photo credits: Wise Bread
It’s that time of year….
Personal tax season is just around the corner, and the deadline is April 30th, 2019.
We highly suggest getting a head start on your taxes and not waiting until the last minute. So… we’ve gathered some personal tax preparation tips to make this process quick and easy.
Organize Your Financial Records
If you are a self-employed business owner, make sure you don’t accidentally shred important documents. In fact, you are required to retain business financial records for 6 years or longer after the end of the year. Keep all your business records to help you receive tax credits, employment medical benefits, education deductions, and other credits or deductions.
Report any earned foreign income – Line 256
All Canadian residents must report any monies that were earned from a foreign source. Make sure that you can prove the amount of earned foreign income via accounts payable receipts, bank transactions, or other official records. If you reported foreign income on your return that is tax-free in Canada because of a tax treaty, you can claim a deduction for it.
Unused tax credits.
You can reduce the amount of B.C. personal income tax you owe with basic tax credits. However; if the total of these credits is more than the amount you owe, you won’t get a refund of the difference. So does that mean you are able to reduce your tax payables to zero without using all available credits and you can transfer some to your spouse? That’s right! In certain cases, your tax credits can be applied to both you and your spouse. You can also choose to apply your extra tax credits or deductions to a future year. Some examples of that would include home office expense, tuition, university books and charitable donations.
File a personal income return even if you don’t have taxable income for 2018.
You want to claim the working income tax benefit for 2018? In order to be eligible for the Federal GST / HST Credit you need to file a personal income return. For example, if you qualify as a low-income senior you can re-apply for the Guaranteed Income Supplement. Once a person is receiving the GIS, it will be automatically adjusted each year after the income tax return is filed. However, if there is a reduction in your pension or employment income, the CRA may calculate your GIS benefit by estimating your pension + employment income for the current year, instead of using last year’s pension and employment income.
Some other important dates to keep in mind:
- Self-Employment taxes are due June 15, 2019.
- Corporate tax returns dependent on the company’s fiscal year, which is due six months after the company’s fiscal year.
Stay tuned for next month’s blog, as we tackle corporate taxes.