Where’s my T4?!? I know it’s only mid-February but I’m eager to get started on my taxes so that I have the option to make an RRSP contribution before the deadline. But my employer has yet to issue our T4s and I can’t file my taxes if I’m missing such a key document.
Surprisingly, many Canadians are also champing at the bit to file their taxes this year. According to a recent TurboTax national survey, 80 percent of Canadians do their taxes as soon as they have their paperwork in order and over half (54 percent) of intend to file their taxes in March. Meanwhile, individuals have until May 1st, 2017 to file their 2016 tax return.
Why are Canadians so optimistic about their taxes? Perhaps because two-thirds expect to receive a tax refund this year! More than half of Canadians (55 percent) admit they enjoy organizing their receipts and files in preparation to doing taxes.
If you’re one of those keen tax-filers like me then you need an early-bird checklist to make sure you’ve got all your documents in place before you file.
Tax preparation checklist
- Prior year’s tax return and notice of assessment
- T4s for employment income
- T3s for trust and dividend income
- T5s investment income
- Pension income
- Child care payments
- Universal Child Care Benefit (UCCB) slip for the first half of 2016
- Receipts for fitness and arts activities
- RRSP contributions during the year up to the end of February
- Home office expenses
- Charitable donations
- Public transit passes
- Medical expenses
- Tuition fees
- Moving expenses for which you were not reimbursed
- Interest on loans paid to earn investment income
Tax changes for 2016
Not a tax change per se but if you sold your principal residence in 2016 then CRA wants information on the sale recorded on your tax return.
The Liberals have scrapped the Family Tax Cut, an income splitting tool introduced in by the Conservative federal government in 2014.
Also new this tax season is the Canada Child Benefit, which replaces the previously taxable Universal Child Care Benefit (UCCB).
Finally, tax credits for children’s fitness and children’s arts programs have been reduced to $500 per child for the fitness credit and $250 per child for the arts amount. 2016 also marks the final year for both of these credits.
File your own taxes or hire a professional?
Decades ago if you wanted to enjoy a game of bowling then you needed to understand how to keep score by hand. As bowling alleys modernized with computerized scoring systems the game flourished as new bowlers were introduced that otherwise would not participate.
Tax preparation has undergone a similar transformation over the decades as manual tax forms have been replaced with sophisticated tax software that, when paired with CRA’s auto-fill my return, just gets easier and more accurate every year.
According to the TurboTax survey over half (54 percent) of Canadians plan to do their own taxes this year. The other 46 percent will hire a professional.
For me, starting an online business and incorporating it has complicated my finances enough that I now work with an accountant, but for many years before that I used basic tax preparation software to file my taxes.
The great news for basic tax filers is that they can file taxes for free using an option such as TurboTax Free – a simple solution that covers most tax situations and can be used anywhere.
TurboTax Free Highlights:
- No income caps, covers most tax situations and can instantly import tax information from the Canada Revenue Agency with Auto-Fill My Return.
- Find all the slips you need quickly and easily with Suggested Slips. Tell TurboTax Free a bit about you and they’ll suggest the slips to match.
- Prepare your return on a computer, smartphone or tablet and have the ability to seamlessly start, stop and continue your taxes across devices.
- With Auto-Fill My Return, instantly transfer your tax information such as your T4 and RRSP investment receipts from your CRA My Account directly into your tax return. TurboTax then automatically transfers your data to the proper spots within your return. With just a few clicks, your tax return is filled with the most accurate and up-to-date information available, right from CRA.
- Find the answers you need right in TurboTax Free, or from our community of users and expert-created FAQs on AnswerXChange.
What more do you need?
Final thoughts
Many Canadians like to file their taxes early because they’re expecting a refund. The personal finance nerd in me would rather not get a refund (or owe) at tax time.
I file, or at least prepare my tax return early to give me an opportunity to put some strategies in place before the RRSP contribution deadline and avoid any shocks when it comes to filing my taxes.
