Business

D Smith: Looming tax deadline complicated by changing tax laws

The tax deadline is April 30. It is our financial responsibility to file a tax return every year on time.

Payment to Canada Revenue Agency of your balance owing for 2010 personal income tax is due April 30, 2011. Interest and penalties may apply to amounts owing for late filing.

Tax slips are sent to taxpayers and it is the responsibility of the tax payer to record all income to CRA.

A T4 is for employment income, T3 for trust distribution and T5 for investment income.

Sometimes tax slips are missed when a tax return is filed.  CRA can impose a penalty on any unreported income in addition to any tax owing and arrears interest.

CRA has an excellent website for you to save as one of your favourites: www.cra-arc.gc.ca.

This website has valuable information and tips on making sure we claim available deductions and tax credits.

The general information section includes the information you need to get started on filing your 2010 tax return; a guide on the tax package to use, and major changes with explanations of tax changes and the line to enter the deduction on.

You can go electronic and set up your own online account with CRA.

Individuals and business have access to the online services 24/7, for access to your account, payment information, and the option to NETFILE.

Some people file their own tax returns. Others need professional help.

It is difficult to be an expert on tax filing when you only do it once a year.

You do not want to miss out on available deductions.  Tax laws change frequently.

You can NETFILE on the CRA website. It is open from Feb. 24 to Sept. 30, for the electronic filing of your 2010 personal income tax and benefit return.

Tax returns filed via NETFILE must first be prepared using one of the 2010 commercial tax preparation software packages, or Web applications certified for NETFILE.

Families should file their tax returns together to benefit from income splitting.

There are many types of income splitting available for couples and families.

You should file your tax return even if you have no tax to pay.

By filing your tax return, you may be eligible for the GST/HST credit, or child tax benefits or senior income supplements.

After you file your annual tax return each year, you will receive a Notice of Assessment.

This is an important confirmation notice from CRA, keep it with your tax papers.

You can authorize CRA to deal with another person (family member or tax practitioner) as your representative for income tax matters.

This authorization can be completed using your own online account, and can be changed in the future.

Over our lifetime, the annual tax bill we pay exceeds what we spend on food, clothing and shelter.

Taxes are the largest lifetime expense. Only pay your fair share of taxes.

Doreen Smith is a Certified Financial Planner with Capri Wealth Management and Manulife Securities Investment Services Inc. The opinions expressed are those of the author and may not necessarily reflect those of Manulife Securities Investment Services Inc.

250-860-7144, ext. 114

dsmith@capri.ca

 

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