The basics of filing your own taxes

WHO needs to file?

It’s generally expected that you’ll file taxes as soon as you start earning an income beyond the basic personal exemption (income tax-free) amount, but there are exceptions. 

For example, teenagers who earned less than 2022’s basic personal exemption amount of $14,398 may not need to file, but they could be entitled to a return. They can also start building up RRSP contribution room. Unemployed adults may similarly benefit from filing a return, even if they don’t owe taxes. You’ll need to do so in order to access benefits.

You can find out more about whether or not you need to file a return here

WHEN do you have to file?

File your taxes yearly, for the calendar year ending the previous December. Canada’s tax form submission deadline is typically April 30, but since that falls on a Sunday, this year’s deadline for individuals is May 1, 2023. Self-employed people (and their spouses or common-law partners) have until June 15 to file their taxes, but any balance owing is still due on May 1.

Good news – early birds were able to access NETFILE-certified tax software as of February 20 for electronic filing. You’ll find your access code on last year’s Notice of Assessment. Look for an 8-character series of letters and numbers just below your Notice Details.

WHAT do I need?

You’ll need a lot of patience and a good number of things from this list:

  • T4 employment income information
  • Tuition and education receipts
  • Investment information
  • Documentation of any benefits you’ve received (Employment Insurance, Universal Child Care Benefit, Old Age Security, Canada Pension Plan, pensions or annuities, social assistance, workers’ compensation)
  • Receipts for contributions made (RRSPs, charitable donations, political contributions)
  • Receipts for expenses incurred (rental income and expenses, child or spousal support, professional or union dues, medical expenses, transit passes, childcare, adoption expenses, moving expenses, interest on student loans, home office expenses, professional exam fees)
  • Any correspondence from the Canada Revenue Agency (CRA), including Notice of Assessment/Reassessment

WHERE do you file your taxes?

We’ve already covered that you can file your taxes on your own by using the CRA’s NETFILE-certified tax software, which opened for filing on February 20.

You can file on paper by mailing in your tax forms or access a community volunteer clinic. Phone options are also available.

If this sounds overwhelming, a tax accountant can prepare your taxes by using EFILE-certified tax software for electronic filing.

HOW do you file your own taxes?

Start by setting up a My Account through the Canada Revenue Agency. This is a secure, online portal to manage your file conveniently. 

If you’re submitting on paper for the first time, you’ll need to request a package from the Canada Revenue Agency. If you filed your taxes on paper last year, you should have already received a new package by now. If not, you’ll have to request one. 

If you’re uncertain about how to proceed, there’s a series of helpful videos available on the CRA website. It’ll take you about three and a half hours to watch them though, which can make outsourcing your tax file to an experienced tax accountant appealing. 

WHY do you have to file taxes?

Filing your taxes is required. If you don’t file on time, you’ll be charged a late penalty of 5% of your balance owing plus 1% for every month after the due date, until you file. If you’ve filed late before, the penalties could be even higher.

All Canadians will be charged interest on any unpaid balance owing. Compound daily interest will begin accumulating on May 1, 2023 at a prescribed interest rate. It’s important to file your taxes on time, especially if you suspect your taxes have been underwithheld. This means not enough was withheld over the year to cover the taxes you owe, and results in a balance owing.

If you owe taxes and fail to file a return, it’s considered tax evasion and can result in fines or even jail time. 

Anxious about your tax return?

We can help. MMT Chartered Professional Accountants are experienced in filing tax returns quickly and accurately. We’ll save you time and money by making sure you access tax deductions or credits while also minimizing any penalties you pay.

Whether you need assistance with this year’s tax return or have back tax issues to resolve, our certified tax accountants will make your tax preparation easy. Sure, you can file your own taxes, but with MMT’s affordable and efficient tax services, you don’t need to.

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