Filing your taxes – Tax season is upon us, which means it’s time to organize your papers and figure out how to maximize your return when filing your taxes. With tax laws changing as quickly as your professional and personal circumstances, it’s easy to make mistakes that can end up costing you in the end. Here are five pitfalls to watch out for so you can be well on your way to getting money back in your pocket.
1. Procrastinating. It can be all too easy to put off doing your taxes, but give yourself the benefit of time so you don’t end up in a jam. You’re more likely to make mistakes or miss out on maximizing your tax return if you are rushing to get the job done.
2. Forgetting to report all income. T4 slips provided by your employer are your primary resource for determining your income for the year, but they don’t necessarily show all income. If you work in the service industry, your T4 slip won’t include tips, which must be reported on income tax returns. Additionally, if you participate in the shared economy through services like Uber or Airbnb, this income won’t be reported in a T4 slip.
3. Missing credits and deductions you’re entitled to. Many Canadians aren’t aware of all the credits and deductions they’re eligible for, which can mean missing out. Have you had any major life changes this year? If you got married, had a child or bought a new house, these can all impact your tax return.
4. Being unaware of tax changes. Every year there are tax law changes, which can impact your situation. Familiarizing yourself with any new credits or deductions can help you maximize your return.
5. Filing late. Consider this your save-the-date notice. The deadline for filing your 2017 tax return is April 30, 2018, or June 15, 2018 if you’re self-employed — although taxes owing are still due by April 30. Mark the date on your calendar and submit before the tax deadline to avoid late-filing interest and penalties.
If you have questions about changes to tax laws, contact a local tax expert to ensure you’re getting the greatest return possible.