Steps To Take Before You Prepare Your Taxes

It’s February, and you know what that means – tax season is upon us. This article is going to focus on personal income tax, both because that’s what time of year it is, and because preparing business taxes are often a lot more complex. Though the tax deadline in 2020 is April 30th, you can get ready to file right now. The more prepared you are, the faster your taxes will get done, and the more easily you’ll be able to budget for the rest of the year. 

 

Gather Your Personal Information

The simplest thing you can do is write down your Social Insurance Number and those of all your dependents so you have easy access to them when it’s time to prepare and file your taxes. 

 

There are a number of life changes that may affect your taxes. Think back on your year. Did your relationship status change? Did you move, and if so, did you move from one province to another? Did your Canadian citizenship status change? All of these things can change your tax return quite dramatically, so be sure to gather up any relevant documents.

 

Gathering Tax Documents

The most important element of your income tax filing will probably be your T4 and your employer should get your T4 to you by February 29th, 2020. In the meantime, you can gather a number of other documents that may be relevant to your tax returns. This might include tax deductible donation receipts, tips, receipts for payments associated with moving, and more. 

 

There are a number of documents that will be sent to you during tax season outside of your T4s. These can include T2202s for tuition payments, T4As for retirement income, T5s for investment income, and more. As these documents reach you, gather them together so when it comes time to prepare your taxes, they’re easily accessible.

 

You’ll also want to gather your tax documents and return from last year. This can help guide you or anyone helping you prepare your taxes. Actions taken in one tax year are often relevant the next year also. 

 

Making Contributions

Before you file your taxes, you may want to make contributions to certain accounts, like your RRSP. The deadline for RRSP contributions for the 2019 tax year is March 2nd, 2020. RRSP contributions may be used to reduce your gross income, which can reduce your tax burden.

 

Professional Tax Preparation

Before you prepare your return, you may want to look into getting professional assistance to prepare and file your taxes. There are experienced accounting firms in Winnipeg that can help you get the most out of tax season. They can help you find tax benefits you might have been unaware of. They can also offer guidance on how you should contribute to your accounts throughout the year, helping you make the most out of your RRSP opportunities.