April 30 is coming faster than you may realize.
Gathering your tax information is one thing, preparing your tax return is a completely different animal.
First decision: Do it yourself or take it to a tax prep service?
If you choose to use a service, organizing your information will not only reduce the chance of an error or omission, but may actually lower your preparation fee.
Speaking of fees, when sourcing a tax prep service it may be wise to ask how the fee structure works. Is it truly a flat fee or are there “extras”? What happens if there is a CRA review? How will the preparer help you, and at what cost? Is the preparer even available year-round?
Regardless of your choice between professional tax preparer, home software program or even paper forms, there are some things you should do that will help you get organized for your tax preparer or for yourself.
Visit the Canada Revenue Agency (CRA) website to familiarize yourself with this year’s tax schedules. Review CRA’s tax tips and changes so you don’t mess up or miss opportunities. You should set up your CRA “My Account”, including direct deposit since it appears this will be mandatory in 2016.
Find a copy of your 2013 tax return, hopefully you didn’t chuck it, and review its detail. This is a great reference tool. If you used a tax prep service last year and you weren’t given a complete copy, note-to-self, ask for one this year.
Fully open all your 2014 slips. Watch for duplicates. Make sure the slip has your name on it. Set aside information clearly not needed for input. Group like items together such as T4, T4A, T5, etc, and all medical expenses, donations, etc. There is value in doing this even if you are using a prep service.
If you are doing it yourself, input all your personal information required on the return. Missing a detail will foul your filing.
Enter what you easily can identify on the schedules. Surprisingly those items you aren’t sure about may fall into place as you move along with the input of familiar items. Tick the numbers on the slips as they’re input. Use a calculator when calculations are needed.
For those items you don’t know where to input, read the slips because they might not have to be entered. The info on them may also direct you where to enter them. If you still can’t figure it out, use the CRA website or even Google it.
Double check everything, and review the diagnostics if using software. Unfortunately some home programs allow e-filing with improper overrides and even omissions, only to be rejected by CRA or worse, trigger a CRA review.
The last filing date is Thursday, April 30, and filing late with taxes payable creates interest charges and perhaps a penalty of up to 50% of taxes payable. And if you have a refund coming, why not file now? Last count there was $700M of unclaimed refunds sitting with CRA.