Tax time in Canada
Well, it is that time of year again. Here in Canada, tax time is upon us, and with that brings mixed emotions for all. For lots, it may bring stress as they know they will be owing lots or already do, and it is just a reminder. For some people who make less and pay more in taxes, it is nice to get some back, and today we are going to focus on both groups of people. Today, lets delve into tax time, the most dreaded part of the year.
Here at CCDR we deal with all kinds of different situations, but if I had to say one thing we see very much in common from client-client, is that lots owe back taxes. With owing taxes, this allows the CRA (Canada Revenue Agency) to act as a creditor if they do not receive their money in a timely manner. They can in situations garnish wages, and defer payments to them, like tax refunds or Carbon tax rebates. Not doing your taxes or not paying is NOT AN OPTION. If paying taxes come tax time seems to be a struggle year after year, consider setting up a tax savings account with CRA, and they will hold that money in case you owe during tax time. You can start even by only make $50.00 a month to the account and at the end of the year, you would have $600.00 in the account in case you owe! We understand that sometimes not knowing may be a hinderance, but make sure to make use of this amazing tool that the CRA offers, if tax time always seems to be a struggle.
Now you may not be a part of the group as talked about before this, you may be the opposite with not owing at all, and in fact are getting a refund. It may be fun and exciting getting that money back – whether it is $200 or $2000.00. What matters though however, is how you end up using it, or what you do with it. I know that everybody current living situation is different, but there is plenty of different ways you can use this money to elevate your life financially. Whether you are just sticking in a savings account to add to, or begin, do it! You can also invest it into your future by adding it to a RRSP, TFSA, or your kid’s future with an RESP. Another idea that does not involve saving, is use it for the car repair you’ve been putting off as if you cannot get to work, how will you continue to make the money? There is plenty of ways to elevate your life with your return, but the biggest thing is to make sure it is bettering your life, not just with things that are “wants”.
Today we had a brief look at both groups during tax time; the ones owing and the ones owed. However, there is still what I hope to believe is a small group, the ones who have not filed in previous years. Here at CCDR we have dealt with clients that have not filed their taxes from as far back as 2017, which is crazy! CRA will and has gone back on clients of ours to charge interest on owed amounts, or garnished wages, even froze bank accounts on Canadian citizens until they filed. If there is anything I hope you take from today, it is that you NEED to file your taxes. Not filing your taxes especially if your owing may make you think your saving money, but we promise you that it will not work out in the end. As we discussed earlier you can use the tax saving program CRA offers, you can also be aware that taxes will be due at the end of march every year. If you are self employed or a contractor, be sure to take taxes off your income and set it aside, do not be a part of a negative statistic.
Today, we have delved into many fields related to tax time. If you still have any questions or require assistance, be sure to reach out to CCDR, and we will there to assist however we can.
