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With the extended June 1 tax filing deadline just two weeks away, more Canadians are taking crash courses in taxes. According a new survey from Turbo Tax Canada, by late April, six-in-10 respondents planned to do their taxes from the safety of their homes instead of heading out to a physical tax preparing location.
That’s a sharp contrast from last year when a DIG Research survey found only 35 per cent filed their taxes directly online. According to the Canada Revenue Agency (CRA), up until February of this year, before the COVID-19 pandemic, roughly one-third of individuals filed their taxes through the online NETFILE system.
In an age of bad news, it’s a sliver of good news that more Canadians take tax matters into their own hands. Doing your own taxes is a great way to understand how the tax system works and create a long-term tax strategy that can save thousands of dollars over the years.
However, Turbo Tax is advising Canadians that delaying their tax filing will delay any refund or benefits coming from the government. Here are some other last-minute filing tips from Turbo Tax.
- File on time even if you can’t pay your tax bill. Interest charges on amounts owing have been deferred to September 1, but there are penalties associated with late return filings. Get the return completed and filed by the deadline to avoid any extra costs.
- File a tax return even if you don’t think you have to. There are many reasons why you must file a tax return, but benefits like the Canada Child Benefit, Guaranteed Income Supplement (GIS) and the GST/HST tax credit, are based on your tax return and you can only qualify if you file one. Also, you might have a refund coming your way if your earnings were such that you overpaid with your tax withholdings from your paycheque. This often happens with students; especially with tuition tax credits.
- Make sure that you are maximizing all of the allowable deductions and tax credits available to you based on your personal situation. This includes registered retirement savings plans (RRSPs) contributions and childcare deductions, or medical and tuition non-refundable tax credits.
- Medical expenses, for example, can span any 12-month period as long as it ends in the tax year. Depending upon your situation in 2019, or even the current year, you can plan your claim accordingly to maximize your return.
- If your kids are attending an eligible education institution, such as college or university, remind them to log into their student account at their school and download their T2202 forms. Even if they are not earning money now, they must file their return to declare tuition expenses. They can either carry forward the unused amounts to another tax year, or transfer up to $5,000 to their parents or even grandparents.
- Make sure you have your direct deposit information on your CRA My Account so you can get your refunds and any other paid benefits quickly. If you don’t have a CRA My Account, sign up.
- If you are self-employed, don’t forget your calculations for business use-of-home expenses, and business use-of-personal vehicle expenses. Remember to maintain a mileage log to validate the use.
- If you file your return and realize you’ve made a mistake, don’t panic. The CRA allows for adjustments on returns, which can be done through your CRA My Account under “Change My Return,” or using a refile option on your tax solution, if it’s available. You can also complete the T1-ADJ request form and mail it in, but you need to wait until you get your notice of assessment first.
Payback Time is a weekly column by personal finance columnist Dale Jackson about how to prepare your finances for retirement. Have a question you want answered? Email email@example.com.