Many Canadians think that tax season doesn’t get into full swing until April, but you don’t have to wait! Get a head start and prepare your tax return early this year, especially if you received any COVID-related benefits last year. 2021 could be one of the more confusing tax seasons in recent memory, but if you prepare early, you won’t have any headaches in April!
Check Last Year’s Notice Of Assessment
One way to start getting prepare is by checking 2020’s notice of assessment (NOA) through your CRA account. Take a minute to note any life changes since filing last year, including changes to your legal name, marital status, address, and employer. If you sold your principal residence, you must also report the sale, even if the situation is not taxable.
All this information can impact your tax return, and if you’re filing with an accountant, make sure they know about these changes. The NOA won’t tell them if there has been a change in your marital status or life situation.
Gather All Your Information For Tax Season (And Note What’s Missing)
One of the easiest actions laypeople can take is to compile all their information. See what you can claim if you’ve moved to a home office and collect any receipts related to expenses you can claim. No longer do you have to wait for your T4 to come to you – you can easily access them (even going back several years) through the CRA My Account feature! Having a complete file before handing information over to your accountant is a great way to prepare for tax season.
Canadians often miss out on valuable credits because they’re not careful about collecting and passing on their information. Make sure you have documentation related to credits like medical expenses, disability taxes, the Canadian caregiver credit (CCC), tuition, moving expenses, union dues, and newer ones like the Climate Action Initiative rebate.
Next, organize this information. There’s nothing worse than when a client shows up with a box or case full of papers that the accountant has to weed through!
Track Down Any Missing Documents
Every year, Londoners waste a lot of money by not claiming all of the deductions or tax credits available! If you don’t want to be one of them, spend a little time tracking down the information you notice is missing. Your organization can be so necessary to the final filing, and the money you save on your taxes could be worth it. It’s also not that much work!
Tracking down any missing bills, receipts, tuition documents, charitable contributions, and medical papers can take no more than a couple of calls or emails. Check online accounts, including the CRA My Account website (if you receive employment insurance), and contact any employers, associations, or institutions responsible for sending you what’s missing.
Tax season does not have to be painful for ordinary people across London. By preparing early, you can maximize the credits you receive, avoid late filing penalties, and check one big task off your to-do list!