Getting ready for Personal Taxes in Canada
As easy as it sounds, getting ready for personal taxes in Canada is not an easy feat. During the month of December, you have to get ready for tax season that runs from the last Monday of February of every year until April 30th. Getting ready involves a few general knowledge steps that would help you understand how things work out.
Personal taxes in this context means submitting your own personal taxes to the Canada Revenue Agency (CRA) and ensuring that your taxes are done accurately. The Government mandates that you submit your taxes on time so that you don’t burden the system with refunds or tax payable. Follow down below to find out how you can be ready before time to submit your taxes on time.
TAX READINESS STEPS:
In these unprecedented times, it is our responsibility as Immigrants and Citizens of Canada to ensure that we submit our taxes on time. Why? So that the Government has full clarity on what is owed to them or what is owed back to us. Trust me, many a times you are the one who is getting something back as a tax refund. But, this only happens if you had paid taxes on every penny you earned within the previous year.
There are certain necessary steps that need to be taken by a working individual when nearing tax season. Here they are broken down in to simple points:
- Knowing your income sources in a given year
- Saving your pay-stubs for the fiscal year from each income source
- Checking if taxes have been paid on each income or if you owe on a certain income
- Contacting organizations/companies to update your address for T4 delivery
- Saving for taxes if you think you will have taxes owing end of the year
WHO DOES TAXES?
Every individual within Canada over the age of majority has to submit a tax return. You pay taxes on every dime that you have earned within the past year. Tax filing starts last Monday of February and can be submitted using E-File or Paper Submission.
The best and easiest solution for tax submission is through E-File considering my personal experience. The taxes are file instantly and refund or amount owing is defined and advised then and there. Tax calculations are tricky and as tax laws are detailed. They are better done by a professional Public Accountant or you may use the various Net File software available in Canada.
Public Accountants charge a fee for tax submissions and charges vary from individual to individual. The charges also vary if you have multiple T4s to submit. The charges start from CAD 25.00 and can vary drastically from person to person.
In terms of Net File, you can use multiple software to file your taxes. The two that stand out in Canada are as follows:
The tax filing software get annual updates which incorporate changes by CRA to the taxation within a given year. As the software are updated annually, the subscription for these software are paid and subscribed annually to.
MY EXPERIENCE:
When I moved to Canada, seeing an income tax deduction on the income was a bummer. I did know that the income gets tax deduction at source. This helped because you are not on the hook end of the year to pay a large amount in lump sum in taxes owing.
I went to a public accountant to submit my first ever taxes in Canada. Accountant asked for my T4s and any medical expenses out of pocket. Then proceeded to submit taxes for me and my spouse. He did ask if we are filing taxes together. Even if your spouse doesn’t have an income, you still have to submit a CAD0 annual tax return for them.
Submission of taxes is what the Canada Child Benefits is based upon and defines how much a household will get in terms of benefits from the Government. Your annual benefits are dependent on your household’s annual income for the past year.
WHY PAY TAXES:
Taxes paid help the Government in providing resources to you and every individual alike in Canada. Many people say those are my tax dollars at work and that’s true. Funding to public hospitals, the roads being built and maintained, free education in Canada are some of the examples where the tax dollars are invested.
You don’t become a proficient developed nation unless the people in it worry about its prosperity. As an immigrant in Canada, you should abide by all these laws and regulations and you have to uphold these regulations to ensure Canada’s progress. Be a good immigrant to continue becoming an excellent citizen.
“Do your part and guide others in doing theirs.” – FR
GET READY:
As December comes to an end, you should be ready to do your taxes. Don’t wait till end of April to go around asking for your T4s, T5s, and T3s etc. Have all the documents ready in time to submit your taxes at the right time because there are consequences for submitting your taxes late. Like, ceasing benefits and imposition of fines etc. Ensure submission of taxes on time and being wary of consequences entailing non-disclosures.
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Whats T4??