Unless you’re anticipating a healthy return, no one gets too excited about doing their income taxes but the following tips from the Canada Revenue Agency (CRA) could help you save money.
- Do your taxes. Even if you didn’t earn any income in 2017, you may still get a tax refund and be eligible for benefit and credit payments, such as the Canada Child Benefit. But you and your spouse or common-law partner, if you have one, must complete your taxes every year so the CRA can calculate how much you could receive, and to ensure you continue receiving your benefit and credit payments without interruptions.
- Claim tax credits and deductions. You may be able to claim tax credits and deductions like the working income tax benefit on your return. Visit canada.ca/taxes-get-ready to learn about new and existing tax measures that could help you save money.
- Report all your income. You should have received your T4 and other slips by the end of February. If you haven’t received a slip, or if you’ve lost or misplaced a slip, ask the issuer for a copy. If you register with My Account, you may have access to online copies of your slips. Still missing information? Use your pay stubs or statements to estimate your income. Keep all of your documents in case you’re asked to show them later. Remember, some income may not be included as part of a tax slip. Tips, money earned, providing accommodations, ride sharing, regularly selling stuff at a flea market or online, providing tutoring services, handyman or snow removal services are all examples of reportable income. If you sold your principal residence in 2017, you must report basic information to claim the principal residence exemption. If you already filed your taxes but didn’t report all of your income or deductions, use the ReFILE service in your NETFILE software to change your return. Visit How to Change Your Return for other options.
- Make valid claims. Sometimes non-deductible amounts, such as funeral expenses, wedding expenses, loans to family members or a loss on the sale of a home designated as a principal residence are claimed by mistake. If the CRA finds you made a mistake a claim in error, it will change your return. Check out Common adjustments.
- Take advantage of free software. You can use free certified software programs to do your taxes online, some of which offer suggestions on which tax credits and deductions you can claim and which benefits and credits you can apply for based on the information you enter.
- Get free tax help. If you need help doing your taxes, and you have a modest income and a simple tax situation, a volunteer from the Community Volunteer Income Tax Program (CVITP) can do your taxes at no charge. Learn more at canada.ca/taxes-volunteer.
- File on time. If you have a balance owing and don’t file your return on time, the CRA will charge you 5 per cent of your balance owing on the due date of your return, plus one per cent of your balance owing for each full month your return is late, to a maximum of 12 months. If you can’t pay your balance owing by the filing deadline, you can avoid the late-filing penalty by filing on time. If you can’t pay the amount you owe by the due date, contact the CRA to work out a resolution. You may be eligible for a payment arrangement or taxpayer relief.
- Keep receipts and records. Keep your receipts and other supporting documents for at least six years from the end of the tax year to which the records relate.