The deadline for filing your personal taxes April 30th is almost here. Here are some things to remember before you start the filing process.
1. Most Canadian residents need to file an income tax return for the previous year to pay the correct amount of income tax owed, pay back overpayment of benefits or to claim benefits.
2. If you file late and owe money the CRA will charge you interest and penalties on the unpaid amount. So even if you know that you will have to pay, help yourself by at least filing on time.
3. Before you tackle your income-tax return be sure that you have all the following information on hand.
- Information from the CRA including your notice of assessment from the previous year.
- All your tax information slips such as T4’s from employers, as well as your investment information slips and RRSP contribution receipts from your bank.
- Information on other income such as self-employment income.
- Receipts for tax deductions such as medical expenses and donations.
4. Decide how you are going to file your taxes either a paper copy or online using NETFILE, and make sure that you have the correct tax package for your province. The advantage of using NETFILE is that you get immediate confirmation that your return has been received and if you are owed a refund you will get it much faster, sometimes within two weeks of filing.
5. If your taxes are complicated for example if you run a small business it is often better to use a tax professional to prepare and file your return, however to save yourself some money you should still spend time sorting your receipts and getting everything ready for your accountant.
6. There are a few different ways to pay any income tax due; by mailing a cheque to the CRA, using online or telephone banking, using the CRA’s My Payment Service or making a payment at your bank. If you have to pay your taxes by installments you can set up a payment arrangement with the CRA.
7. Set up a direct deposit with the CRA so that your tax refund and any benefit payments are deposited directly to your bank account.