One of the two certainties of life is an annual event that can leave more than a few people feeling stressed. Read on for our tips on how to navigate through this year’s tax season.
Pre-filing – Keys to Minimize Tax Stress
- Keeping a list of documents you expect and need (ie. T4s, RRSP receipts) and then check them off as they arrive.
- Get ahead of the tax game by organizing your year-end slips and receipts right away as they are received.
- Seek professional assistance filing your return if you feel filing your own return is beyond your abilities.
- If you regularly anticipate a refund, plan to spend it wisely. Consider bulking up your savings for example.
Owing Money – How to Deal with your Tax Debt
- If you owe – pay in full on time! Interest and penalties compound daily, so even a manageable tax amount can get out of hand.
- Look at why there is a balance owing and try to correct it going forward. For example: Were more instalment payments needed? Did you withdraw RRSPs? Were you working two jobs with not enough deducted by your employers?
- Don’t stop filing altogether because you think you’ll add to the balance. Failing to file taxes on time can result in other problems, such as a back-log of MSP premiums, not receiving government benefits, etc.
- Don’t ignore the problem. The Canada Revenue Agency is a powerful creditor and has the ability to seize a bank account or your wages without advance notice to you.
If it sounds too good to be true…
Many Canadians regularly get caught up in tax scams not realizing it and then are faced with interest, fines and penalties from Canada Revenue Agency as a result. Educate yourself on fraud and scams – if it sounds too good to be true, it probably is.
There are options for Tax Debt
If you have unmanageable Canada Revenue Agency debt, such as income taxes or GST, both a consumer proposal or bankruptcy can eliminate or reduce these debts – they are also the only methods that can legally force CRA to stop seizing wages or assets. In Canada, a consumer proposal filed by a licensed trustee is the only option that is available to reduce the balance you repay, in full settlement of the debt.
With over 29 years of experience, Sands & Associates is BC’s largest firm of Credit Counsellors, licensed Proposal Administrators and Bankruptcy Trustees focused exclusively on assisting individuals and small businesses achieve their “debt free” goals.