“The hardest thing to understand in the world is the income tax.” — Albert Einstein
I was one among many people who used to dread filing taxes. The tax terminologies, countless number of boxes on the tax forms and finally, the confusion over where to insert figures associated with earnings and deductions; a great concoction for an absolute nightmare. However, I must admit that one can become aware of the intricacies of taxes, by becoming mindful about finances.
When to file a tax return in Ontario
The last day of April is the deadline to file tax returns unless it falls on a Sunday. If it does, CRA will consider taxes filed on time, if they are received or postmarked on or before May 1st. For the self-employed and their spouse, the deadline stretches till June 15. However, they must still pay taxes on or before April 30th, if they owe money to the government.
You need to
1) Collect all tax information slips provided by your employers, banks, and businesses. This will provide a clear picture of total earnings and income tax that was deducted for the calendar year. T4 — Statement of Remuneration Paid, T4A(OAS) — Statement of Old Age Security and T4RSP — Statement of RRSP Income are a few examples of these slips.
2) Gather all the receipts and information pertaining to tax deductions and credits. Before that, the difference between a tax deduction and credit is that the former reduces the amount of income that is subject to income tax, whereas the latter reduces the amount of tax owing. Transit passes, union dues, charitable donations, rent or property taxes, moving expenses — all can be claimed under tax deductions. Ontarians can apply for several tax credits, according to the government of Ontario, like Ontario Trillium Benefit, Senior Homeowners’ Property Tax Grant, Ontario Children’s Activity Tax Credit etc.,
3) Find out your allowable RRSP contribution limit for the year, which can be found in the latest Notice of Assessment.
Multiple options to seal the deal …
1) NETFILE: This is an electronic tax-filing service that allows you to send your individual income tax and benefit return directly through the CRA website using the Internet and an NETFILE-certified software product. If you are a low-income earner, you can get this software for free. Another advantage of this option is the instant acknowledgment of receipt of tax return and best of all, you will receive the tax refund within two weeks, based on your situation.
2) Mail: Although it just costs a stamp to mail your return, it can take up to eight weeks to hear back from CRA regarding the tax return status.
3) EFILE: Ideal for complex tax situations or the self-employed. This service can cost anywhere between $80 to $220 for tax services offered to you by tax professionals or accountants.
P. Ganga | DBPC Blog