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How to file your own taxes

Illustration: Miki Sato

When’s the deadline to file my taxes?

You must send in your individual or family 2013 income tax return by April 30, 2014, either by e-filing or mailing in your paper return. (As long as it’s postmarked by midnight on April 30, it’s okay if your actual package arrives at the specified tax office a few days later.)

What if I miss the deadline to file my taxes?

If you don’t owe any outstanding taxes, missing the deadline isn’t a big deal; you’ll just have to wait longer to get your refund. But if you do owe the Canada Revenue Agency money, you’ll pay a penalty of 5% of what you owe, plus 1% more for each full month you’re late, to a maximum of 12 months. If you can’t afford to pay now, you should still file on time; you’ll avoid the late fees and the CRA will work with you to set up a payment plan. Another reason to get those taxes in: late filers are more likely to get audited since they’re part of a smaller pool of tardy returns, says Christie Henderson, author of Tax Tips for Canadians For Dummies and an accountant in Oakville, Ont.

What papers and receipts do I need to file my taxes?

An accordion-style folder works best to keep all of your papers and receipts together. You’ll need:

  • Forms: Gather T4 income slips from your employer, your Registered Retirement Savings Plan (RRSP) contribution slip, T3s for income from trusts or mutual funds, T5s for interest or dividend income and T4A(P) for pension income.
  • Charity: Dig up receipts for any charitable donations from 2013.
  • Medical: Gather documentation for expenses not covered by your employer’s benefits plan, like dental, acupuncture, massage therapy and physio.
  • Self-employment: If you work for yourself, pull together receipts representing your expenses, including home office supplies, travel and advertising.
  • Extra income: If you make money from babysitting or crafting on the side, you need to report it, says Gabe Hayos, vice-president of taxation with the Chartered Professional Accountants of Canada. “If it’s more of a hobby, where your expenses exceed the revenue, it’s not something you need to include,” he says.

How can I save?

The Canada Revenue Agency website  is a great reference guide, and even has benefits calculators to estimate how much you might get back. Do you know about these credits?

  • Child tax benefit : Non-taxable monthly fee paid to families to with kids under 18. Benefits depend on your income.
  • Universal child care benefit : $100 per month for kids under six to help with the cost of daycare or in-home care.
  • Children’s arts tax credit : Claim up to $500 per child for the cost of artistic or cultural programs like music lessons.
  • Children’s fitness tax credit : Claim up to $500 per child for physical activity programs like soccer or hockey.
  • Public transit tax credit : You can claim the cost of your monthly or annual travel passes for subways, trains or buses.
  • Family caregiver tax credit : If you have

    a dependent who is mentally or physically impaired, you can claim up to $2,000 in tax credits.

  • First-time donor’s super credit : If it’s your first time donating to a charity, a new-in-2013 supplemental credit will be added to your contribution. The more you give, the higher the percentage.

How do I file my taxes?

Online:  If you’ve never filed online, make this the year you get with the e-program. “Filing electronically is the best and fastest way, and you can retain your receipts at home,” says Hayos. “It’s clearly the way the world is going.” Another advantage of filing online: You’ll get your refund faster, and you can track the status of your refund on the CRA website under My Account. However, if you’re paying taxes in more than one province, you’ll still need to paper file.

Tax software:  If your taxes are relatively uncomplicated, hand-holding tax software like TurboTax makes the process easy. These programs essentially interview you and then fill out your return for you, says Henderson. The software changes year to year as tax laws do, so toss out last year’s version and buy new. You can also e-file for free using the CRA’s Netfile service. attaching an electronic copy of your completed return. (If you prefer to go old-school, print out a hard copy and mail it in.)

Accountant:  However, if you own your own business, have moved across the border, or have come into some money (like a lottery win or an inheritance), it might be worth your while to pay an accountant to handle your return for you. Word of mouth will help you find someone, or you can check out the directory section of the chartered general accountants’ website for your province. Remember to bring your organized accordion folder, as well as two to three years of previous tax returns, says Hayos.

What happens if I don’t file my taxes on time?

Accountant Christie Henderson says that about 10 percent of Canadians don’t file each year, because they’re scared, overwhelmed or think they don’t owe. Even if you are due a refund, you’ll still want to file; after all, don’t you want that money in your pocket ASAP? However, you won’t be charged a penalty if you don’t.

For those who are on the hook to the taxman, it’s best to file this year’s return (and any others you’ve skipped) sooner rather than later, since the late fees increase each year. If the CRA has contacted you, it’s time to call an accountant. But if they haven’t, the Voluntary Disclosures Program lets you come clean without penalty or worry about getting in trouble with the law. You may even be able to avoid paying interest, depending on your circumstances. To get the process going, fill out an RC199 form from the CRA website  and mail or fax into your area tax centre.

As for next year, if you need but can’t afford tax-filing help, free clinics are offered from mid-February until April for those who qualify. Check your province’s chartered professional accountants’ organization to find one near you.

Originally published in the Walmart Live Better March 2014 issue.

Category: Taxes

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