Here are a few simple steps you can take to reduce the stress of tax time this year:
1. Have one place that you collect all tax information (a file folder, envelope, drawer or shoe box, etc.). When you get a receipt or a tax form put it there and that way you don’t have to spend as much time gathering your necessary information when you are ready to prepare the return.
2. Be familiar with changes to tax credits. Check the Canada Revenue Agency site for a list of current changes. Did you know you may be eligible for credits or deductions for things like childcare, public transit costs, fitness expenses for your children? There are many more, if you know where to look for them.
3. Get help if you need it. For some people, taxes are confusing and complicated. If you have low income or are unable to prepare or pay for preparation of taxes, the Halifax Public Library and some community centers will provide volunteer tax help to prepare your taxes. For others, hiring a professional tax preparer / bookkeeper will be your best tax decision. Getting this help may increase your refund and will greatly reduce your stress.
4. Students are eligible to claim a lot of expenses and credits and should always file a return, even if they are not earning income. This way, they can either transfer their credits to a supporting parent or grandparent, or they can transfer the credits forward to future years when they may need them to offset income. Tax refunds following graduation are an easy way to start making lump-sum payments on student loan debt.
5. It’s never too late to file overdue returns. Many people assume that if they miss the tax deadline of April 30, that’s too late to file the return. It’s not. However, if you will owe income tax, late filing penalties and interest will occur if it’s filed later than the deadline. If you don’t file for many years CRA can make arbitrary assessments (an “estimate”) as to your income and it may not be accurate causing taxes owing for that year. Not filing will not make you eligible for government programs, like the Canada Child Tax Benefit (CCTB), GST credit or any new tax rebates that may be announced.