Preparing for Tax Time in Canada

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It’s never too early to get your information ready, your files organized, and your financial plan prepared for tax season. Tax time can be a stressful time: make sure you’re ready and aware of the following information in order to make sure you can avoid penalties and receive¬†the most effective and financially beneficial assessment, while keeping your mind at ease. While we’re not professional tax advisors – and it can be a great idea to seek out the advice of someone who is, even if it costs a little extra in your short term budget – we’re here to help your financial health.

Deadlines

Most Canadian income tax and benefit returns for 2016 are due on April 30, 2017. However, as this date falls on Sunday this year, the CRA will consider your return filed on time and your payment made on time if they receive it by midnight on May 1, 2017, or if it is postmarked May 1, 2017.

You can file online as early as February 20, 2017.

Updates

The filing process and the credits available change in important ways from year to year. Whether this is your first year filing or you’re a seasoned CRA navigator, there’s always something new to consider. The CRA website has an exhaustive list¬†of changes, but some of the more notable ones for 2017 include:

  • Changes to the Canada Child Benefit
  • The establishment of a CRA mobile app to manage your return status
  • Changes to income splitting tax credits
  • Reporting guidelines for sale of principal residences.

The Long Term: Savings, RRSP and TFSA

At Progressa, we’re big fans of finding ways to start saving, paying yourself first, and making sure you can build a budget that allows for room to grow toward your future goals without the continuous pressure of debt. Once you’ve paid down and managed your debts effectively, the best thing you can do is plan a gradual savings effort that will grow over time to keep your finances in the black. RRSPs and Tax Free Savings Accounts (TFSA) are two of the best ways to make this happen longer-term once you’ve sorted out your shorter term tax return. Many people wait to make contributions until just before the tax deadline, as it’s the closest thing to the “mile marker” for a personal fiscal year. However, experts advise that (as with any personal financial goal such as debt management) it’s better to contribute to your savings goals incrementally throughout the year.

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