Yup, it’s that time of year again. Cue the stress and pressure – it’s tax season. Revenue Canada’s midnight on April 30th deadline is fast approaching but it doesn’t have to be a stressful ordeal. A little organization and preparation can help to alleviate a lot of tension. If you’re worried about filling your taxes this season, here’s what you can do to get yourself ready. Trust me – the more prepared you are the less stressful it will be. You should know, though, that if you file your taxes late, CRA can and likely will charge a penalty and interest on the amount owing.
Do I have to file?
If you are a Canadian resident who earned an income in the previous year you must file a Canadian income tax return. Why? CRA says we file our taxes in order to pay the accurate amount of income tax owed, to pay back overpayment of benefits such as Employment Insurance (EI), and to claim certain benefits. Benefits that can be claimed include GST/HST credits or the Guaranteed Income Supplement under the Old Age Security Program. It’s not just Canadians who have to file taxes, though. According to CRA, some international and non-resident individuals are also required to file a Canadian income tax return.
Getting ready to file
Before filing your taxes, you’ll need the following:
- Your social insurance number
- Tax information slips, including income records sent by you employers, banks and businesses
- Information regarding other income, including self-employment income
- Receipts to be used for tax deductions
- Personal income tax information, such as your RRSP contribution amount
STOP: Do I sound like I’m speaking another language? If so, your best bet is to hire a professional to walk you through this process in person.
What tax forms do I need?
In order to properly file your taxes, you’ll need an income tax package for the province you lived in on December 31 of the previous year. The package should include the following:
- A return form
- Federal tax worksheet
- Schedules (more forms)
- A provincial or territory tax worksheet
- An information guide
To reduce waste, CRA has decided not to automatically send out tax packages in 2013. Learn more about where to get a Canadian Income Tax package.
Choosing a method
There are currently four ways to file your taxes. Choose the one that best works for you. Your decision will likely depend on the complexity of your return. If it’s pretty straightforward you can likely do it on your own. When it gets more complicated, you might want to hire a professional to review the final paperwork. Here are the methods you can choose from:
1. File online using NETFILE: For more information, visit NETFILE’s website.
2. By mail: Request a package, fill it in and mail it to CRA.
3. Pay a service provider – like H&R Block – to do it for you using EFILE.
4. Hire an accountant.
Remember: The more prepared you are the easier it will be. Tackle this tax season head-on and alleviate some of that tax stress long before the deadline.