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Personal Tax Season – Overcome Stress By Being Prepared

By failing to prepare, you are preparing to fail.”

With this sobering advice in mind, we have prepared some tips to help you get organized and avoid unnecessary stress this personal tax season.

TIP #1 – Mark your calendar.
Know your deadline. For individuals, the deadline is April 30, 2018. Those who are sole proprietors have until June 15, 2018 to file. However, regardless of the deadline, taxes owed should be paid to CRA by April 30, 2018.

TIP #2 – Read your personalized tax letter.
Scarrow Yurman & Co. sends out annual personal tax letters to our clients. We recommend thoroughly reading the letter, using it as a template to determine what sort of documents we require to prepare your taxes. Also, please remember:

  • If your child is attending overnight camp, remember to tell us the length of the stay. Also, please remember that children’s arts and fitness credits were discontinued after the 2016 taxation year.
  • It is vital that you disclose all sources of income and ensure that you are providing us information for all required disclosures. The most common disclosure form is a T1135. If you had any foreign assets more than Cdn$100,000 dollars in value, you are required to disclose this. Ask your investment advisor or financial institution for a T1135 report and avoid unnecessary fines.
  • If you were only partially reimbursed for dental and other claims, be sure to provide us a summary from your insurance provider so we can add the unclaimed portion as a medical expense. (Travel insurance can be claimed as a medical expense.)
  • Remember to send us any donation receipts that you forgot to claim in the past 5 years, you may still be able to claim it this year.

TIP #3 – Follow up on missing tax slips or receipts.
T4 and T5 slips should have been received by the second week of March. You should expect to receive T3 slips starting the third week of March. If you haven’t yet received them, contact your employer or financial institution to ensure you receive your slips.

If you made donations in 2017 and have not received your donation slips, please contact the registered charity to get additional copies.

To ensure you don’t miss any medical receipts, individual pharmacies can provide you with a summary of all the prescriptions you paid for – free of charge.

TIP #4 – Keep your receipts in a secure place.
It is vital that everyone keep their receipts for seven years in the event of an audit by CRA. If you’re a sole proprietor, for the purposes of your tax return, we ask that you please keep your receipts in a secure place and only provide us with a summary so we can prepare your return more efficiently which will bring more savings to you.

TIP #5 – Students in a post-secondary institution should file their taxes.
Post-Secondary institutions issue T2202A slips that can be used against current or future taxes. Best of all, these credits are transferrable to parents at a maximum of $5,000! Students may also be eligible for additional credits such as the ON-BEN and GST/HST Credits which could mean more money in their pocket throughout the year.

TIP #6 – Expecting a tax refund? Get your money faster with direct deposit.
The CRA has been offering direct deposit for a few years now. Direct deposit ensures that your refund is directly deposited into your personal bank account. All CRA needs is your Social Insurance Number, the name of your financial institution, branch/transit number and your account number. We would be happy to set this up for you.

TIP #7 – Expecting to owe tax? Develop a payment plan that works for you.
If you expect to be paying taxes on April 30, ensure you have set aside some money to pay off your tax liability. We also encourage all our clients to contact us, so we can help you develop a tax plan that works for you.

Best wishes from Scarrow Yurman & Co. as we prepare to make this personal tax season the best one yet!

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