With tax season just around the corner, many Manitobans are hoping to get some money back from the government this year.
Whether you are gathering receipts, filling out deductions or crunching numbers for provincial tax credits, it can all be overwhelming.
So Global News has compiled some tips to make the filing process a little less painful.
What is the deadline for filing my taxes?
April 30 — if you have a balance owing. The regular filing deadline is April 30, but since that falls on a Sunday this year, the CRA will consider your taxes filed on time as long as they are received or postmarked on or before May 1.
June 15 — If you or your spouse or common-law partner ran a business in 2016. But you still have to pay your taxes by April 30 if you owe money to the government.
What are the tax brackets in Manitoba?
The first $31,000 of taxable income — pay 10.8 per cent in tax
Next $31,001 of taxable income, up to $67,000 — pay an additional 12.75 per cent in tax
Over $67,000 of taxable income — pay an additional 17.4 per cent in tax
How are taxes calculated?
The amount of tax you pay is determined based on how much money you make. You can make various deductions that reduce the amount of income you have to pay tax on.
First, you declare the total, or gross income you made throughout the year, according to IncomeTax, a tax-filing software company.
That can include employment income, as well as any money you made from your own business and capital gains.
Then, you look for tax credits to reduce the amount of income you have to pay tax on. They can include the education property tax credit, which allows you to claim property tax costs; the primary caregiver tax credit, which allows refunds for Manitobans providing ongoing voluntary care to a family member; or even your tuition fee, under certain circumstances.
Your provincial tax is calculated on whatever income is left after deductions.
What do you need to do before filing taxes?
Erin Tait, tax expert with BDO Canada LLP, says it’s beneficial to talk to your personal tax adviser about major life events that happened over the year. This includes: moving, getting married, having children, incurring medical expenses, graduating or purchasing a home.
“Very often opportunities for tax savings are missed or overlooked when the taxpayer is unaware of the tax deductions and credits available to them,” Tait said.
What documents do you need for your tax deductions?
Your slips: Tait says you’ll need slips like a T4, T4A, T4E, T5 and T5007.
Receipts: You’ll need these to claim children’s fitness or arts credits, political contributions, fertility treatments and green energy equipment.
Certificates: You’ll also need certificates that allow you to claim certain deductions, like for volunteer firefighters.
It’s important to gather and organize your tax slips and records for any tax deductions or credits you’ll be claiming throughout the year. In most cases personal tax returns can be filed electronically, meaning paper copies or records don’t need to be provided to the Canadian Revenue Agency (CRA).
“However, all records related to the tax filing must be retained and available for review, if requested by the CRA,” Tait said.
What are tax credits and deductions you can take advantage of?
The Manitoba government provides several tax credits, which taxpayers should be aware of in order to maximize their tax savings this spring.
Manitoba Family Tax Benefit: This is a non-refundable tax credit available to individuals and families living in Manitoba.
Manitoba Fitness Tax Credit: Fitness claims are eligible for children 16 and under and for young adults aged 16-24. The cost of up to $500 in eligible fitness activities may be claimed per child or young adult.
Children’s Arts and Cultural Activity Tax Credit: This tax credit provides parents of children under 16 with a 10.8 per cent non-refundable income tax credit on up to $500 of eligible expenses per child (worth up to $54 in income tax savings) for children’s participation in eligible non-fitness activities, including artistic, cultural, recreational or developmental activities.
Political Contributions Tax Credit: If you contributed to a political party registered in Manitoba, or to a candidate seeking election to the legislative assembly, you will get a tax credit which is deducted from your provincial or territorial tax payable.
Manitoba Tuition Fee Income Tax Rebate: This allows post-secondary graduates to receive a 60 per cent income tax rebate on their eligible tuition fees, to a maximum benefit of $25,000. The rebate can be claimed over a period of six to 20 years and is given to those who have a degree, diploma, or certificate from a recognized post-secondary institution on or after Jan. 1, 2007 and are working and paying taxes in Manitoba. A five per cent tax credit advance on this rebate is now available prior to graduation, to a maximum of $500 annually and $5,000 in your lifetime.
What are some little-known tax credits?
Primary Caregiver Tax Credit: This tax credit provides a refundable credit of up to $1,400 annually to assist those who act as primary caregivers to individuals who live at home in Manitoba and require care.
Fertility Treatment Tax Credit: This is equal to 40 per cent of eligible fertility treatment fees to a maximum benefit of $8,000.
Volunteer Firefighter and Search and Rescue Tax Credit is available to those who volunteer at least 200 hours in a year.
Green Energy Equipment Tax Credit is available for property owners who install a geothermal heat pump system or a solar thermal energy system during the year.
What are some little-known facts about filing that you should know?
Personal tax returns can be filed electronically or by mail.
If your tax returns are filed late, compound daily interest is charged on any outstanding balances payable beginning May 2. A penalty will also be charged for any returns filed after the deadline that have balances payable. The penalty charged is five per cent of the outstanding taxes payable plus an additional one per cent of the balance owing for each full month the return is late, to a maximum of 12 months.