In the words of Benjamin Franklin, “nothing can be said to be certain, except death and taxes.” While there isn’t much that can be done about the former, the latter comes around once a year like clockwork. Get ready to dig out some paperwork because tax season is upon us once again.
Whether you take the do-it-yourself approach or have someone crunch the numbers for you, there’s no avoiding the need to gather up the required information before you start. Take some time to get things in order; much of what you need falls into three categories: Tax slips, receipts, and other important documents.
The first place to start is to ensure you’ve collected all of the relevant tax slips with the information you’ll need to prepare your return. This begins with income slips, such as employment income and other income. It extends to investment and dividend income above $50 not held within a registered account (such as an RRSP or TFSA). Several common forms are listed as follows:
If you’re just starting out and don’t have children, it’s possible you might only receive a T4. A retiree is more likely to receive one or more of the following: T3, T4A, T4A(OAS), T4A(P), T4RIF, T4RSP, and T5.
Next, collect receipts for expenses paid throughout the year that qualify for a deduction. This includes charitable donations, RRSP contributions, and monthly passes for taking transit. Parents can claim expenses for their dependents. For example, those with children aged six or under can claim a deduction of $8,000 for child care expenses.
If you’re self-employed, a detailed record of income and expenses will be required. A logbook that records mileage travelled is necessary if you use your vehicle as a part of your business. Work-at-home expenses can also qualify as deductions.
These receipts lay the groundwork for potential tax savings. Keeping an accurate record of the paperwork can result in fewer taxes paid. Common applicable expenses include, but are not limited to, the following:
- Adoption expenses
- Charitable donations
- Child care expenses
- Children’s fitness and art expenses
- Medical expenses
- Moving expenses (if you move at least 40 km closer to your new work or school)
- Political donations
- Professional dues
- RRSP contributions
- Student loan interest
- Tool expenses (for tradespeople)
- Transit pass receipts
Other important information
Finally, there are a few other pieces of information that are needed. Dig up your notice of assessment and tax return from the previous year. They’ll be useful to reference any tuition or RRSP amounts that can be carried forward into the current year. Further useful information includes, but is not limited to:
- 2015 notice of assessment
- 2015 tax return
- Capital gains/losses
- Child support or alimony information
- Home Buyers’ Plan information
- Lifelong learning plan information
- Principal residence sale information
- Rental property income/expenses
When do I have to file my taxes?
For most individuals, tax returns for the 2016 tax year have to be filed on or before April 30. If you’re self-employed and don’t have taxes owing, the deadline for filing is June 15. In either case, any balance owing for the 2016 tax year must be paid by April 30, including from those who are self-employed.
This year, since the filing deadline of April 30 falls on a Sunday, your return and any amount owing is considered to be on time if it’s received or postmarked on or before May 1.
The last word
Don’t wait until April to start getting all your information together. As the filing deadline approaches, it’s likely that you may forget something and either end up missing the deadline or paying more in taxes. When it comes to filing, a little preparation can go a long way to reduce the stress that comes with filing taxes and save some money in the process.