Spring weather may still be about two months off for most Canadians, but tax season is upon us.
It’s the time of year when you tell the government what you made last year, how much of it you paid in tax, and hope that you’ll get a little something back.
WATCH: Changes to tax filing for 2017 tax year
Tax season can be stressful, and not only for those expecting a big tax bill. Just getting the paperwork right can be daunting.
To make the whole process a little easier, Global News has a few tips for you:
When’s the deadline?
April 30 – for most Canadians. This is actually a double deadline. It’s the cutoff for sending in your tax return and for paying your taxes. If you file late and owe money to the government, you’ll face both a late-filing penalty and daily interest charges on your outstanding tax balance.
June 15 – that’s the filing deadline if you’re self-employed. But if you owe taxes and want to avoid extra charges, you still need to pay up by April 30, like everyone else.
When’s the earliest I can file?
You’re in luck, eager beaver – the Canada Revenue Agency (CRA) started processing tax returns on Feb. 26 this year.
The No. 1 reason for filing early is that you get your money back faster.
But even if you aren’t expecting a refund, there are good reasons to get your taxes done ASAP. If you face a big tax bill, you can set up a plan to pay it in smaller chunks by April 30. The government won’t apply any charges until the tax payment deadline. Even if you can’t pay off the full balance by then, whatever funds the CRA receives from you by then is less money on which you’ll have to pay interest.
Avoiding filing your taxes at the last minute also gives you more time to review the rules and make sure you do it right. Still, make sure you’ve received all the paperwork you’ll need before setting out to fill up your return.
WATCH: Here are eight things you need to know to get through tax season pain-free.
Do I need to file?
The rule of thumb is you don’t need to file unless you owe taxes. However, there are exceptions. Plus, there are many reasons to do your taxes every year, even if you don’t have to.
If the taxman owes you a return, you’ll need to send in a return to get it. Second, the government uses information from your tax forms to determine if you’re eligible for a number of tax rebates and benefits programs such as the GST/HST tax credit and the Canada child benefit. That’s why you should probably file even if you have little or no income.
What’s new this year?
A few things:
Tax breaks you can no longer claim:
- Education and textbook credits – As Jan. 1, 2017, they are no longer a thing. Students can’t claim these credits anymore but can keep carrying forward unused amounts from past years.
- Children’s credits – Parents used to get a tax credit for expenses incurred by enrolling kids in things like dance, arts and swim classes. That’s now gone, too.
- Public transit tax credit – You used to be able to claim the cost of things like your monthly subway pass on your return. The Liberals, though, axed that in last year’s budget. But since the tax credit officially disappeared on July 1, 2017, you can still write off public transit expenses for travel between Jan. 1 and June 30 of last year.
New and better tax breaks:
- Canada caregiver credit – If you care for an infirm family member, things just got a little easier. The Liberals streamlined three previously existing tax breaks into the Canada caregiver credit.
- Disability tax credit – The government has added nurse practitioners to the list of health professionals who can certify Canadians living with a disability for this tax break.
- Medical expense tax credit – Fertility treatments can cost thousands of dollars and aren’t often covered under provincial health plans. You may be able to claim some of those costs in your tax return this year. Also, the Liberals have made the change retroactive, so if you’ve paid for things like in vitro fertilization during any of the past 10 years, you can refile your taxes and add that in.
New ways to file, pay and view information:
- Pre-filled tax returns – Why does the taxman need to collect tax returns when it already has most of that information? Fair question. In a not-so-distant future, many of us may not need to file taxes at all, according to experts. We’re not quite there yet with the CRA, but we’re getting closer. You can now enroll in an online service that will prefill your returns with information from things like your T4 employment income tax slip. Just watch out for tax information on things like income earned on investments in a joint account. You and your significant other will need to decide who declares what.
- Paper returns in the mail – If you’ve been doing your taxes the old-fashioned way, the CRA is sending you all the forms by mail this year. No need to drag yourself to Canada Post or Service Canada to pick up your tax package.
- Taxes over the phone – If you have an easy peasy tax return, you can do your taxes by phone, by answering a few question through an automated service. The CRA says it sent a mail invitation for this to eligible Canadians in mid-February.
- Pay taxes in person – For obvious reasons, you can’t pay the CRA by dropping an envelope full of cash in the mail. But now you can pay with cash or debit card in person at any Canada Post across the country.
WATCH: Canadians pay on average 42.5 per cent of their income in taxes, report says
What paperwork do I need?
The tax return itself:
- You’ll need a T1 General 2017 form, plus, likely, a variety of forms and schedules that depend on your specific situation. You can download them online.
Tax slips: Which slip depends on how you made your money. Here are some of the most common types:
- If you’re an employee, a T4, Statement of Remuneration Paid form, which shows how much your employer paid you.
- If you’re retired, a T4A, Statement of Pension, Retirement, Annuity and Other Income, which shows you much you earned in retirement payments.
- If you made money from investing or earned interest in a savings account, you’ll need a T5, Statement of Investment Income, which shows items such as dividends, interest from bonds or money you loaned, and much more.
- If you received Employment Insurance (EI), a T4E, Statement of Employment Insurance and Other Benefits.
- If you received worker’s compensation or social assistance, a T5007, Statement of Benefits.
Receipts: You’ll need these to claim credits for things such as out-of-pocket expenses. You may not have to send them in with your return, but make sure to keep them. If the government asks to see them and you can’t show them, you’ll be in trouble.
When will I get my refund?
Within two weeks of filing your return online, according to the CRA. If you haven’t joined the digital age yet, you might have to wait up to eight weeks.
Know what else speeds things up? Signing up for direct deposit, so the government doesn’t have to send you a cheque.
– With a file from Global News online reporter Jesse Ferreras
LISTEN: Erica Alini talks taxes with Tasha Kheiriddin on 640 Toronto