Spring has finally sprung here in Canada, and while most people are getting excited about longer days, fresh flowers and warmer weather, I’m excited because springtime also means tax season! While excitement probably isn’t the first feeling to come to mind for most when thinking about their taxes, maybe it should be. For most Canadians, their tax return is the biggest pay cheque of the year.
Here’s how to make sure you get the most out of your tax return:
File ahead of the deadline
Whether you’re a Canadian Citizen or have Permanent Resident status, you should try to file ahead of the April 30 tax deadline. While some with Permanent Resident or Deemed Permanent Resident status may not be required to file, doing so gets you set up with the CRA for future filing. What’s more, you may be eligible for money back in your pocket! Regardless of your situation, you want to file on time to ensure you get a return in a timely manner if you qualify, and avoid late penalties that go into effect after the deadline if you owe.
Get your paperwork in order
If you haven’t tracked down key documents like your personal information including your SIN, any T1, T4, and/or RRSP receipts and any forms related to property or businesses you own, now is the time. It’s best to have all relevant tax forms in front of you as you begin the filing process, so you’re not pausing and going back. If you’re feeling nervous about what you will owe, you can use a tax calculator to get a ballpark estimate before you get started on your return.
Make it fun!
This is not as impossible as it sounds. A major reason why many of us put off filing our taxes is because it feels time consuming and tedious. However, today there is online software that makes it simple and streamlined (especially if you follow my previous tip!), which also helps you find benefits like the GST/ HST Credit and the BC Carbon Tax Credit to help you save even more. You can see your return tallying on the left side of the screen. Some customers actually say that it can feel like a game.
Use your return wisely
If you receive a healthy return, it can be hard to overlook a shopping spree or vacation, but it may be worth it. Some of my top tips for investing your return to contribute to your financial future include:
● Tackle high-interest debt
● Invest in an RRSP or RESP for your kids
● Start or increase an emergency fund
● Spend where you will see a return, for example on home renovations that can increase your property value
File even if you owe and can’t pay
It can feel tempting to avoid filing if you owe, especially if you’re worried about a tax bill you can’t afford. The truth is, not filing will postpone the inevitable money due. Take ownership of the situation and file now.
To learn more about how to file your taxes as a student or how to file your taxes for free, visit https://turbotax.intuit.ca/tips/.
Matt Lisowski is the General Manger at TurboTax Canada
