university education in 2022. During her final year, she paid $8,000 in tuition fees. After applying the necessary amounts to reduce her tax payable to zero on her 2022 tax return, Sarah still has $5,000 of unused tuition amounts remaining.

Sarah started her first full-time job in 2023, earning $50,000. She can carry forward the $5,000 unused tuition amount to her 2023 tax return. By applying this amount, Sarah can reduce her taxable income from $50,000 to $45,000. This reduction could potentially decrease the amount of tax she needs to pay for 2023, taking advantage of carryforward balances.

Tip 4: Optimize deductions

To make the most of your tax deductions, first get a solid grip on what you can claim. This means keeping up with tax rules and all the financial savings you can access, including medical costs, donations, and even your home office. It’s important to keep track of everything you might be able to deduct throughout the year.

Don’t forget to look back at old tax returns and notices of assessment. You might find deductions you missed or can carry forward. In short, smart tax planning means being active in managing your finances, keeping neat records, and taking advantage of all the tax breaks you can.

Consider John, a software developer earning $75,000 annually. In the 2022 tax year, John contributed $5,000 to his RRSP but chose not to claim the deduction on his tax return that year because he had other deductions that reduced his tax payable balance. He deferred claiming these contributions because he anticipated a salary increase that would put him in a higher tax bracket in 2023.

In 2023, John’s salary increased to $90,000, placing him in a higher tax bracket. Remembering his unclaimed $5,000 RRSP contribution from 2022, John claimed it on his 2023 tax return. As a result, he reduced his taxable income from $90,000 to $85,000.

Tip 5: It’s not too late for expert help

Navigating the complexities of tax laws and regulations can be daunting, especially for those facing unique or complicated financial situations. Fortunately, it’s never too late to seek professional guidance. Tax experts can offer personalized advice, ensuring you make informed decisions and maximize your deductions.

A tax expert can provide personalized advice tailored to your unique tax situation, helping to optimize your tax returns and potentially uncover deductions and credits you might not be aware of. This expert guidance can be invaluable in navigating the complexities of the tax system, ultimately saving you time and money.

In fact, you can connect with a TurboTax expert for personalized and same-day assistance.

End the tax year strong

Effective year-end tax planning is a critical step for Canadians aiming to enhance their financial well-being. By utilizing tools like MyCRA, staying ahead of deadlines, leveraging carryforward options, optimizing deductions, and seeking expert advice when needed, you can maximize your tax savings and enter the new tax year stress free.

Take the first step toward a more financially savvy future by leveraging TurboTax tools and resources designed to make tax filing a breeze.