It’s that time of the year again- time to file your tax returns. Had you prepared for the process? Early preparation can make the process of filing tax returns simple and quick. You need to know the documents you’ll need as well as all the information required by the CRA. Perhaps it’s time to come up with a tax filing checklist that will simplify the entire process.
Gather The Necessary Information
Before you begin the tax filing process, make sure you have all the documents ready. For instance, you may want to have the previous year notice of assessment as well as your tax return. You may also need to get your spouse’s or dependents’ information from the previous year tax returns. This not only gives you a picture of where to begin but also allows you to check if you are applying for all the tax credits you are entitled to.
How much income have you generated during the year? You need to gather information and supporting documents for this. Some of the different forms of income that you need to consider when filing your returns include
- Employment income
- Self-employment income
- Income from different investments
- Interest and dividends received through the year
- Rental income
You also need to know the expenses you have incurred during the year. Some of these may qualify for tax deductions. A few expenses to consider include:
- RRSP payments to save for retirement
- Daycare costs
- Medical expenses
- Charitable donations
- Tuition payments for yourself or dependents
- Transit passes especially for seniors
- Home office expenses such as cost of electricity and air conditioning
- Car expenses
Are you a sole proprietorship? You may need additional information when filing your tax returns. Make sure your bookkeeping and accounting records are in order. You need the correct figures of your total sales for the year as well as revenues and expenses.
If you own a rented property, you need to have proper records of how many units were rented during the year and at what cost so that you can have an accurate amount of the rental income. In this case, you can take advantage of various deductions when filing your taxes such as the cost of maintaining the property, repair costs and property taxes.
To summarize, you need the following documents when preparing to file your taxes:
- Previous years tax return and notice of assessment
- Personal information such as date of birth, SIN, marital status, dependents.
- T4s, T3s, T5s where applicable
- Child care payments
- RRSP amounts paid during the year until end of February
- Medical expenses
- Interest on loans paid to earn an investment income
- Charitable donations among others
You may choose to file taxes on your own or get the help of a qualified CPA. Regardless, making sure you have the information above can save you time and ensure you maximize the available tax credits and deductions.
Sohail Afzal, CPA, CMA, MBA
Sohail Afzal, (CPA, CMA, MBA) is the founder & CEO of GTA Accounting Professional Corporation. He is a highly experienced Chartered Professional Accountant and businessman himself and understands the challenges that many businesses face when it comes to cash flow management. As an experienced business consultant & tax advisor, he is helping companies grow by providing the technical, financial, and contractual information necessary for strategic decision-making.