Tax season is upon us and filing these can be a daunting task if it is your first time. This article will help to arm you with the basics so you know exactly how to go about filing your income tax and benefit return.
What is Income Tax?
Everyone has to pay tax on the income they make, which is then used by the government to fund and support public services such as education, health services, etc. This amount is calculated on the amount of money you make in a year.
Earnings from within Canada as well as outside may be taxable, which includes full-time and part-time work, self-employment income, earnings from rental, investments, and pension.
Certain amounts are not taxed such as gifts, inheritances, educational scholarships, etc.
How Does Income Tax Work?
Income tax is taken off your earnings or pension and paid to the Canada Revenue Agency (CRA) which is a federal body. Filing your taxes can also give you access to tax credits, benefits, and rebates offered by the provincial or federal government. If you are applying for government programs or assistance, it is essential to file your taxes on time.
How Should I File Taxes?
You have to be careful in deciding how you want to go about doing your taxes, and be wary of scammers offering large tax returns. There are four ways to go about doing this, which are approved by the government: electronically using software, on paper, by phone, or through going to a free community volunteer income tax program.
Always ensure your contact and personal information is up to date, whether you are filing them yourself or getting it done by someone else. Any changes in address, banking details, number of children and dependents in your house, marital status should be duly reported as it can affect your tax returns.
Keep in mind that once you file, you should receive a notice of assessment. If you notice any discrepancies, or have a change in the personal information, wait till you receive your notice to change your return.
The deadline for most individuals to file their 2018 tax return and for all individuals to pay any amounts due is April 30, 2019.
For those who are self-employed, or who have a spouse or common-law partner who is self-employed, the deadline to file your tax return is June 15, 2019.
To avoid interest or penalties, make sure you pay any amount you owe by April 30, 2019. After this date, the CRA will charge interest on any amount you owe until your balance is paid.