3 Tips For Getting Your Personal Income Tax ReadyLets Get Started
AUTHOR: Louise Hadley
We get it! Taxes can be scary!
Don’t worry, we speak CRA.
If you file your income tax using a tax service, like Mason Miller, there are some things to know to help make the tax preparation process go more smoothly.
Check out the tips below to help you feel more organized and in charge of your taxes this year.
1. Don’t Rush Submitting Your Paperwork
The most common changes we make to tax returns are the result of individuals filing their taxes too early.
Employers have until February 28 to file T4s; likewise, banks and investment companies also have the same filing deadlines for investment slips like T5’s and RRSP Contributions.
As the creation of these slips occurs throughout February each year; it is best to wait until at least the 2nd week of March to bring your income tax paperwork into your tax service provider.
2. Register for CRA – My Account
Ever find yourself combing through your filing cabinet to find one tax slip or another? Don’t fret – the CRA (Canada Revenue Agency) offers a service on their website that gives you access to all of your personal income tax slips in one place.
As a tax preparer, we highly recommend each taxpayer register for this service.
You can obtain copies of the notice of assessments (for your mortgage renewal for example), view benefits you are entitled to (GST/Child Care Benefits, etc) and check your RRSP & TFSA contribution room, among a plethora of other services that are available to you. To get started, head over to the CRA website and signup for MY ACCOUNT. You can also learn more about My Account here.
3. Make Sure You Have All Of Your Slips
As an authorized E-filer; we have an obligation to assist you with collecting all income tax data to the best of our ability. Through a variety of questions and reviewing last year’s income tax filing; we can help you fill in any gaps in paperwork there may be. Ultimately it is each person is responsible for their own tax filing, so we take a team approach to help you fulfil your income tax filing obligation (see tip above!).
Here are some commonly missed personal income tax slips:
Being one of the most common slips it may seem strange that the Employment Income T4 slip is first on our list! Naturally, we think of our most current employer when we think of our income; however, sometimes if you change jobs near the beginning of a calendar year you may not remember that there were some final payments made from your old employer which resulted in a T4 being filed for you.
Often our Student Filers may have a few jobs during the year from which they must get a T4 from each employer.
Most commonly known for Pension type income the T4A also has other functions and can be often forgotten at the time of your income tax filing. If you are a student receiving scholarships you will receive a T4A from each organization that gave you the funds.
Sometimes if you are part of a trade union; Taxable Life Benefits that are deemed as income are prepared on a T4A that will be separate then your other earnings. Lump-Sum Payments of any reason are often reported on a T4A. These are some samples of when this slip can be forgotten about.
For interest and investment earnings outside of a Tax-Fee-Savings-Account, your bank will provide you with a T5 slip. Sometimes we see these come out as late as mid to late March to individuals mailboxes.
If you drew Employment Insurance Benefits for unemployment, sick leave, bereavement leave, maternity leave or parental leave (to name a few functions of the EI Program), you will receive a T4E. Similar to the notes above on the T4, sometimes we stop receiving these benefits early on a calendar year and therefore we sometimes forget receiving them.
RRSP contribution slips run in two calendar periods. March to December is Part A & Jan to Feb is Part B. For the 2019 income tax season, your Jan and Feb 2020 RRSP contributions must also be reported on your 2019 income tax return. This is often a final item that tax preparers can be waiting on before dropping off their tax slips to their tax preparer.
This topic is often overlooked because some people consider it a nuisance to keep all the documents and medical receipts in order.
Although you have to be in a certain tax situation to be able to claim this non-refundable tax credit (which really means if you have enough medical expenses; they can be used to reduce your income tax balance, if your income tax balance is zero, medical expenses will not put you in a refund position) it is still worth consideration.
If you do qualify there are a number of deductions that fall under this category, please see medical expenses for information directly from CRA where you can search by medical expense type to see if the expense qualifies as a deduction for you.
In the future, start keeping track of your medical receipts.
4. Small Business & Rental Income
When having either of these two items as an income source, we will meet to discuss and review any paperwork you have so we can help you summarize your income and expenses. We offer summary sheets and guidance to our clients to help track and organize this information easily and efficiently.
These two categories require an in-depth working knowledge of income tax guidelines, which we are happy to help you work through and happy to provide guidance on the income and deductions.
A special note that when you report Small Business Earnings on your Personal Tax Return, your filing due date is not until June 15th each year (instead of the normal April 30th). However, if you are going to have an income tax balance you still have to pay this balance by April 30th.
The links below provide the CRA overview of each income and expense line for your tax return. With detailed explanations on the do’s and don’ts for Vehicle Expenses and Business Use of Home deductions as well.
5. Know Your Deadlines
RRSP contribution deadline – March 2, 2020
Personal Income Taxes Due – April 30
Previous year balance owing due – April 30
Small Business Earnings Deadline – June 15
Last But Not Least
If you are feeling overwhelmed by your taxes, let us help. All you need to do is email or drop off your relevant paperwork as described above and we will do the rest!
We are your Barrie income tax experts!
Relax. We’ve Got This.