Did you know two out of five Canadians wait until the last two weeks of the tax season to file their taxes? If you’re one of them, check out the following tips to make sure you file on time.
1. Know your deadline: The filing deadline for personal income tax and paying any taxes owed for the 2018 tax year is April 30, 2019. However, if you’re self-employed, the filing deadline for your (and your spouse or common-law partner’s) return is June 15, 2019.
Be sure to pay any taxes owed on or before April 30 to avoid arrears interest charges.
2. Gather your tax slips and receipts: Gather and organize your tax-related documents, such as your prescription receipts, donation receipts, and tax slips. Here are some of the most common tax slips:
• T4 slip: An information slip prepared and issued by your employer to tell you and the CRA how much employer income you were paid and the amount of tax that was deducted in a tax year.
• T5 slip: An investment income slip that includes interest, dividends, and certain foreign income, prepared and issued by a bank or a financial institution for you and the CRA.
• RC62: An information slip issued to you if you receive the Universal Child Care Benefit, which reflects payments received.
• RRSP contribution receipt: A contribution receipt from your financial institution to indicate any contributions made.
3. Figure out your income tax bracket: Where does your income fall in both the federal and B.C. income tax brackets? Find out with the chart below:
4. Get expert help: If you need help with preparing and filing your return, consider hiring a CPA. If you plan to do your own taxes, be sure to visit the Chartered Professional Accountants of British Columbia’s RRSP and Tax Tips site at www.rrspandtaxtips.com for more tips.
5. If you get a tax refund: Consider contributing early to your RRSP. The earlier you put your money into your RRSP, the earlier you start making tax-free compounded earnings. Also consider maximizing your Tax Free Savings Account (TFSA). The TFSA contribution room for 2019 is $6,000.
6. Get ready for 2019: Don’t want to be in a rush when it’s tax time again next year? Understanding the changes for the coming tax year can help you prepare for the year and reduce the taxes you may owe. Check out a story on 2019 tax changes at www.industryupdate.ca.
This article was prepared by the Chartered Professional Accountants of British Columbia, which notes that tax rules relating to these tax tips are complex. This is not intended as tax advice, and you should not make tax decisions based solely on the information presented in these tips. You should seek the advice of a chartered professional accountant before implementing a tax plan or taking a tax filing position.
editorial@accjournal.ca
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