It’s that time of year again… good ol’ tax season is here, and as always, many people have unanswered questions as to how they should be doing their taxes and if there’s any information they should know.
The Top Five Canadian Tax Return Questions Answered
- Where Do I File?
If you’re old-fashioned and choose to paper-file your return, the address where you send your tax return depends on your geographic location. The Canada Revenue Agency (CRA) sends mailing labels in your tax package each year, but if you happen to lose them or do not receive your labels for some reason, you can visit the CRA Web site to obtain the address of the tax office where you should send your return. You can also call 1-800-959-8281 to request this information.
- When Is My Return Due?
Your income tax return is due on April 30 each year, or June 15 if you or your spouse were operating a business that fiscal year, although if you owe taxes, your payment is due on or before April 30. If you owe taxes, ensure your return is received or postmarked before midnight on the due date to avoid late-filing penalties and interest.
- What Happens If I File Late?
If you miss the deadline to file your taxes and you owe, you’ll automatically be charged a penalty of 5 percent of your balance owing. Additionally, you’ll face a penalty of 1 percent of the balance owing for each month your return remains outstanding, to a maximum of 12 months. Also, the CRA charges interest, compounded daily, on outstanding balances and penalties. Currently, the interest rate on overdue taxes is 5 percent, but this could change quarterly.
- Can I Change My Return If I Find A Mistake?
Yes, you can file a T1 Adjustment using form T1-ADJ, “T1 Adjustment Request,” to amend your return for any mistakes or errors you find after submitting it. You can also request changes online under the “My Account” option on the CRA Web site.
- Where Can I Get Missing Forms?
The majority of the CRA forms are available for download from the CRA Web site. To order forms by phone, call 1-800-959-2221. If you’ve misplaced or didn’t receive the package and guide sent to you by the CRA, you can pick up a copy at your local post office.
Top Five Commonly Overlooked Tax Tips
- Medical expenses: If you pay a healthcare premium through payroll deduction, this is considered a medical expense as well as any deductibles or out-of-pocket expenses that are not covered by your plan. If you purchase healthcare travel insurance, this can also be claimed as a medical expense.
- Disability tax credit: Even if you think you won’t qualify, do not qualify but it’s still recommended that you ask your doctor to review the criteria on the T2201 medical disability form. This form is submitted to the CRA, and they will determine whether you meet the qualifications.
- Report your income: Any child under 18 who works part or full time during the summer months may be entitled to a tax refund if their income is below the basic personal amount. Even if no tax is deducted, reporting the income will increase the child’s RRSP contribution limit for future years.
- Get your benefits: Those turning 19 before April 1, 2017, should be filing a 2015 income tax and benefit return even if they had no income. This ensures they will collect the GST/HST credit for the quarter following their 19th birthday.
- Determining dependents: Although some people would beg to differ, pets are NOT dependents. However, if your parents live with you, are over age 65 and have a low income, you may be able to claim them as dependents.
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