By Michelle Statz

BDO Debt Solutions

Filing your Income Tax return

Mar 15, 2022 | 9:52 AM

It is once again that time of year when we must gather all our tax information and receipts and file our annual income tax return with the Canada Revenue Agency (CRA). Anyone who has worked in Canada during the year must file an income tax return.

For some this may be a very straight forward task, however, for others it can be very intimidating. In either case, to follow are some tips and helpful advice that may make the process go more smoothly for you.

1. Make sure you have all of your information before you prepare your return.

You should have an idea of the source of your income (i.e. employment income, pension, RRSP withdrawals, etc) and any investment income and should be on the lookout for receiving those tax slips from the institutions that you deal with. You will want to ensure you have all the slips you were expecting before filing. If income gets missed on your return it can create an issue later with the CRA clawing back any refund you may have received when you should not have.

2. Ensure you are claiming what you are eligible to claim.

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You can check the CRA website or seek advice from a tax professional if you are uncertain whether or not certain expenses can be claimed. For example, you are allowed to claim certain expenses when you are self-employed including your business use of your home. You will want to ensure you have the appropriate receipts, invoices and documentation in terms of claiming those expenses in the event that the CRA were to request that back up information from you. To be safe, you should not be claiming any expenses where you do not have the receipt to prove the expense.

You will also want to ensure you are claiming medical expenses. It can be helpful to obtain printouts from your pharmacies in terms of having that backup information as far as the amounts you are able to claim.

3. You are responsible for the information in your tax return.

Remember that although you may have an accountant assisting you with the preparation of your income tax return, you are responsible for that information. If there is an audit or a reassessment, you will be the one responsible for the result, not your accountant. Although your accountant is there to provide you with advice and direction on your return, you still need to be able to have the appropriate verification of information that is being claimed on that return.

4. Do not delay filing even if you think you owe.

The deadline for filing your personal income tax return is April 30 (but since April 30, 2022 falls on a weekend, your return will be considered filed on time if CRA receives it on or before May 2, 2022 or if it is postmarked on or before May 2, 2022). If you are self-employed you have until June 15. It is important to always file your return on time, regardless of whether or not you owe money. There are penalties for late filing when you owe and you want to avoid those additional penalties. In addition, your return is related to certain benefits such as the Canada Child Benefit and GST credits, and if you do not file, you will not be eligible for those types of benefits.

There is a common misconception that there are no solutions if you owe money to CRA for your personal income tax. You can certainly communicate with CRA to try to develop a payment plan. However, if the amount is too high or it is something you feel you are unable to manage, you can contact a Licensed Insolvency Trustee (LIT) who can review the situation with you and look at all options that may be available. There are legislated options that will include your income tax debt.

Michelle is a Licensed Insolvency Trustee, and a Chartered Insolvency and Restructuring Professional. She is a Vice President with BDO and works out of the Regina office. She has been in the industry since 2001 and believes in the system that allows individuals to find solutions to their financial challenges so that they can take charge of their finances once again.

If you find you are struggling or are overwhelmed by your financial situation, we can help you find the right solution. Call 1 855 BDO DEBT to book a free, no obligation consultation with a BDO debt professional.