It’s that time of year again when Canadians start scrambling, to get their tax return completed before the deadline to avoid a penalty. This year that date is April 30th, 2018. But don’t worry there is still plenty of time to get your tax return completed and sent off the Canada Revenue Agency (CRA). There have been a lot of changes made over the years that make it easier to file quickly and on time. Here’s what you should know.
Penalties and fees
If you owe money, the CRA starts charging interest on the balance one day after the deadline passes. Most Canadians do file their return online, a method the CRA supports and recommends. Online filing means it’s received immediately with a digital record. The CRA has a list of certified software packages and web applications. If you file by mail, you can have a paper tax return mailed to your home. For Canadians with simple tax situations, you can also file by phone.
If you haven’t done it already, open an account on the Canada Revenu Agency website. It’s a secure service for tax filers. You can use the auto-fill function in the CRA certified tax preparation software NETFILE. It allows parts of your return to be automatically filled in, including your information from your T3, T4, and T5 slips.
File no matter what
Even if you’re expecting a return, it’s still a good idea to keep the CRA up to date on your income situation, otherwise benefit payments, such as the Canada child benefit (CCB) may be delayed. This applies to anyone with no income as well. File your return to take advantage of all government tax credits due to you.
Changes for this year
Many tax credits are now eliminated. For example, the children’s arts and sports credit are no longer available. As well as a textbook credit for university students. But there also new tax credits available. The Canada caregiver credit (CCC) gives tax relief to individuals with a dependant who has a mental or physical impairment. Canadians can now take their disability tax credit application that has been filled out by a nurse practitioner to have it certified. There is also a medical expense tax credit if you need intervention to conceive a child.
Tips for self-employed
If you are self-employed, you have until June 15th to file your return. If your income situation increased dramatically this year, and you have been making income tax installment payments, you may want to figure out what balance you may owe by before the deadline. There is the new CRA Biz App that will allow you to view your transactions and pay your balance.
When to get professional advice
Tax time can be overwhelming for many of us. This is the time of year where accountants and tax preparation professionals are working overtime to get people the help they need. The CRA is a great resource to answer any of your tax questions. There is also help available for low-income Canadians thought the Community Volunteer Income Tax Program clinic. To find a clinic near you and to see if you’re eligible, go to http://www.cra.gc.ca/volunteer.
What do with your return?
If you are expecting a return this year, you may be making plans now on how to spend it later. The best thing you can do with your tax return is to reinvest it into your Registered Retirement Savings Plan (RRSP) This will kick-start your retirement savings for 2018 and helps reduce your overall income for next year. The other option is to use that money to pay down high-interest debt. If you are carrying a balance on your credit card or line of credit this money could help you on your journey to being debt free. Remember, get your taxes in by midnight on April 30th. Happy filing!