Tax season is officially upon us, and I am so happy to be joining forces with UFile to share helpful tips and advice on how to get your taxes done the easiest way possible.
Throughout the next few months I’ll be sharing posts specifically tailored for tax season, so to kick things off here are the top 10 things you need to do before filing your taxes.
1. Get All of Your Documents Organized
The key to making tax season a breeze is by staying organized. If you have all of your documents scattered around your house, it can get overwhelming and you may want to delay doing your taxes because of it (causing you more stress down the line).
Luckily I’ve whipped up this handy Tax Preparation Checklist that tells you exactly what documents you need to get your taxes started.
2. Scan All of Your Documents
This may seem a bit time-consuming if you have a lot of documents to scan, however this is a great way to digitally archive everything and to make things more searchable.
Wouldn’t you rather type in a few keywords into your computer to find the document you want instead of riffling through a pile of receipts, bills and forms?
3. Open an Online CRA Account
Having an online CRA account will make doing your taxes so much easier. If you can’t find last year’s Notice of Assessment, need to change your last name because you got married or forget how much room you have left in your RRSP, your account will have all the answers for you.
Visit the CRA’s website to find out how to open your account.
4. Take Note of What Tax Credits You’re Eligible For
The tax rules change every year and so does what tax credits are available. You may already know about the big ones like charitable donations and public transit, but many people forget about medical expenses as tax credits. Did you know you might be able to claim your new eye glasses? Did you know that if you’re celiac you can claim gluten-free products?
There’s actually a lot of medical expenses you can claim that you may not be aware of. Take a look at this in-depth list on the CRA’s website.
5. Be Aware of What Tax Credits You Can Carry Over
There are a number of tax credits you can carry forward to a future year. For instance, if you have tuition credits to claim but only need to use a portion to pay off the taxes you owe, you can carry those credits over to a future year.
You can also transfer credits to your spouse/common-law partner or your or your spouse/common-law partner’s parent or grandparent. For more information on tuition credit carry-overs and transfers, click here.
6. Optimize Your Taxes by Filing at the Same Time As Your Partner
You can do this either by using the same tax accountant or by using the feature on UFile itself (it’s as easy as clicking a check box).
By filing at the same time as your spouse/common-law partner, you’ll be able to help each other out in terms of tax credits and deductions so you can get the most money back in your tax returns.
7. Read the Tax Software Guide
Before filing online with tax software like UFile, it’s recommended to read the user guide before diving in. UFile isn’t just a program that let’s you file your taxes yourself, it’s also designed to teach you how to get the best outcome by filing your taxes smarter.
But to get the best results, you need to read the guide and be an informed tax filer first.
8. Find a Promo Code
Before filing your taxes with any online tax software, do a quick Google search to see if there are any promo codes you can use to bring the cost down.
When I was fresh out of university and about to file online for the first time with UFile, I did just that and ended up saving 15% (which made a big difference at the time).
9. Find Out Which Tax Deadline You Need to File By
That’s right, if you thought there was just one deadline for your taxes, you were wrong. The first deadline is April 30. This is the deadline by which you need to file your taxes and pay any money you owe on your taxes if you are not self-employed (i.e. you are an employee at a company).
If you do not file by that date, you will be charged a penalty fee and if you do not pay your taxes by that deadline you will be charged interest. The second deadline is June 15. This is the filing deadline for anyone who is self-employed (and their spouse/common-law partner).
However, and this is key to remember, if you are self-employed and owe money on your taxes, you still need to pay that amount by April 30 or you will be charged interest.
10. Make a Plan for the Money You Get Back from the Government
Many people see their tax return as free money they can do whatever they want with. The thing is, it’s not free money. Your tax return is your money that you’re getting back from the government because you overpaid on your taxes.
Instead of buying something you don’t need or booking a vacation to Mexico, make the smarter choice by investing it or paying down your debt.