Happy New Year! If you want to get a “jump start” on your financial fitness this year, get busy and use the current cold snap to sort tax receipts and speed up your tax refund.
Electronic filing will help a lot, so changing your game by researching the right tax software for your family can be a smart move, especially because the wait time for any help you might seek from CRA can hold up your game.
According to the CRA website, they expect to process paper returns in four to six weeks, but won’t start to do so until mid-February. On the other hand, tax refunds will be processed within 8 business days if your professional uses EFILING or you NETFILE on your own. Acceptance of transmissions will start on February 10, based on a call to CRA today. Unfortunately their website won’t update until after January 17 – the deadline date for NETFILING 2012 returns.
Also, note that CRA doesn’t want to take your “where’s my refund” phone calls before mid-March, even if you file your return in January. If you file on or before April 15, they recommend you wait four weeks before you call; after April 15, wait six weeks before you call.
So, with these service levels, filing a more accurate tax return therefore counts and that’s why taking time now to make sure you claim all the tax deductions and credits you are entitled is important. I will be dedicating this blog to helping you with that. Today, here are my top six tax filing pre-requisites:
- Diarize tax filing milestones. You can find a list in Knowledge Bureau Report – a free weekly financial news publication from Canada’s national financial educator. For example, most people will need to file tax returns by April 30; June 15 if you are self-employed but unincorporated. There are several new forms requiring your attention if you have foreign income or property, or participate in “reportable transactions”, for the purposes of tax avoidance.
- Get the tax documents together. Plan to do family returns together, so notify all family members to gather their documents, keeping T-slips together as they trickle in over the next several weeks and sorting discretionary amounts – child care, moving expenses, property, investment and business expenses, carrying costs, public transit costs, tuition fees, children’s arts and fitness costs, medical expenses, charitable donations, and so on, immediately.
- Do a 2013 life events checklist. What changed in your personal, financial, and career life in 2013? Was there a birth or death, marriage or divorce, new job or severance package? These life events will likely have tax implications, so that’s the place to start in asking tax questions of your professional advisor or in researching tax news in the forms or your software.
- Print the T1 tax return and schedules from the CRA website. These make great guidelines for sorting receipts. Also find statements for reporting rental income, investment income, business income and new asset purchases or dispositions.
- Find out what’s new in tax. Every year there are numerous changes to tax law. This year, make sure you understand the rules for claiming disability amounts, amounts for infirm dependants you are taking care of, and clawback zones for receiving Employment Insurance, Old Age Security, or refundable tax credits.
- Get Educated. If you want a great classroom experience, join us at the Personal Tax Bootcamps in Winnipeg January 17, Toronto January 20, Calgary January 21, and Vancouver January 22. You can also earn your certificate online with basic, intermediate, and advanced tax courses from Knowledge Bureau or read my new book, Jacks on Tax: Your Do-It-Yourself Guide to Filing Taxes Online.
It’s Your Money. Your Life. Over the past several years, average tax refunds have well exceeded $1600. When you make it your business to reclaim that money sooner, you’re taking the first step to financial fitness in 2014. Putting your tax refund towards debt or savings in a TFSA or RRSP will propel your financial fitness forward. It’s just smart to make tax filing savvy a big part of your self-improvement plans this year.
Evelyn Jacks is president of Knowledge Bureau and author of 51 books on tax and personal wealth management. Her newest book Jacks on Tax: 2014 Edition is now available. She is also the founder and director of the Distinguished Advisor Conference (DAC). The theme of the 2014 three day think tank in Horseshoe Bay, Texas Nov 9-12 will be “Think BIG: Find the Sweet Spots in Wealth Management” Follow Evelyn on Twitter at @EvelynJacks.