Taxes are due April 30th, but because it falls on a weekend the CRA has extended the 2017 dead until midnight on May 1st. Even with those extra few hours, the deadline is closer than you think so we have some reminders for you.
Consider Your Contributions
Your 2017 tax returns cover all income, investments, and costs from January 1st to December 31st, 2017. One notable exception is your RRSP or Registered Retirement Savings Plan contribution. The deadline for RRSP contributions is March 1st, 2018.
You are eligible to place 18% of your earned income to a maximum of $26,010 for 2017. These contributions qualify for a deduction on your taxes so it can be a valuable tool when filing your taxes. You can place certain qualified Investments in an RRSP including cash, GICs, mutual funds, equities, and more.
If you are a sole proprietor or freelancer you may want to review the CRA’s guidelines on business income and deductions. There are plenty of opportunities for deductions around business expenses such as supplies and marketing and in some cases, you may even qualify to deduct some maintenance or mortgage interest of your home.
If you want to avoid issues with the CRA, however, we would advise being reasonable with your deductions and keeping good records of your expenses. Deducting 100% of your personal expenses, for instance, is sure to get you flagged by the CRA and without a solid body of receipts and records, they may disavow large portions of your return leaving you with a steep tax bill.
Keep Your Records
When your taxes are successfully filed you can expect a response from the CRA in between four to six weeks. Don’t assume you are done just because you receive a receipt or even a refund. Auditors can review records and issue Notice of Reassessment with a balance owing. up to three years after your filing. And that balance owing will have interest charges dating back to the year the taxes were due initially, which can add up quickly.
Tools for Filing
Taxes may be a little more complicated than when Mackenzie King filed but they are also easier to file than ever. Many individuals are filing online through the CRA’s free online service NETFILE.
If your taxes are more complicated you may want to consider hiring a tax professional or investing in software. There are a number of programs designed to optimize your refund such as TurboTax, TaxTron, or Ufile.