(NC) In a normal year, taxes can be complicated. This year due to the COVID-19 pandemic, filing taxes will be different and potentially more confusing for many of us who experienced a change in income or employment terms, or received government financial support and benefits.
To help you navigate the filing process, here are five essential tax tips for this year.
- Take note of key dates and stay ahead.
Its important to file your taxes on time to avoid any penalties or interruption of benefits. If you owe, youll need to be even more vigilant as the CRA can charge you penalties of five per cent on that amount, plus an additional one per cent for each month you fail to file, for a maximum of 12 months. - Stay organized.
Before you sit down to file or seek help from a tax expert, gather any forms, slips and receipts that may be needed. Keeping your receipts organized and doing so in advance can help make filing your taxes easier. Theres also the option of taking photos of receipts and adding them to an online folder or storing it in your email that you can reference anytime, so you can stay organized and clutter free, suggests Lisa Gittens, senior tax expert at H&R Block. - Dont leave money on the table.
Tax credits can be a big help if youre looking to reduce the amount of taxes owed or to maximize your refund. Do your research or seek help from a tax expert so you can claim all the credits that apply to you, including any new ones that were introduced due to the pandemic. For example, if you had to work from home due to COVID-19, you may be able to claim eligible home office expenses even if you didnt save any receipts. - Take advantage of free tax calculators.
Using a calculator can help simplify the tax process and make it easy to figure out how much tax you may need to pay, or if the CRA owes you, says Gittens. It also helps you navigate any tax implications from changes in your employment circumstances or from benefits received in relation to the pandemic. And if you end up owing, you can start putting money aside to pay that tax bill when the time comes. - Ask for help.
If youre concerned about preparing your own return, ask for a hand. A trained tax expert will always point you in the right direction and answer any questions you may have.
Find more information and a free tax calculator at hrblock.ca.
