Readers and friends have raised me over the years about my unbridled enthusiasm for income tax preparation.
I’ll confess some of that excitement was faked, but there’s one thing I love about tax preparation that I think might help you get excited too.
What I like is that tax preparation has come to an end. So many things in our lives keep ending these days, like Groundhog Day. It’s hard to find a project where you can say: “This is done!”
On the other hand, when you sign and send that tax return (yes, I know, you actually hit “submit” on your computer or give your accountant permission to do the same) that tax return is complete. Yes, you will have to wait for your communication of assessment from CRA and they may request more information, but at least your part of the job is now complete.
And our friends at the Canada Revenue Agency made many improvements this year to make filing easier. Today we are going to focus on these.
As a reminder, my last column on February 19 gave you all the information you need to submit a Work from Home issue. If this is relevant to you, make this your starting point.
CRA hired hundreds of additional call center staff this year to “help Canadians through a tax year like no other”. They have extended their hours from 7 a.m. to 8 p.m. East Coast Time five days a week (excluding holidays when most of us find time to work on these things), and they now have a callback service so you won’t be longer must stay long last. They’ll call you back when you’re at the forefront of the line like the system the airlines are using now.
The starting point is www.canada.ca. Hit the Taxes button and you’ll find everything you need.
CRA advocates electronic filing, which 90 percent of taxpayers have used over the past year. This speeds up your evaluation and your refund if you expect one.
Paper filing is still allowed, and anyone who filed on paper last year has now received their tax package in the mail from CRA. However, the agency warns that a paper return can take 10 to 12 weeks to evaluate, which obviously delays the refund.
Some low-income earners with consistent filing patterns have also received letters informing them that they can file in over the phone.
Your tax life becomes a lot easier when you sign up for My Account, which the CRA said about three million people did between March and September. The system works infinitely better than it did a few years ago. You also now have access to Auto-Complete My Return, Express NoA (Review Notification), and email notifications when your enrollment status is updated or you receive emails from CRA.
NETFILE certified software is required to use the auto-fill feature. Then your return will be populated with your personal information and your T-Slips (including COVID benefits), RRSP and pension contribution receipts, tuition fees and most other items. CRA says it will also check your return for completeness before accepting submission. Pretty smart.
In My Account, you can also view the T-Receipts that CRA has in your file to reduce omissions when filling out. A quick check of my own account that morning revealed that I had issued 10 receipts with all of the information available online there. If any are missing, I can call up the information and print it out. Also very smooth.
Make sure you file by April 30th, 2021, especially if you have money to owe. This also applies if you cannot pay the amount owed. There is a penalty for not paying, but a larger penalty for not submitting on time.
What’s special about 2020 is the ability for some people to postpone paying their outstanding amount until April 30, 2022 with no interest charge. However, you still need to submit in good time.
If your net income is $ 75,000 or less and you have received money from one of the government’s special COVID-19 relief programs, you can defer paying your outstanding balance for those 12 months.
Cant wait to hear all of your stories about how much fun you had with your taxes this year. What will you do next weekend when the ice rinks and hiking trails are closed?
Dollars and Sense is intended as an introduction to this topic and should in no way be construed as a substitute for personalized professional advice.
David Christianson, BA, CFP, RFP, TEP and CIM received the FP Canada ™ Fellow (FCFP) award and was repeatedly named one of the 50 Best Financial Advisers in Canada. He is portfolio manager and senior vice president of Christianson Wealth Advisors at National Bank Financial Wealth Management and author of Managing the Bull, A No-Nonsense Guide to Personal Finance.
Personal finance columnist
David has been a practicing financial planner and life coach since 1982. He specializes in helping clients identify and achieve their key goals and then helping them manage all of their financial affairs, including investments.
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