As a self-employed person or even as an employee, you will no doubt experience tough work weeks and long hours as tax season is in full swing. Even the most dedicated specialists can find the fast pace and long hours challenging. How can you avoid burnout during the busy season while maintaining high levels of productivity and excellent customer service? A healthy habit should stay top of mind as long as deadlines and a demanding workload do.
You probably have more on your mind than just paying your taxes. But the spring deadline will come before you know it. You don’t want to find yourself in a situation where you have to file your t2 tax return quickly because you waited until the last minute. When you put something off, you run the risk of forgetting to post an important financial document or not saving money because you didn’t take a certain deduction.
1. Check your tax return for the previous year
Reviewing your previous year’s tax return will help you find out what receipts (T4, T5, T3, etc.) you need to ensure you don’t miss another tax period. Please note that the CRA will charge penalties for any lost earnings and the penalties become more severe with each additional year this occurs.
Please note that all coupons must be issued by February 28th, except for T3 and T5013 coupons, which must be issued by March 31st.
2. Tax credits and deductions: what are they and what applies to you?
The tax credit can be non-refundable or refundable. A non-refundable tax credit can only reduce the amount you owe. In the case of a refundable tax credit, you will receive the remaining amount of the credit back. However, with a deduction, you may not get your money back, but it will reduce your taxable income dollar for dollar. There are many tax credits and deductions available based on individual situations. To find out what tax credits and deductions may be available to you, go to the CRA website.
3. Change of address, marital status, or dependents? Inform your accountant
If you have changed address, marital status, and/or had or adopted a child, please let your accountant know so that the appropriate updates can be made. Some of these changes will adjust the benefits and credits you receive and ensure that payments are received without delay.
4. Prepare summaries and organize receipts
The more organized stuff that goes into your tax preparer, the more efficiently it can be prepared, which can save you money in tax preparation expenses. Use Crowe MacKay Tax Organizer to help you organize your taxes most efficiently and effectively.
5. The residence exemption: what is it and how does it apply to you?
A primary residence is a dwelling unit and can be any of the following: a house, cottage, condominium, apartment or duplex, trailer, mobile home, or houseboat.
In general, reporting the sale of one’s own home is a non-taxable event for natural persons. However, in most cases, after you sell your primary residence, the CRA requires you to share basic information on your tax and benefit returns, such as the year of the sale, year of purchase, residential address, and sale proceeds. Disclosing this information will allow you to claim the full exemption for your primary residence and avoid paying tax on any gains from the sale.
6. File your tax return on time
There are two main personal tax deadlines depending on whether you are a natural person or an individual. Talk to a tax accountant near me today.
Tax deadlines for natural persons
Canadians hired by an employer receive a T4 form from the company they work for. In these cases, natural persons have until April 30 to submit a tax return.
Tax deadline for the self-employed
Self-employed Canadians have until June 15 to file their t2 tax returns. This term also applies to the spouse or life partner of a natural person. However, all payments due must be made by April 30. If the balance remains unpaid after this date, the CRA will start charging interest on any amounts owed.
7. Application of medical expenses to taxes
When it comes to claiming medical expenses on your taxes, keep good records and receipts throughout the year. However, a time-saving tip is to ask your pharmacy or chiropractor for an annual report so you don’t have to save receipts all year. For more details on what can be claimed, see the CRA-eligible medical expenses that can be claimed on your tax return.
8. How long do I have to keep tax documents and supporting documentation?
It is recommended to keep receipts and supporting tax documentation for at least 6 years. This is because the CRA may request documents as proof of any deductions or credits you have claimed. Documents may include:
- Fiscal statement
- T4 modules
- Annual mortgage yields
Receipts and declarations for t2 tax returns including gifts, RRSP contributions, child care receipts, mortgage interest, medical bills, property tax payments, and alimony/child support paid or received, etc.
Hire an expert to help you. Find an accountant near me.
Because taxes are individual, each person’s situation will be unique. While talking to a friend or relative can be helpful, seeking advice from a qualified tax professional can provide advice regardless of the circumstances and ensure you get the maximum refund.
Your taxes will never remain stable if one thing is certain in life. You should always contact a professional to help you determine how tax changes may affect your performance.
Important points to remember
Even the busiest professionals can struggle with the intense pace and long hours. As deadlines and heavy workloads come and go, good habits should remain at the fore. By sending out these letters early, you will be able to predict who plans to become a customer, stay a customer, or decide not to return. To help you determine how potential tax changes could affect your performance, you will need a professional. Be prepared for unforeseen circumstances that could affect your taxes.
With this tip, you’ll be filing your taxes like a pro in no time. An accountant near me can help. Track your tax documents throughout the year and at the end of the year, you’ll have everything you need to make next tax season run smoothly.