Three Things to Know about Filing Your Taxes

Filing your taxes can be a confusing activity, especially for those filing their own taxes for the first time, those who have started a new business or those new to the Canadian Tax System. Here are three important things you should know.

Pay On Time

If you owe tax to the Federal or Provincial Government, it is crucial to pay it on time as there can be penalties for paying late. The fine is 5% of the balance owing plus an additional 1% for every month you are late. The deadline to both file your income tax return and pay any outstanding amounts is April 30, although there have been some temporary changes to this because of COVID-19. Even if you do not think you can pay the amount of tax you owe, be sure to file anyway to avoid being hit with a late filing penalty in addition to a late payment penalty.

Disclose All Income

When filing your taxes, it is essential that you disclose all income that you received in the year. Any amount of income over $500 for a tax year should be reported and failure to do so can resort in a steep penalty. The amount is 10% of what you failed to report or 50% of the difference between the understated tax (related to the amount that was not reported) and the amount of tax withheld (related to the amount you failed to report). Fortunately, if you have made an honest mistake in reporting your income, you can contact CRA to correct it, and the penalty is often waived.

Claim your Deductions

There are numerous deductions that can be claimed by individuals and even more that can be claimed by businesses. However, it can often be difficult to keep track of them all. That is why having professional assistance can really help you. Making sure you claim all deductions you are entitled to will reduce the amount you owe the government and increase the amount that you get back on your refund.

If you have any additional questions about filing your taxes, please contact Noah Belcher and his team who specialize in investment clients with complex tax profiles. He can help you navigate the tax system, save you money, and avoid any pitfalls.

Noah Belcher is an Investment Advisor with IA Private Wealth, and is a CERTIFIED FINANCIAL PLANNER® professional and a Chartered Investment Manager (CIM®), who help his clients achieve their financial goals and objectives. He offers personalized solutions and stellar customer service to clients with complex tax profiles who require top-notch advice.

If you have any questions about this article or would like to talk to Mr. Belcher about your financial profile, call his office at  (604) 535-3454.

This information has been prepared by Noah Belcher who is an Investment Advisor with IA Private Wealth. Opinions expressed in this article are those of the Investment Advisor only and do not necessarily reflect those of IA Private Wealth.  The information contained herein may not apply to all types of investors.  IA Private Wealth is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.