When tax season approaches, many people in Winnipeg feel a sense of dread. Even though it signals the end of winter and the beginning of spring, it also means a lot of paperwork and crunching of numbers. Most people in Winnipeg are not experts on tax return regulations in Canada; they have more knowledge about the Jets or the best brand of winter tires. When people in this snowy city file an income tax return, many of them turn to professional tax preparation services to help them out.
There is no “one size fits all” procedure for income tax preparation. Whether you’re a regular employee, self-employed, running a small business, or a corporation, you need to file your taxes in a way that’s appropriate to your circumstances. It can be confusing to gather all the relevant documents for your tax return and file them before the deadline. Any amount that’s owed to the Canada Revenue Agency will begin accumulating interest after this date or sooner if tax installment payments are required. For these reasons, it’s important to submit your income tax information on time.
When you meet with a tax preparation specialist, they will need several documents from you to file your income tax. For specific situations, tax requirements are different. To help you figure out what you’ll need this tax season, we’ve broken it down into the various employment and education statuses:
Standard Tax Return
This is the personal income tax return that most people will file. A standard return consists of various schedules and common inputs that include the following:
- Income reporting tax slips such as T4 and other income reporting tax slips such as T5, T4A and T4E
- RRSP contributions
- Expenses for child care and other receipts
- Medical expenses
- Other relevant income and expense items
Student Tax Return
If you are a student, in addition to your standard tax return inputs, include:
- Tuition and education receipts (form T2202)
- If you are transferring your education tax credits to a supporting person, you must complete and sign the back of your form T2202.
Rental Property Tax Return
Do you own a rental property? Your tax return will require additional information, such as:
- The ownership structure
- Rental property revenue
- Capital purchases
Self-Employed Tax Return
Income from self-employment is included on your personal tax return. A sole proprietor is someone who owns an unincorporated business; they receive all the profits and cover all the expenses. If you have sole proprietorship of your business, you should report the following:
- Capital purchases
- Home office expenses
- Motor vehicle expense
Being self-employed involves a lot of paperwork. Compass Accounting can help you complete or review your bookkeeping as part of preparing your income tax return. With us, you’ll find that it’s easy to keep track of your expenses and revenue. This can greatly reduce the stress you experience come tax time.
Final Tax Return on Death
When someone passes away, an executor or administrator must file their final tax return. It dates from January of that year to the day of their passing. Each case is different, and oftentimes, professional help from an accounting firm is useful in these situations. Compass can help executors and administrators complete a final tax return for a deceased person.
Not all Canadians are aware of the deductions that can be counted in their personal income tax return. One example of this, is that now that many Canadians are working from home, they may be eligible to deduct expenses related to their home office, such as a desk or monitor. More deductions are:
- Contributions to an RRSP
- Expenses from a rental property
- Spousal support
- Employment expenses. This includes supplies and equipment for a home office and other claims.
- Costs related to investment income for investments held outside of an RRSP.
Tax credits are another part of income tax filing that a professional can provide valuable advice on. In Canada, there are several credits available, including:
- Tuition credits (a T2202)
- Paid student loan interest.
- Children’s fitness and art tax credits.
- Charity donations
- Disability amounts
- Caregiver expenses
The above lists are not exhaustive, and a meeting with an accounting firm will inform you about all the revenue statements, deductions, and tax credit documents that you need for your income tax return. You may have questions about what the tax return requirements are for your specific circumstance. Each person’s situation is unique; at Compass Accounting, we will be happy to meet with you (online or in-person) to discuss your tax return preparation needs.
How much does it cost to receive these services? The price varies depending on the complexities of the tax return. Another benefit of accounting services is that a professional can help you claim all the tax credits that you are eligible for. When your tax returns are prepared by a professional, you will be made aware of deductions and write-offs that can reduce any amount that you might owe or increase your refund.
In some cases, people who file tax returns incorrectly may receive an audit from the CRA. They require assistance with fixing any errors or cleaning up their files. Compass can help those who find themselves in this position. With our tax preparation services, we can prevent these mistakes from happening in the first place. For these reasons, many Canadians look for professional tax services when filing their income tax.
Compass Accounting offers affordable accounting services for tax preparation and tax planning in Winnipeg. We provide year-round service for all your tax filing needs. To speak with one of our tax professionals, visit our website and fill in your contact information; we’ll get back to you within one business day.