Tax Time: 4 Steps to Stress-Free Filing
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It’s that time of year again—taxes. That may not be what T.S. Eliot had in mind when he penned the line “April is the cruellest month,” but it sure fits. I have never met any non-accountant who enjoyed completing a tax return—although if you qualify for a refund, which most of us do, that at least rewards you for your efforts.
Fortunately, the Canada Revenue Agency (CRA) is going all-out to try to ease the strain. In recent years, it has introduced several features that are designed to make your life easier. Here’s my four-step guide on how to use them to make tax season less stressful.
STEP 1: Set up your account
Step one is to open an online CRA account if you haven’t already done so. You’ll be amazed at how much time it can save when you start completing your return.
It’s easy to do. Go to the CRA website and search for My Account. To register, you’ll need your Social Insurance Number, your postal code, so be sure to have them available. Once all that is entered, create a user name and password, and your account will be created.
Why bother? Because it will make the tax filing process a heck of a lot easier, that’s why. The data from all your reporting slips (T4s, etc.) will automatically be entered into your account, and you can then use the auto-fill feature to have that information posted to your return when you file electronically using an approved form. That means no more laborious typing of rows of numbers. It’s all done for you.
You can also use the My Account feature to check your RRSP deduction room, track your refund, see how much contribution room you have in your TFSA and a lot more. It’s an indispensible tool.
STEP 2: Visit “Get Ready”
Once that’s done, the next step is to check out the CRA’s “get ready” page. You’ll find a short animated video that explains the basics of completing your return (right down to making a cup of tea before you start, presumably to calm your nerves).
There are also links to a series of YouTube videos on filing, including one in which Marc, the host, tells you about all the great stuff you can buy with your refund (even a laptop if you’re lucky). Some of these are useful, some not so much, but they’re worth watching
There is also access to the CRA Twitter account (the agency is big on social media) where you can ask questions and read tax tips. It’s nowhere near as interesting as Donald Trump’s Twitter feed, but it may give you some ideas for saving tax dollars.
The page also contains some tax tips, a guide to free tax preparation clinics for low-income people, a list of tax changes and more.
STEP 3: Download the Tax and Benefit Guide
It is available here and is more user-friendly than ever before. For example, there’s a new feature that highlights information of special interest to retired boomers. Look for details about pension income, tax credits, etc.
Read the warning about scams at the front of the guide. A lot of people have been conned by aggressive phone calls, text messages or letters threatening to garnish wages or worse unless payment is made immediately by credit card. The CRA says it never uses a belligerent tone or language when it contacts taxpayers and never threatens arrest or to send police.
STEP 4: Choose a software program
About 65 per cent of taxpayers file electronically. The government wants to push that to as close to 100 per cent as possible. It’s a win-win for both sides. Electronic processing costs Ottawa a lot less money, and taxpayers get their refunds faster, sometimes in eight days if you use direct deposit.
The CRA has certified a range of software products that are compatible with its Netfile system, some of which are free. Go here for a list of products for desktops, mobile devices, and on-line filing.
Among the free products that my newsletter readers have praised in the past are StudioTax and SimpleTax. They are worth checking out.
Filing your taxes is never going to be anyone’s idea of a fun time. But you have to give Ottawa credit for trying to simplify it as much as possible.
Gordon Pape is the editor and publisher of the Internet Wealth Builder and Income Investor newsletters. Go to his website at www.buildingwealth.ca.
A version of this article appeared in the April 2017 issue with the headline, “Signed, Sealed, Delivered,” p. 24-26.