Tax time is stressful for all of us, whether it’s for your business or your personal taxes. That’s why KBH Chartered Accountants, with some help from the CRA, have compiled a list of tips that could save you time and money.
At tax time, try to remember these eight things:
1. Do your taxes
Even if you didn’t receive any income in 2017, you may still get a tax refund and be eligible for benefit and credit payments. For example, families who are eligible for the Canada child benefit (CCB) can receive up to $6,400 annually for each child under the age of 6 and up to $5,400 annually for each child aged 6 to 17. You, and your spouse or common-law partner, if you have one, have to do your taxes every year so the CRA can calculate how much you could receive, and to continue receiving your benefit and credit payments without any interruptions. This includes payments such as the GST/HST credit and related provincial payments, the guaranteed income supplement, and advance payments of the working income tax benefit.
2. Make sure you claim tax credits and deductions
There are tax credits and deductions you may be able to claim on your return, like the working income tax benefit. Not sure what tax credits and deductions you may be eligible for? Contact a KBH Chartered Accountant to help you out.
3. Report all your income
Make sure you report all your income. You should have most of your slips, such as T4 slips, from your employer, payer, or administrator by the end of February. If you have not received, or you lost or misplaced, a slip for 2017, ask the issuer of the slip for a copy.
Some income you earn may not be included as part of a tax slip. Income such as; tips, money earned providing accommodations, and ride sharing, regularly selling stuff at a flea market or online, providing tutoring services, handy-man or snow removal services – all of this is considered income that must be reported.
Did you sell your principal residence in 2017? If so, you have to report basic information on your return to claim the principal residence exemption.
4. Make valid claims
Make sure you know what you can and cannot claim. Sometimes non-deductible amounts, such as funeral expenses, wedding expenses, loans to family members, a loss on the sale of a home designated as a principal residence, and other similar amounts, are claimed by mistake.
If the CRA finds that you made a mistake or made a claim in error, it will change your return.
5. Get tax help
If you need help doing your taxes, contact your accountant! Or ask a close friend or relative to refer you to one.
6. File on time
If you have a balance owing and do not file your return on time, the CRA will charge you a late-filing penalty. The penalty is 5% of your balance owing on the due date of your return, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. Even if you cannot pay your balance owing by the filing deadline, you can avoid the late-filing penalty by filing on time.
If you cannot pay the amount you owe by the due date, it’s best to contact the CRA before then. The CRA will work with you to resolve your tax debt or other CRA program debt. You may be eligible for a payment arrangement or taxpayer relief.
If you receive benefit payments, like the Canada child benefit, and you did not do your taxes on time, your payments can be delayed or stopped.
If you have never filed a return or haven’t filed for a few years, contact your accountant or the CRA immediately for help.
7. Keep receipts and records
Keep your receipts and other supporting documents for at least six years from the end of the tax year to which the records relate. Sometimes returns are reviewed to make sure that income, deductions and credits are correctly reported. If the CRA reviews your return, having your receipts and records on hand makes it easier for you to support your claims.
As always, KBH Chartered Accountants is here to help you succeed in all aspects – including ensuring your personal and business taxes are filed correctly and on time. Reach out today and learn more about how we can help: info@kbh.ca