With tax season in Canada rapidly approaching, Vince Iannello offers tips for preparing early.
Preparing to file your 2021 tax return in Canada is a great way to kick off 2022. Chartered accountant Vince Iannello advises a minimum amount of early groundwork can help expedite refunds and lead to less stress in February, March, and April.
Vince Iannello on how to plan for tax season
Essential in tax prep is understanding the local tax filing guidelines. While Canada usually enjoys an April 30 filing deadline, the date is rescheduled when the date falls on a weekend. For 2021 returns, the new deadline is May 2, 2022, per Vince Iannello.
For standard filers, taxes due and returns are both due on this day. For small business owners, taxes need to be paid, but an actual return is not required until June 15.
Advanced tax planning and document preparation is a great strategy even when you plan to file at the deadline, as it provides you with an opportunity to assess any taxes owed in advance. Should your tax burden be unexpected, you have additional time to save or move assets to meet the bill.
When a refund is due, you have the choice to file early and receive your refund as quickly as possible. Whether you spend a refund, invest it or add it to savings, it starts working for you much more quickly.
What is a solid timeline for preparation?
Efile services do not open until February 22, 2022, so your work before then should include gathering and sorting any receipts, bills, and documents you will need to reference when claiming deductions. The income slips necessary for your actual filing may not arrive until after filing opens. If you have a more complex return, various receipts and financial documents required for the return could be delayed through March.
Vince Iannello recommends using payroll portals at work and the financial websites for your investments to locate electronic versions of your required documentation if you want to file as soon as possible. Based on the delivery schedule, these documents can help you file one to two weeks early. This means you could be enjoying a refund by the time the physical copies arrive.
Why should I prepare early?
Early information gathering and organization for your tax filings allows you to identify gaps in your paperwork and address them before there is a filing delay or the need for a late return. Vince Iannello also advises it helps tax filers grasp the amount of work involved in filing solo and determine if it is a project you are ready to tackle or one you would prefer to share with a tax professional.