Its early spring in Canada and that means that snows are melting, birds are chirping, flowers and trees are blooming, and oh yes, tax season is once again upon us. Whether you are a small business owner preparing your taxes for yet another year, or an individual looking to file in Canada for the first time, the friendly accounting experts at Genesa CPA are here to help you with your taxes this year. Before you visit our office to have us handle your filing for you, feel free to take a look at this tax preparation guide to help you make certain you are up to date on your taxes in 2020.
2020 Tax Preparation Guide
Small Business Tax Preparation
For small business owners, it is never too early to start preparing your taxes for the upcoming year. By early January, you should start thinking about how you will organize your records and get started on filing for the new year. First, it is always a good idea to organize your records in one central file. Those with extra time can take the opportunity to digitally back up any documents by scanning and saving them on a secure hard drive. You can then categorize your records into specific lists such as tax forms, charitable contributions, medical records, etc. Doing this on a regular basis will make it easy to organize your records when it is time to file your small business taxes.
How to File Your Taxes on Your Own
These days, some handy online tools and software make it really easy to keep track of your records and organize things before filing with the CRA on your own. Thanks to the CRA’s online tools, you can easily file over the internet right from your own home. You should also check out the CRA website before you file in order to ensure you are claiming any benefits that you might be eligible to receive. Some benefits are specific to certain provinces, so make sure to take these factors into account and read all information carefully before filing your claim.
When Can I File My Taxes in 2020?
This year, you can start to file your taxes as early as February 24th, but keep in mind that most of the tax forms you will require when filing is not due to be submitted until March 2nd. If you want to be certain that you are getting your full return, or that all of your information is up to date, and the CRA won’t come looking for additional paperwork, you should at least wait until after March 2nd to file. As long as individuals have their taxes filed by April 30th, they shouldn’t have any issues. Also, remember that self-employed individuals have until June 15th to file their income taxes. Note: doe to the Covid-19 pandemic, the deadline for filing taxes has been extended to September 1st.
What Happens if You Don’t File Your Taxes in Canada?
Failing to file taxes in any year can result in late-filing penalties which will range in severity depending on the amount of tax you owe the CRA. For example, if you owe taxes and you file late this year, you will be hit with an immediate penalty of 5% of the amount you owe, plus an additional 1% for each month your taxes are still owed. If you don’t owe any taxes for this year, you don’t actually have to file, but that will also mean you may miss out on any benefits or credits you would have otherwise qualified for. If you fail to file taxes for an extended period, you may end up having to catch up on your CPP contributions. The best way to be certain that everything is on the up and up is to file as soon as you can.
For more information about filing taxes in 2020, and how Genesa CPA can help make the process go as smoothly as possible for individuals, families and small business owners, be sure to get in touch with us this tax season!