How to prepare for tax season

April is synonymous with many things. Many people get their first glimpse of spring blooms in April, while families of faith look forward to gathering for Passover and Easter. Sports fans may welcome the return of professional baseball in April, while scholastic athletes may associate April with the return of spring sports. Though each of those things tends to be welcomed with open arms, one day in April may not be greeted so warmly.

April 30th marks the official deadline for taxpayers to file their tax returns each year. Taxpayers must file their returns by this day or face penalties. Though the filing deadline may be in mid-April, it’s wise for taxpayers to begin preparing to submit their returns much earlier than that.

Revenue Canada offers the following advice to taxpayers who want to get a head start on their returns, so they make sure they file on time in 2021.

Gather and organize your records. Many people rely on a professional to work on their returns, and April is such professionals’ busiest time of year. As a result, it’s imperative that taxpayers have all their necessary documents ready prior to their appointments. Any delays could force appointments to be rescheduled, and there is no guarantee tax professionals will have any open dates on their calendar as the filing deadline draws closer. Taxpayers will need their T4s from employers, forms from banks and other payers and other income documents and records of virtual currency transactions. It’s also important that people who received unemployment recognize that such income is taxable, so they will need a record of that income, especially if they did not pay taxes when it was received.

Contact your tax professional. 2021 was a complicated year, and that figures to create some unique challenges as people file their 2021 tax returns. So it pays to contact your tax preparation professional with any questions you have well in advance. That’s true for all taxpayers, but especially so for anyone who filed for unemployment, received a CEWS payment or dealt with any other abnormal circumstances in 2021 that could affect their tax returns.

#financialmatters #taxes