Springtime is tax season in Canada, and you can help yourself by filing. If you had a low income in 2022, you may owe little to no taxes. You may even receive a refund for taxes that the government deducted from your 2022 income.
On the other hand, the Canada Revenue Agency (CRA) may calculate that you owe taxes. Paying taxes helps to pay for benefits we enjoy while living in Canada, like healthcare and parks. If you owe taxes, you will pay less interest and penalties by paying sooner, and ignoring taxes will not make you owe less! There is also a program for those who incorrectly reported on a tax return, which we’ll discuss below.
It takes a bit of time to prepare to file taxes. You will need to gather documents from your income or expenses. If you have another person prepare your taxes for you, they will need the documents first. And if you file your own taxes, you will need the documents in case Canada Revenue Agency (CRA) requests to see proofs of what you claim on your return.
Items You Will Need to File Taxes
- Proofs of income (T4 from employer, T4A from CRA My Account, records of other income)
- Proofs for any expenses you can claim for deductions. Certain expenses allow you to lower your tax bill or increase your refund. Try searching the Government of Canada webpage or filtering results to see what tax credits you could be eligible for.
Once you have receipts and proofs of income ready, you can save on filing taxes by using one of the following options:
- Use a free tax clinic, which you can find on the Government of Canada’s website.
- File online with a NETFILE-certified tax software. NETFILE ensures your return is accurate, so there are no errors when you submit to Canada Revenue Agency (CRA).
Make sure your information is correct in your Canada Revenue Agency (CRA) account:
- Your name,
- Marital status,
- Bank account details (if you’re using direct deposit),
- Other personal details.
When you or a tax preparer has filed your taxes, you will find out if you owe money, or if Canada Revenue Agency (CRA) owes you a refund. If you are expecting a refund, it should arrive within 8 business days if you or the tax preparer filed electronically, or 8 weeks if you filed by mail.
Let’s say you gave incorrect information on your tax return, such as reporting less income or claiming for tax credits you are not eligible for. By reporting the error through Canada Revenue Agency (CRA)’s Voluntary Disclosure Program, you may have an easier time than if Canada Revenue Agency (CRA) finds your error. You will still owe the taxes, but Canada Revenue Agency (CRA) may charge you less interest and penalties than if you do not report the error.
With some preparation, you can set up yourself to receive a tax refund or improve your tax situation for other years. Whether you owe money or you’re expecting a refund, learn how to better manage your money with Momentum’s On Demand Money Management Workshops.
Contributed by Ruth-Anne Klassen