A few years ago, Ali Najaf decided to file his taxes on his own for the first time.
Najaf, an HR professional in Vancouver, used a free service in university for tax filing, and then after graduation began paying a professional to file them. But in 2021, he thought it would be useful to learn to do his taxes on his own.
鈥淚 believe in learning by doing,鈥� said Najaf.聽
But he was surprised at how difficult it was, and ended up missing out on a work-from-home benefit. In 2022, he decided to try again, this time with help from a friend.
Najaf recently got married and knows that might change his tax situation, so this year he's considering hiring a professional. But if he does, he wants to learn as much as he can to build a strong base so that next year he can file on his own again.聽
Najaf said navigating the tax system can be especially difficult if your first language isn't one of the two official languages, and said he鈥檚 struggled to find all the information he needs.聽
His advice to others doing their taxes for the first time is to educate themselves and figure out their options.
鈥淒oing it properly is (more) important than just saving some money,鈥� he said. 聽
Najaf isn鈥檛 the only Canadian juggling whether to file their taxes themselves and risk missing out on benefits, or to pay a professional to do them for a higher price. And if it鈥檚 your first time filing your taxes, the decision may be even more stressful.聽
Regardless of which route you go, you should start early so you can get all your documents together before the filing deadline, said Alim Dhanji, a Certified Financial Planner at Assante Financial Management Ltd.
鈥淚 think the biggest mistake is ... not starting early enough, and not being organized,鈥� he said.聽
Dhanji recommends making sure you鈥檙e signed up for a My CRA account with the sa国际传媒 Revenue Agency, where you鈥檒l get your notice of assessment and other information. It鈥檚 also where you can get your tax information from prior years, which you may need to file.
The documents you need depend on your situation 鈥� if you have a job, you鈥檒l receive a T4 form for your employment income from the company, while students get a slip with information about tuition from the school.聽
If you鈥檙e self-employed, you鈥檒l need much more detailed documentation on your expenses and income.聽
Meanwhile, anyone filing taxes might have to track down other forms for things like loans, scholarships, or other types of income, said Yannick Lemay, a tax specialist at H&R Block.
There are several different ways to file your taxes, said Dhanji. Many people go to an accountant or a firm such as H&R Block, usually for a fee.
If it鈥檚 your first time you may want to go this route, said Lemay, to make sure you don鈥檛 miss anything.
鈥淭here are more than 400 tax credits and deductions,鈥� he said, and often people miss many of these when they file on their own.聽
For example, if you鈥檙e self-employed or work from home, you may also be able to claim some of your home expenses, Dhanji said.聽
But there are plenty of free and low-cost options out there as well. There are often free tax clinics for newcomers, low-income people or students, said Dhanji. The CRA has a web page dedicated to these clinics which includes a tool to help you find one near you or to connect you to a virtual clinic.聽
Online tax filing software like UFile or TurboTax has come a long way, Dhanji added. The software will usually ensure you don鈥檛 miss the most important lines, he said.聽
The cost of filing with online software varies, but can be as low as $20. UFile offers its software for free to students, and if you鈥檇 prefer to get a professional鈥檚 help, some firms have student discounts. H&R Block has its own online filing software, which according to its website is free if you鈥檙e 25 or younger.聽
If you鈥檙e not sure you鈥檝e got a handle on your taxes, it鈥檚 always better to call an expert and ask your questions, even if they feel silly, said Lemay. There are online checklists you can use to ensure you鈥檝e gathered all the right information, he said.聽
The deadline to both file your taxes and pay any income tax you owe is April 30, though the filing deadline for self-employed people is June 15.聽
Though the filing deadline is at the end of April, if you have a Registered Retirement Savings Plan you鈥檒l want to make your contributions before March 1 so that they count during the 2022 tax year, said Lemay.聽
Lemay said it鈥檚 best to meet the deadline, as there are some consequences to being late, particularly if you owe taxes. But if you miss it, you can still file.聽
According to the CRA鈥檚 website, if you file late and have a balance owing, you will be charged a penalty in addition to interest on your balance.聽
If you make a mistake on your filing, it鈥檚 possible the CRA will find it and adjust it for you, said Dhanji. Otherwise, you can file an adjustment to rectify the error.
And if you haven鈥檛 done your taxes for a few years, it鈥檚 likely not too late to make up for lost time, said Dhanji, even though there may be penalties.聽
鈥淯sually it's not the end of the world. You can get caught up, and then it's a big load off your shoulders,鈥� he said.聽
This report by The Canadian Press was first published Feb. 14, 2023.
Rosa Saba, The Canadian Press
