It’s no secret that most of us hate tax time. Between trying to find all of those darned receipts and filling out the paperwork to making an RRSP contribution and, well, just #adulting, it’s not exactly a fun time of year.
That’s probably why in the weeks leading up to the Canadian tax deadline, a study commissioned by tax experts at H&R Block found that two out of five Canadians still hadn’t filed. Yikes. And here you’d think that most of us would want to get our refund, no?
“People find it to be a stressful time,” explains H&R Block tax expert Lisa Gittens. “Tax season comes right at the beginning of the year. We’re coming out of holidays, the kids are going back to school and boom! It’s tax time. When you’re stressed, everything feels complicated, even if its simple.”
Fair enough. So what are some steps we can take in order to make this time next year a lot less stressful? Here are some of tips, straight from the expert herself.
Get professional advice
It makes sense that you’d want to save a few bucks and file taxes on your own — especially if your return itself isn’t that complicated. Plus, there are so many programs out there that can help the process along. But if that’s the route you want to take, Gittens advises you to get professional advice first.
“That advice costs absolutely nothing, but if you fail to ask the right question, it could be extremely costly to you,” she says. “In the short term, you could end up paying more taxes. If you fail to report something, you could pay a fine to Revenue Canada. If you fail to claim a credit, you could end up paying more taxes. Asking costs you nothing, but it can and will save you money.”
Ask the right questions
So how do you know exactly what kinds of questions you should be asking the pros? Gittens says it’s a matter of taking a look at your life events from the last year. If you’ve gotten married or had a kid, the way you’re filing your taxes will change. Have you sold your house or made any major renovations? Did a parent move in with you? Asking an accountant or tax specialist about the types of receipts you can and can’t claim will help you with a lot of paperwork in the long run.
“People come in with all of these receipts or things they’re expecting to claim,” she says. “70 per cent of those receipts are of no value, because when we speak to their unique situation, none of those things apply.”
So asking about receipts ahead of time will save you time and money.
Stay up to speed on any changes
Another big reason why tax time is so stressful is the fact that our tax laws are constantly changing and evolving. One year, you can write off your transit passes, and the next, the government has taken them off the table. You’re told you can claim your kid’s swimming lessons, but then all of a sudden you can’t. It can be a lot to take in, but knowing about those changes — which are usually revealed once a year during the federal budget announcement — can save you a lot of time and effort.
“There’s one place that Canadians should go to for tax information — one,” Gittens states. “That is directly to the Canada Revenue Agency’s website. They’re on social media. They post things specifically under different categories. They tell you not only how to file, but they have the additional schedules that are required when you are filing your tax return.”
Get — and stay — organized
We’re totally guilty of throwing all of our receipts into a shoebox or plastic bag and then not wanting to sort through them come January, February and March. However, Gittens explains that once you’re up to speed on what you can and can’t claim, all you really need for a basic tax return is a marked envelop in a drawer.
“Typically your T4 is the last thing to arrive. During the year, you may have done repairs to the home, gone to the doctor, accumulated medical receipts, gave to charity. Have bus passes for the first six months of 2017? Put all of that in the envelop,” she explains. “Thirty-four per cent of people who have not yet filed say they haven’t had time to organize their paperwork. This way, when your T4 comes, you add it to the envelop and you’re done.”
Contribute to your RRSP
One of the benefits of talking to a tax specialist or accountant well before the deadline is that they can advise you on how much to contribute to your RRSP so that you can get a refund instead of owing money. If you wait to have that conversation though, the RRSP deadline (which is different than the tax deadline) will have passed.
“Instead of paying CRA, you’re paying yourself by putting money in the RRSP, and you’re getting a refund. It’s a win-win,” Gittens says.
In order to make it even less painful, she also recommends contributing a minimum of $100 every month to your RRSP, so that you’re not worrying about coming up with a lump sum come tax time.
These days, you can do everything online, including filing your taxes and getting a refund. The CRA has worked pretty hard to update its site and now gives Canadians access to everything they need once they register for My Account. There you can automatically access your T4s, find out when and how you’ll be getting any refunds, and even track GST and child benefit payments throughout the year. It’s a nifty, little place to have everything at your fingertips.
So what if, despite all of your best efforts, you still find yourself weeks away from the deadline next year? Because you know, life happens. Gittens says that there’s no need to stress — but you do need to be patient. Come the end of April, accountants and tax specialists everywhere are inundated with questions, calls and emails that force them to work many extra and frustrating hours. If that alone isn’t motivation to start a little earlier next year, we don’t know what is.