Filing a tax return plays a vital role in helping you save money.
Tax residence in Canada must pay the tax before or on April 30. However, the Canada Revenue Agency (CRA) has made it super easy for the taxpayers in Canada to pay their taxes before the desired date by picking a payment method. If you're filing a tax return for the first time or millionth time in Canada, these seven easy steps will help you.
Remember, you need to calculate and pay the tax before the deadline. Otherwise, the CRA will charge a penalty or fine that can burn a hole in your pocket. Are you Looking for how to file a tax return in Canada without any inconvenience? Follow these seven steps and pay your taxes on time and without hassle.
1. Get Social Insurance Number (SIN) Or Business Number (BN)
For any Canadian taxpayer, it's essential to have one of the following:
● Social Insurance Number (SIN)
● Business Number (BN)
A Social Insurance Number is your tax identity. You will need a SIN in all tax, social benefits, and entitlements. If you do not have a SIN, contact your provincial representative to obtain one.
Businesses and self-employed also need a tax identity; this is your Business Number, a CRA nine digits Business number, followed by RC, followed by four digits. Example: xxx-xxx-xxx RC 0001.
To apply for a social insurance number, you need to have a work permit or a study permit with a clause that you can work on or off-campus. If you aren't eligible for a social insurance number, you can apply for an individual tax return.
2. Collect Necessary Documents
Your next step is to collect all documents required to file for tax return in Canada. Remember, the documents might vary from individual to individual, yet you must have a few standard documents. First, you need to collect the tax receipts; make sure you collect tax receipts from your income sources. Second, if you were employed, you should have received a T4 – Statement of Remuneration (Income) Third, you should have received a T3 – Statement of Trust Income or a T5 – Statement of investment if you have investments.
You can get these forms from any of your employers or financial institutions. Also, it's important to collect all the other required documents you may need to file a tax return. Other documents may be T2202, T4A and other General Tax Forms.
3. Choose The Best Method
Once you've gathered all the required documents, it's time to choose the best method to file your taxes. Generally, there are three main ways to file a tax return - online, mail and in-person. Suppose you want to file your tax return faster with accuracy, choose Nuages Consulting Chartered Professional Accountant for your tax return. We are a Chartered Professional Accountants registered with the CRA to file taxes on your behalf and represent you after filing. Filling your taxes with us will give you peace of mind as we have simplified the processes, your taxes can be filed within as little as 15 minutes (straightforward), and you may receive your refund within a few days.
Contact us today for a stress-free tax filing.
Another method of filling is by mail or using third-party platforms.
If you opt to mail your return, get a paper return from a local tax services office, post office, or download tax forms from the official website of CRA
If you opt to use a third-party platform, those platforms require you to have some tax knowledge as it is system-based. You will be liable for error and omission if you select the wrong options or receive a large refund by mistake.
Additionally, refund processing may take longer, or the CRA may follow up with you regarding your taxes.
Always choose a method that will file your taxes accurately, defend you when it comes to CRA reassessments and provide a detailed report of your taxes; Nuages Consulting does that.
4. Beware Of The Deadline
Remember, you need to file your tax before April 30. The reason is that the financial year of Canada is from January 1 to December 31. And the CRA has made April 30 the final date to submit the taxes. Always collect the required receipts and documents and file your tax return before the deadline. If you file the tax after April 30, the CRA will charge you a 6% penalty, one time and a monthly 1% interest until the amount due is fully paid.
If you want to save money from paying penalties, get everything ready before April 30.
5. Double Check Everything
Double-check every form before filing; by doing so, you will ensure that you don't pay more or less taxes than required by law.
Once filed, the CRA will provide you with a letter of assessment.
The letter of assessment will outline the income and deductions declared and confirm a refund or an amount due to be paid by April 30.
Remember, a refund will be paid in the form of a cheque or direct deposit into your bank account.
6. Check Official Website For Updates
Always visit the CRA website to get yourself updated with the current laws. This will help you to know if they have made any changes. You will also get recent updates and make your tax filing process more manageable.
7. Get Ready To File
Remember, if you are filling for the first time or the tenth time, it's important to keep the above six steps in mind.
If you are unsure about how to file, you can opt for expert help.
We are Chartered Professional Accountants, ready to assist and make your tax filing hassle-free.
Final Words
You can easily file your taxes without paying unnecessary penalties and fines with these seven steps. Remember, tax filing isn't an option anymore; it's mandatory for every Canadian tax residence (you are considered a tax resident if you lived in Canada for 180 days or more).
When you have successfully filed your taxes, make sure to keep all copies of records with you for a minimum of six years.