6 ways to make this year's tax season easier
Author: David Leto
Source: 50plusfinance
The new tax season is upon us.
There are ways to make it easier so nothing is left out. Here are six tips to consider.
1. Get organized
Organization is a top priority to receive the maximum refunds and avoid potential audits. All of your paperwork must be ready so you can efficiently file your taxes. If you didn't have your work organized already, then you must take time to do so now.
Ensure receipt of your T4 slips before the due date when it's supposed to be delivered. Pull out all receipts and invoices related to business expenses. Locate bills for university tuition or student loans. Finally, organize the paperwork related to tax-deductible donations.
Once the information is gathered you want to separate it per its section on the tax form. Thus, income, interest, and dividends are first. Deductions and credits are underneath that information. If anything is missing, then see if it can be retrieved online.
2. File as early as possible
You don't have to wait for your T4 slip to arrive before you file your taxes. You can start as early as 12:01 a.m. on January 1. As long as the government offers updated tax forms, you can start adding information when it comes to deductions and tax credits.
You actually don't have to wait for your T4 or T4A to include income information. You'll be able to pull the data from your last pay stub or year-end investment statement. The one thing you'll need to close things out is the employer's or investment firm's government ID.
3. Have funds available for payments
Unfortunately, there are times where you'll owe taxes. This is something you might be aware of before the new tax season. Especially if you collected non-taxed unemployment or ran your own business.
For these situations, you want to have the necessary funds to pay taxes due at the time of filing. If you don't have them available when you complete the forms, then work to get the funds so they're available when the official filing date comes around.
4. Invest maximums Into retirement funds
One way to reduce your tax values is to maximize your retirement investments. This should be done at the end of the previous year for some. Other types, like a tax-free savings account (TFSA), might allow you to make contributions at the time of filing. Take advantage of this to minimize tax liabilities.
5. File online
There are plusses to file taxes online in Canada. First, your fear of on-time delivery by mail is minimized. Online filing through companies like Cloudtax sends your information directly to Ottowa and the provincial governments.
Second, you receive your refund much faster. If you decide to file online then watch out for underlying fees. There shouldn't be any if you file a standard T4. However, companies might charge extra if you need to file line-item taxes for your business.
6. Let someone else do It
Having a professional handle your taxes takes a huge burden off of your shoulders. They not only put together the documents but they also review information to see if any further reductions can be made on your taxes.
In the end, they can help increase the refund you thought you'd receive. Yet, this doesn't happen without following step one in this process.
You still need to organize all of the required paperwork. The tax professional can't produce the best outcome for you without the necessary T4 & T4A slips or the required invoices and receipts.
The above steps might seem daunting at first. However, you don't have to implement them all at once. Regardless if you file on your own or through a tax service, preparation is at the heart of everything.
When you have all of the required documents, filing your taxes is much easier. On top of that, it results in a maximum refund that can help support your family in the new year.
This article was written by David Leto from 50plusfinance and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.
