We’ve assembled some things to know when filing taxes in Canada
Spring is here – well, sort of if you ignore the chilly weather and snow lying around – and that means tax season is upon us.
It’s that awful time of year (for many) when we must gather up all the necessary paperwork (T4s, T4As, RRSP statements, receipts, and more); and then determine if we have enough deductions to lower our taxes owed, break even, or perhaps get a refund.
Some have tax professionals do all the work, others file for themselves, and others (like me) get our taxes ready before having accredited bookkeepers double check the numbers and file on our behalf.
So, with all that laid out, let’s get into the things you should know about filing your taxes in Canada.
The deadline (for most Canadians) to file taxes in Canada is April 30, 2023. Since that date is a Sunday, taxes which have a filing date on or before May 1, 2023, will be considered on time.
An exception is made for those who are self-employed – and their spouse or common law partner – as they have until June 15, 2023 to file on time. Small business owners should be aware of all your entitlements and requirements, and free tax help is available through the government’s Small Business Liaison Officer.
If you have a balance owing, your payment is due on April 30, 2023. Your payment will be considered on time if the Canada Revenue Agency (CRA) receives it, or a Canadian financial institution processes it, on or before May 1, 2023.
There are several ways to file your taxes, including the traditional paper tax return mailed into the CRA; electronic filing through NETFILE-certified tax software; through a tax preparer using EFILE-certified software; and more.
Community volunteer tax clinics are being set up throughout Ontario to provide free advice and help with filing taxes, which can be done on site. The District of Muskoka is hosting tax clinics at their offices in Huntsville, Bracebridge, Gravenhurst, and at the public libraries in MacTier and Dwight. Find out the one closest to you at: Find A Clinic.
You may be eligible for new tax credits, which include an air quality tax credit; first-time home buyer’s tax credit; a labour mobility deduction for tradespeople and more. Check out What’s New to see what’s available.
Make sure you have the right tax slips from your employer(s). Whether it’s a T4, T4A, T5 or T3, having them provides the necessary information (and proof of income) when doing taxes. More on the subject at Tax Slips.
Not everything you spend money on is a deduction. That’s true even if you work from home. Knowing what is, what isn’t, and how to calculate the appropriate amounts (as well as provide proof) is what separates potential audits from those whose taxes go smoothly. A comprehensive list as well as more info on each subcategory can be found at Deductions and Claims.
It’s probably a good idea to use a tax professional to file – if you can afford to. While there are a ton of resources and free help available as well as discounted nationwide franchises, it’s also a “you get what you pay for” situation when it comes to filing taxes. You don’t want to owe because a mistake was made, and credits not properly applied. That scenario happened to me my graduating year as half my income was self-employed, freelance. To save money, I used an H&R Block on Bank Street in Ottawa. The low-grade staff member who did my taxes didn’t have a clue and I ended up owing over $1,000. The next year I went to a real accountant, paid a bit more, and ended up with a significant refund because they used my school credits to reduce my tax burden.
With those basic things to know about doing your taxes (and links to more in-depth information), I wish you good filing and many happy (or at least decent) returns!