As tax season approaches, Canada Revenue Agency (CRA) stress begins to set in. It’s that time of the year when everyone starts scrambling to file their taxes on time, and the thought of potential audits, penalties, and interest charges keeps taxpayers up at night. However, there are steps you can take to reduce your CRA stress and keep your tax filing process as smooth as possible.
Here are Top 5 tips some systems and processes you can keep in mind to handle CRA stress.
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1. Keep Your Records Organized
One of the most important things you can do to reduce your CRA stress is to keep your records organized. This means keeping track of all of your income, expenses, and receipts throughout the year. If you’re a business owner, it’s important to keep your business records separate from your personal records to avoid any confusion.
Keeping your records organized can help you avoid errors on your tax return, and it can make it easier for you to find the information you need if you do get audited.
There are several tools and software available to help you keep your records organized, like Hubdoc or even Dropbox. Some accounting software will allow you to attach receipts to your transactions like QuickBooks and Xero.
2. Know Your Deadlines
Another way to reduce your CRA stress is to know your deadlines. The CRA has strict deadlines for filing your tax return and paying any taxes owing.
Business owners have more deadlines than those that are employed – Issuing Tslips, instalments, corporate tax filing on top of personal tax filing deadlines. Missing these deadlines can result in penalties and interest charges.
Make sure you know the deadlines for your specific situation, as they can vary depending on your income sources and the type of return, you’re filing. You can find this information on the CRA’s website or by consulting with a tax professional.
3. Understand What You Can Claim
Take the time to read up on the different deductions and credits available and consult with a tax professional if you have any questions. You may be surprised at how much you can save on your taxes by claiming all of the deductions and credits you’re entitled to.
Understanding what goes into your business expenses vs personal deductions/credits can also help simplify the tax filing process.
4. Hire a Professional
If you’re feeling overwhelmed by your tax situation, it may be time to hire a professional. A tax professional can help you navigate the complex tax system and ensure that you’re meeting all of your obligations.
There are many different types of tax professionals available, including accountants, tax lawyers, and certified tax preparers. Do your research and choose a professional who has experience in your specific situation.
5. Stay Informed
Finally, one of the best ways to reduce your CRA stress is to stay informed. The tax system is constantly changing, and it’s important to stay up to date on any changes that could affect your tax situation. Self-advocacy when it comes to taxes is vital, you cannot assume your tax preparer will know everything about your situation!
One way to stay informed is by subscribing to our newsletter. Our newsletter provides valuable information on all the CRA red flags and how to avoid them, and it can help you stay on top of any changes to the tax system. You can subscribe to our newsletter here.
In conclusion, handling CRA stress can be difficult, but it’s not impossible. By keeping your records organized, knowing your deadlines, understanding what you can claim, hiring a professional, and staying informed, you can reduce your stress and make tax season a little less daunting. Don’t forget to subscribe to our newsletter to stay up to date on all the latest tax information!