It has been observed that many today find it difficult when filing their personal income tax. Some however, do not know the first step they are to take when it comes to the matter of income taxes. Hence, in this article, we are going to highlight the procedures/steps to ensure a successful and smooth filing of your tax return either online or on paper. Most Canadians, now choose the online method because it’s faster and they get their refund sooner, especially if they also signed up for direct deposit.
These are the main steps to follow:
First Step: Documents Collection
Make a thorough compilation of necessary information as well as documents that show your earnings, deductions and possible credit plans you are to claim
To successfully fill out your tax return, then you should make available beforehand all tax information slips which show your actual earnings or income, your original T4 slip is a good example. You should have it collected issued by your employer during the early months of the year (possibly, February)
We have different types more of tax information slips, and these include T4A, T4E, and T4A (OAS) and so on.
A point of note: Self employed individuals do not make use of T4 slips as it is not applicable to them. It should also be noted that T3 slips are issued not later than March 31.
If you plan on using a special tax preparation software, then you can have a good portion of your return automatically filled with necessary information imported from Canada Revenue Agency file.
Second Step: Software Selection
At this stage you are to select the appropriate software that you desire in filling your tax return, you could make use of the general income tax and benefit package for 2017.
Filling your tax return could be made much easier with the NETFILE-certified software product. You can get some of these products without a charge depending on your financial status or individual income.
Third Step: Update your Information
Information as we know it is dynamic; hence it is highly recommended that you ensure continuous update of any major change that may have occurred in your life. This could be marital status, parenting or just relocated to another locality, tell the Canada Revenue Agency everything and as soon as possible so that you can enjoy endless flow of your payment benefits.
Fourth Step: Income Report
This is one of the most delicate portion or part while filing a tax return, as this requires high level of honesty and transparency. It is strongly advised that you report the income amount received from all your sources of income, this should include source of income outside the borders of Canada and within.
Check the back of the slip tagged “information slip” for direction on where to report an amount.
Fifth Step: Possible Claims
At this stage you find out which among the deductions, tax credits as well as expense you are entitled to claim.
Search out vital information regarding the possible claims open to you which includes deductions and tax credits so as to reduce your tax expense or the amount you are to pay as tax. This information can also be found right there on your tax return, a form related to it or a schedule
Sixth Step: Sending of Tax Return
It is at this stage that you send out your properly filled tax return document or file to the appropriate agency i.e. the Canada Revenue Agency.
As a way of reminder, you can make things easier for yourself by using the NETFILE online platform which an electronic means for sending completed tax return directly to the Canada Revenue Agency.
Seventh Step: Documentation
Do not dispose any document related to your filed tax return, keep all intact.
This is the most important step you should take to avoid any form of lamentation later on. You are advised to hold firmly to all your tax documents for a minimum of six years. Receipts of all claims should be kept as well, in case the Canada Revenue ask for them in the future.