Five great tips to help you get through the tax season
Tax season. It’s upon us again, and if you’re like most people, this isn’t exactly your favorite time of the year. This year, however, it’s different, because you’re reading this article! Today, we will be providing you with several tips in order to make your tax season more manageable and more efficient. In fact, if you handle your finances right throughout the year, you might even start enjoying tax season!
With our tips, you can get a head-start on your taxes and be well ahead of the game for the rest of the year.
1. Set up an account at the Canada revenue agency
This will make your life much, much easier. You’ll be able to have access to all your previous years tax filing, not to mention it will have an electronic version of all previous records. Most importantly, it will include all the various income slips from your various income sources such as employment, investments, and interest. Note that if you omit anything, the CRA actually charges you an omittance fee! So if you haven’t done this yet, visit the CRA website and make your life a little easier.
2. Start filing early
This one is especially important if you have a tax refund coming. The earlier you file, the earlier you’ll get your tax refund. In addition, the wait time to receiving your notice of assessment will be drastically increased the closer you are to the deadline. Lastly, filing late (after April 30th) means you’ll be subjected to a minimum 5% late filing fee!
3. Take advantage of the various registered accounts like the RRSP or TFSA
These accounts will help you reduce your tax obligation. An important deadline is for the RRSP. If you contribute by March 1 (Less than 2 weeks!) you’ll be able to count the tax deduction towards your 2017 tax year. If you wait until after, however, it’ll have to be counted towards your 2018 tax year. The TFSA will be a handy tool for afterwards, as any profit made inside a TFSA is not subject to tax! It can definitely be a helpful tool for the remainder of the year.
4. Talk to an accountant about all the tax credits and deductions you could qualify for
One thing a lot of people miss out on is the long list of tax credits and tax deductions they could get. You can do a lot of research yourself by looking at this link here, or if you work with a tax professional, they could walk you through the possible deductions and credits you may be eligible to claim.
5. Be smart with your tax return
It’s always great to get a tax return. The question is, what do you plan to do with it? One great idea would be to put it right back into your RRSP, if you have the room. If you don’t, you might think about placing it into a TFSA, or use it to do some financial planning. There is always the option of spending it on a luxury item, but we can’t in good conscience suggest that, no matter how much fun it might seem.
We hope this gives you a good idea of how to get started on your taxes and hopefully by the end of this tax season, you’ll be a regular tax wiz!