Filing your taxes is often in the same category as visiting the dentist to have your teeth drilled. You know you need to do it, but would rather put is off until the pain is so unbearable, that you just can’t avoid it any longer. Filing your taxes does not have to be that difficult.
Getting prepared takes very little time and can help you feel better about filing your return on time before April 30th (or June 15th if you are self-employed).
What Is Involved?
There are four simple things you can do to get ready for tax season: (1) Figure out how you are going to file, (2) Know the deadline dates, (3) Get organized, and (4) File on time or before the deadline.
How Are You Going To File Your Taxes?
If your situation is complex or you are simply not comfortable doing your taxes yourself, you should consider using a professional tax accountant. An accountant will work to minimize your current and future tax bills. Your accountant will also be there year round to support you.
Know The Important Dates
After you figure out how you are going to file, you need to find out when your taxes are due and when you should expect to receive your tax slips.
- For most Canadians, the personal tax return must be filed by April 30th. If you or your spouse is self-employed, your tax return is not due until June 15th although your taxes must still be paid by April 30th.
- Your employer must mail or provide you your T4 slip that shows your employment earnings no later than February 29, 2012 .
- The RRSP contribution deadline is February 29, 2012. You will probably receive a contribution receipt immediately or it will be mailed within a few days.
- If you receive income from a mutual fund or receive dividends or interest, you will receive a T3 or T5. These will normally arrive during March.
If you start your filing system now, you’ll save time during the year preparing for next year’s filing deadline. For my personal taxes, I have use single file folder marked “Income Tax”. During the year I place any important tax documents such as my T3, T4, T5 slips, my Notice of Assessment and other important documents such a medical receipts.
File On Time
Don’t wait until the last minute. If you owe the CRA money and do not file and pay on time, you will be assessed interest and penalties. The penalty for not filing on time is 5% of the amount owed plus 1% for each month the payment is late. Don’t Delay – April 30th Is Looming explains this pretty well.