For first-time tax filers in Canada, starting the process for the first time, can be incredibly daunting. From gathering the right documents, to getting to grips with deductions and meeting deadlines, it can all feel a bit much.
However, if you start working with a personal tax accountant well in advance of any looming deadlines, you’ll find it much easier to understand what needs to be done, and how you should go about doing it.
To help you file your taxes for the first time with confidence, check out this simple guide:
Knowing who needs to file a tax return in Canada
If you’re a resident of Canada and you’ve earned income or received government benefits, there’s a strong chance you’ll need to file a tax return. But even if your income was very low or nothing at all, you may still be able to unlock tax credits related to GST/HST, or the Canada Workers Benefit, by submitting a timely tax return.
What first-time tax filers need
To make the process a lot smoother, gather together the following items:
- A valid Social Insurance Number or SIN
- Tax slips like T4s, T5s and T2202s
- Receipts for deductible expenses, such as RRSP or medical contributions
For swifter refunds, set up a direct deposit with your banking information.
Creating a CRA My Account
Enabling you to check the status of your refund, review your Notice of Assessment, and access previous tax slips and contribution limits, a CRA My Account is a useful and secure portal you can register with before filing. In just a few steps, you can create an account and use it to stay on top of your taxes, all year round.
Filing for the first time
Online tax software, such as Wealthsimple Tax and TurboTax are a popular choice for those confident with filing forms, or for those who prefer to work with a professional, an accountant might be the best option to help you file for the first time. If you have multiple sources of income or want to make sure you’re getting the refund you’re owed, this is undoubtedly the wisest choice.
Don’t miss these valuable tax-reducing opportunities
First-time filers may miss these, but they can be highly valuable:
- Tuition amounts can sometimes be carried forward if you’re not in need of them right now
- RRSP contributions can lower your taxable income and help with saving for the long-term
- Student loan interest is easy to miss, but is deductible
- Certain medical expenses such as therapy or dental, may qualify for a tax credit
When are your taxes due?
For the majority of individuals in Canada, returns and taxes owed are due by the 30th April, while for the self-employed, payment is due on the same date, but the return filing date is the 15th June.
If you don’t file on time, you may be issued with a penalty and daily interest charges. Even if you’re not able to pay your tax bill in full by the due date, timely filing avoids penalties for late filing, which can be high.
What should you do if you make a mistake?
Anything from a typo in your income to forgetting to claim a deduction, can lead to you inadvertently filing an incorrect, or incomplete return. However, this is usually fixable either through your CRA My Account, or via a correction filed using the ReFILE service available with NETFILE-certified software.
As all reputable providers of tax services in Langley BC will tell you, ignoring notices from the CRA comes at your peril, and if they ask for clarification of any document you’ve submitted, you should respond promptly if you don’t want to be hit with penalties or delays to refunds.
Make first-time tax filing as a Canadian a stressless experience by working with a local tax advisor. There are plenty of good ones out there who can help you maximize your deductions, file on time, and generally enjoy a headache-free tax season, year-on-year.