Not only a great song by Europe ( “It’s the final countdown …), but also where we are now as we have entered the remaining weeks of tax season for 2020.
As we navigate through the last 15 days of April, we are offering some tips on getting those taxes completed on time and with ease.
We will be adding onto this article until we get to the tax filing deadline of April 30th, so be sure to come back and keep checking for something new!
April 30th Tip
So, “This is the end, Beautiful friend, This is the end…” (thank you The Doors) of the individual tax season for 2020 that is. Was it an easy one, not for many; were there hurdles and questions and lots to accomplish, many would say yes!
What we need to do now is take some things we learned from this past tax season and use it to help ourselves have a smooth one next year. How can we do that?
- Prepare throughout the year – meaning, receipts you get in set aside in a tax folder so you don’t have to hunt them down and scramble to get together for yourself or your tax preparer.
- Understand your benefits – if you are applying for or receiving special benefits that are taxable, make sure you are clear of the tax implications before you apply for them, so come tax season, there won’t be a surprise if taxes are owing.
- Deal with your refund – if you got a refund, there are some decisions you need to make to ensure that money works for you. Do you have debt to pay down or RRSPs to increase? Consider your monthly cash flow, will it benefit you now or can you save the money for later.
- Consider using Mint, a personal finance app to help manage your money throughout the year. You can focus on goals and see everything in one place.
- Sign up for CRA My Account if you haven’t already – this will help you manage your CRA account, stay on top of taxes owing, mail, and easy access to your forms and carry-forward balances.
- Thinking about starting your own business this year? In advance of that, be sure you have a plan as to how you will track your expenses and income (like using QuickBooks) so you’ll be ready to file your T2125 next year, and feel confident in how your business is doing.
Until next year, stay healthy and safe!
For those who are self-employed, your taxes are due June 15th, but if you had taxes owing, there are due today!
April 29th Tip
If you end up owing money to the CRA, how do you pay it? Great question and there are some options. You can still pay your tax bill at your bank in person, but as we are working virtually right now, you need a better option.
As an individual, you can set up the CRA as a bill payee in your online banking and the account number is your SIN. Be sure though that when paying the CRA, you select the correct option – if you are paying taxes owing after their due date (April 30), be sure to pick “tax amount owing”, not “2020 tax return”.
CRA My Payment is also an option if your online banking does not offer the CRA as a bill payee option. Follow the instructions, be sure to pick Individual Income Tax (T1), and select the appropriate option; if unsure, use the ? to see more details. Same rules apply here as with the online banking. If paying on time, select “2020 – tax return”, if paying after the due date, that is now “Amount owing”.
April 28th Tip
Thinking why bother filing as you might not owe taxes? It is important to keep in mind that there are benefits and credits you may be eligible to receive but you will only qualify for if you file your income tax return.
The Canada Child Benefit and the GST/HST Credit and GIS (Guaranteed Income Supplement) are based on your tax return and you won’t receive any of the money if you don’t file your return for the tax year.
Don’t forget too that perhaps you may have a refund coming your way, so why wait. By filing your return it allows you to take advantage of various deductions against your earnings and tax credits against your calculated taxes, that could in the end result in you getting money back.
April 27th Tip
“Send me up a drink.” Jokes Major Tom, The count goes on…4, 3, 2, 1″ (thanks Peter Schilling!)
We are in the final 4 days of individual tax season, it has gone fast for this past year that was unique for so many Canadians.
Did you make installment payments last year to the CRA for your individual taxes? The CRA requests these of many individual taxpayers based on the previous year’s filing. If you don’t use auto-fill-my-return when completing your return, make sure to input your installment payments on your tax return, line 47600, before submitting it.
You should have received a document from the CRA, an installment reminder (INNS1 or 2), that tells you what installments to pay in the current tax year, but also provides a summary of what you paid for the previous tax year as the “total payments received for 2020:”.
April 26th Tip
As I was helping family with taxes this weekend (sorry, no tips!) we were very grateful for old unused tuition credits. Over the years and years of schooling our children may have accumulated a high carry-over amount as they didn’t need it when doing their own taxes.
As a spouse, parent, or grandparent, they can designate a transfer up to $5,000 of their current year’s federal amount, less what they used to reduce their taxes. This can be a huge help to both of you, using a combination of current and carry-over tuition credits to help lower those taxes owing.
Using TurboTax Online yourself and want to make sure you take advantage of this credit? Click here to read how to from our support team.
Missed a past tip? Read below for snippets!
See you next year!
Accounting educator, business strategist, and advisor.
Turbo Tax Canada blog editor and writer.
Susan has been an accounting professional for over 20 years and has been working with businesses and individuals and their taxes for the past 13. Education is a passion for Susan, and when not writing or talking about tax for TurboTax Canada, she can be found speaking at events, teaching at Mohawk College, and working with many businesses, bookkeepers and accounting firms as part of her education offerings and her Find Our Bookkeeper™ recruitment program. Susan is known to be approachable but pulls no punches when it comes to the reality of business finance, taxes, and the importance of education.