Top 5 tax tips you need to know
Tax filing can be complicated, and this year provincial and federal governments have introduced many changes that can only add to the confusion. To help, here are five ways to confidently manage the filing process.
1. Take note of key dates. Whether you owe money or not, it’s important to file your taxes on time to avoid the interruption of benefits, interest and any penalties. The CRA can charge you penalties of 5 per cent on what you owe, plus an additional 1 per cent for each month you fail to file, for a maximum of 12 months. To avoid the stress of filing last-minute, use your phone to set up reminders to flag important tax-related dates.
2. Stay organized. Ensure you gather all forms, slips and necessary receipts throughout the year. Organize everything you need to file your return, such as tuition receipts, medical bills by category and date and file them away. You can also take photos of hard copy receipts and add these to your online folder as well, making it much easier if you must look back months, or even years, later.
3. Get some credit for being kind. If you, your spouse or your common-law partner made a charitable donation, you might be able to claim a non-refundable tax credit for your generosity. When completing your return, not only can you claim the donations you made during the year, you can also claim any unclaimed donation amounts from the past five years.
4. Crunch numbers with a tax calculator. It’s never a bad idea to get an idea of what your tax situation might look like ahead of time. All you need to do is enter your income, taxes paid and RRSPs – and remember the March 2 deadline for RRSPs.
5. Don’t be afraid to ask for help. If figuring out where to start or which receipts to keep organized is too much, ask for a hand. Gather your receipts and documents and speak to a tax expert who can answer any questions you may have. (News Canada)
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