The CRA may have granted Canadians a tax-filing extension this year, but that's not stopping many from waiting until the very last minute. Have you been putting off your tax filing? Accountant pro, Amir Azami shares his top tips for taking action in this special edition guest post:
Heartbleed Scare Leads to CRA Filing Extension
Thanks to the 'love bug', the CRA has extended its traditional tax filing deadline of April 30th to May 5th. This extension was announced after the CRA found its systems were compromised by the Heartbleed Bug, and personal data of some early bird filers were accessed by hackers.
The good news is that if you haven’t filed, your information was not compromised (score one for the procrastinators!). The bad news is that while it was lucky your information was not affected, you still have to file your taxes. But, don’t panic - I will help you get there. Just follow these simple steps below.
Step 1: Call Up Your College Buddy
Chances are you know someone among your Facebook friends or went to school with an accounting major. I hope you kept in touch with this person and are on speaking terms because they can be your shepherd as you walk down the valley of the shadow of tax! Not lucky enough to know such a person? Proceed to step 2!
Step 2: Determine If You Have to File By The Deadline
First, confirm the following:
- Do you have to file a return?
- Must you do it by the May 5th deadline?
Depending on your economic status during 2013, you may not have to file a return and are off the hook. (Pro tip: If you have determined that you do not have to file, you should still file as you may qualify for various government grants & credits!)
Hint: If you had any sort of income or money earned during 2013, chances are you will have to file by the May 5th deadline.
Still not sure? Check out the CRA's resources on who has to file, and the full filing deadlines date list.
Step 3: Choose Software or Tax Professional
Perhaps the most hotly debated decision when it comes to taxes is whether you should go with off-the-shelf software such as TurboTax, or go see your local accountant.
Here's my take - software tax programs are less expensive, but are somewhat biased. These tax programs are required to meet the CRA’s tax collection policy standard, and thus are focused on capturing your tax payables. The CRA’s tax collection policy is such that the taxman will contact you if you didn’t pay enough taxes... but he won't bother if you've paid too much!
Keeping with this policy, the tax software programs are not designed to meet a similar standard to capture all qualifying credits based on your lifestyle, economic condition, etc. Although tax programs have come a long way in capturing the simple credits and deductions, they are not comparable to a “professional judgement” of a tax accountant.
Having said this, if you have a relatively simple return ( i.e. you are single, a student, and have few income & credit sources), then you can probably get away with using tax software. However, if you have a business, a family, or many sources of income and deductions, it can be best to seek out a pro.
Pro Tip: Don't have an accountant yet? Most accountants don't take new clients this far into tax season. Try software if you're game. If all else fails, seek out your local H&R Block representative.
Step 4: Don't Live in Fear of Filing
As a fellow procrastinator, I have come to realize that most hesitance comes from fear, especially of the unknown. Taxes fall into this category for most of us and thus a natural source of stress and anxiety, which then leads to the vicious cycle of more procrastination, guilt and worry.
But taxes are nothing to be afraid of! Think of it this way - taxes are really a game. There are a set of rules you must play within. Your goal is to pay as little money as possible to the taxman without getting a warning by the referees…. I mean, the CRA auditors. It is up to you whether you want to sub in a pro player to play for you, or go out there alone with your own purchased gear!
About the Author
Started from Biological Sciences…now I'm here! My interest in Finance began in my fourth year as a university student, as I started applying to medical school. I took a fateful class with a professor who owned a pharmacology company - and my interest in finance and business grew rapidly! Despite having invested so much time and money into a career in medicine, I followed my heart. Today, I am a Senior Accountant for an industry-leading company, helping Canadians save and make better financial decisions. I may not be saving lives, but get satisfaction from helping people with their finances - the second most important thing, after their health!
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