Tax Season - Overcome Stress by Being Prepared
Yes, it’s tax season – AGAIN. Navigating the sea of life’s daily stresses can be challenging enough. What can help us cope with the added challenge of tax season? Being prepared! Here are some tips to help you get organized so you can keep a step ahead of stress.
Mark deadlines in your calendar
For individuals, the deadline is Thursday, April 30, 2020. Sole proprietors have until June 15, 2020 but, regardless of the deadline, taxes owed should be paid to CRA by April 30, 2020.
Communicate with your accountant
Even if you think you know what documents your accountant needs to file your return, it’s worth a conversation to ensure you have not forgot something important.
It is vital that you disclose all sources of income. One tricky disclosure form is a T1135. If you had any foreign assets costing more than Cdn$100,000 dollars, you are required to disclose this. Ask your investment advisor or financial institution for a T1135 report and avoid unnecessary fines.
If you were only partially reimbursed for dental and other claims, be sure to provide a summary from your insurance provider so your accountant can add the unclaimed portion as a medical expense. (FYI: Travel insurance can be claimed as a medical expense.)
Forward any donation receipts that you forgot to claim in the past 5 years. You may still be able to claim them.
Follow up on missing tax slips or receipts
T4 and T5 slips should be received by the first few days of March. You should expect to receive T3 slips by the end of March. If you haven’t received these slips by these times, contact your employer or financial institution asap.
Donation Receipts that you have not yet received for 2019 should be requested by contacting the registered charity.
Medical Receipts can easily be missed. There’s no need to collect all those pesky little prescription receipts. Just ask your pharmacy to provide you with a summary of all the prescriptions you paid for 2019 – it’s usually free of charge. This assures you don’t miss any!
Ensure students in a post-secondary institution file their taxes
Post-Secondary institutions issue T2202A slips that can be used against current or future taxes. Best of all, these credits are transferrable to parents at a maximum of $5,000! Students may also be eligible for additional credits such as the ON-BEN and GST/HST Credits which could mean more money in their pocket throughout the year.
Get your refund faster with direct deposit
Direct deposit ensures your refund is directly deposited into your personal bank account. All CRA needs is your Social Insurance Number, the name of your financial institution, branch/transit number and your account number. It’s super easy to set up, but if you’re unsure, ask your accountant for assistance.
Prepare ahead if you owe tax
If you expect to be paying taxes on April 30, ensure you have set aside some money to pay off your tax liability. It may be good to speak with your accountant, perhaps they can help you develop a tax plan that works for you.
Best wishes from Scarrow Yurman & Co.
as you prepare to make this personal tax season the best one ever!