Get ready for tax season!
It’s that time of the year again.
According to the Canadian Revenue Agency (CRA), the deadline to file your personal income taxes is April 30th for most individuals and June 15th if you or your spouse/common-law partner are self-employed. It’s easy to wait until the last minute to file, but if you plan ahead and file your income taxes early, you may receive refunds faster (if applicable) and make sure any entitled benefits or credit payments are not interrupted. Plus, you’ll minimize the stress of scrambling against a deadline and feel a lot better knowing that this task is done!
Here’s what you need to know to be prepared for filing your personal income taxes for yourself and other family members.
Whether you’re filing your taxes yourself or have someone else doing it for you:
- Gather and organize your documents – If you’ve been doing this throughout the year, then you’ve got a head start. If not, it’s not too late, but make sure you set aside a few hours to do so, because it will take time (unless your tax situation is very simple). Grab yourself a coffee or tea, put on some music and get ready… You will need:
- Your previous year’s tax return for reference
- Income T and R tax slips (T4, T4A, T5, T3, T4A(OAS), T4A(P), RL-1, RL-2, RL-3, etc.)
- Records of any other income (e.g. self-employment, rental income, and other investment income including expenses)
- Receipts for tax deductions (RRSPs including any group retirement receipts, medical expenses including dental expenses, charitable donations, childcare or caregiver expenses, disability certificates, mortgage and property tax statements, student tuition and interest statements, etc.)
- Consider life changes that may impact your income taxes – You may not realize it, but even seemingly minor changes to your life situation may make a difference to your tax situation. Make sure you assess this for your parents too if you’re preparing their taxes. Here are some key questions from Turbotax to consider:
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- Did you get married or divorced?
- Did you move because of a job or schooling, sell property, or do major renovations for accessibility?
- Did you go back to school; or did your child go to school?
- Did you have a baby?
- Did you, or someone you care for, become disabled or seriously ill?
- Did you start a business? Even a side gig like driving an Uber counts.
- Did you start renting out your basement?
- Did you or your parent(s) turn 65 and start collecting CPP?
Other questions to consider:
- Did you hire a caregiver or nanny or your family or for your parent(s)?
- Did you work from home during the tax year?
Special considerations
Work-from-Home Tax Credit
If you worked from home during the 2021 tax year, you may be eligible for a tax credit. You can claim up to $500 for working from home in 2021 (and up to $400 for 2020, in case you haven’t yet filed your taxes for 2020) per individual. For more information, please visit this link from the CRA.
Climate Action Incentive
If you live in Alberta, Saskatchewan, Manitoba, or Ontario, you will automatically be assessed by the CRA for eligibility for this tax-free amount paid by the Government of Canada to help offset the cost of the federal pollution pricing. You do not need to apply for it. The amount you receive will depend on your province and your family situation. Find out more here.
Free Help Filing Taxes
If you have low income and a simple tax situation (or you’re helping a parent who is), you/they may qualify for free help filing taxes. To check your eligibility for help at a free tax clinic, visit this site or more details.
COVID-19 Benefits
According to the CRA, “If you received benefits issued by the CRA in 2021, such as the Canada Recovery Benefit, a T4A information slip will be mailed to you by the end of February 2022. Residents of Quebec will receive a T4A slip and an RL-1 slip.” If you have any questions regarding your unique situation, you can contact the individual tax enquiries line from Monday to Friday (8am to 8pm local time) and Saturdays (9am to 5pm local time). Click here for more information.
References:
https://www.canada.ca/en/services/taxes/income-tax/personal-income-tax/get-ready-taxes.html
