In the last year, we’ve seen several tax arrangement changes for Canadians, such as extended deadlines. As things begin to ease into normalcy, many people expect business and personal finance to keep rolling in, and thus activities with the Canadian Revenue Agency (CRA) can be revived again. The stress of filing taxes hasn’t changed that much. But a little planning and diligence can quicken the process of filing your taxes. Here are some helpful tips to help you do your taxes in Canada.
Filing online makes it quick and easy.
For many people, tax preparation sets the stage for filing taxes. But what type of tax preparer do you use? It might interest you to know that even the Canadian Revenue Agency recommends using an online tax preparer or tax preparation software. Filing taxes online comes with several benefits, including speed, convenience, and accuracy. There are many free tax software products you can leverage to make the process quick and simple. In Canada, one of the most widely used options is TurboTax.
For over 20 years, TurboTax has provided eligible taxpayers with the best free online tax software. A quick Google query for “TurboTax Canada for free” would bring up the TurboTax website for more information about the service options and packages. You can opt for the TurboTax Free edition that helps moderate-income taxpayers file tax returns with no additional costs. For many Canadians, one of the perks of choosing TurboTax is its customer service. The Intuit product features a phone support tool that makes it easy to communicate with a tax expert in-app.
Keep receipts and records.
A tax professional will likely tell you that keeping relevant tax documents is one of the essential best practices for all filers. It’s best to keep the documents for about six years from the end of the tax year on record. For more information, you can call a tax expert for CRA’s restrictions on keeping receipts and tax documents. Usually, the official statute of limitations should provide the standard protocols and procedures for condition audits and reviews.
Whether you’re filing as a small business owner or an individual, the overarching aim is accountability. Storing receipts and online tax records digitally can be a much better option. It saves you from losses when your certified public accountant (CPA) sells their business or retires. But in dealing with digital services, make sure you opt for a service provider with encryption features to ward off cybercriminals.
Look out for tax credits and deductions.
There are many ways to save a little money during the tax season. Generally, Canadians who do their taxes on time can avoid several penalties and late-filing fees. So, the first avenue to consider in keeping costs low can be timely filing. The CRA can charge up to 5 percent of your balance owing on the due date of return. Additionally, they can charge an extra 1 percent for each month you keep delaying payments.
In the case of debts, the CRA can help you resolve your tax situation without paying penalties. Usually, a tax relief based on your income threshold or payment arrangement scheme is the way to go. Alternatively, registered business owners can recover some business expenses on each return. Some of these expenses include motor vehicle or use of home expenses. Also, individual or business owners can check the official CRA website for further information on available tax credits, deductions, and other cost-cutting measures.
Report all your income.
Canada tax laws mandate you to report on all incomes. This includes but is not limited to tips, money earned from the provision of ride-hailing, and accommodation services. Sometimes, taxpayers may forget to add a revenue stream when filing. Most online tax software companies have a “refile” feature to alter the financial data on your tax return.