February is a good time to start putting together the documents you’ll need to file your income tax return. It’s also a good time to create and maintain a system to collect tax information year-round. You don’t want to miss out on deductions and tax credits you’re entitled to. And you certainly want to avoid paying penalties and interest for failing to report income because you misplaced an information slip.
Below, some tips that may be helpful.
- Create three separate files, online or hard copy, for income, expense, and investments. File all statements, documents, and information slips in the appropriate file right away when you receive them.
- Watch for your T4 employment slips and T5 investment income slips this month.
- Be aware that T3 and T5013 investment income slips don’t have to be issued until the end of March.
- If you receive a tax slip after you filed your return, just refile with the new information by April 30.
- Check your online MyCRA account for a summary of all income information slips issued in your name and social insurance number, and compare the list to the slips you received.
- Ask your pharmacist for a printed summary of all prescription costs incurred in 2024 by you, your spouse, and dependant children under the age of 18.
Speaking of your MyCRA account, if you are planning to make a contribution to your Tax-Free Savings Account (TFSA), be sure to read the warning posted by CRA that your contribution limit shown will not reflect contributions made since January 1 of this year, and will not include contributions made in 2024 until that information is received from your financial institution. You do not want to exceed your limit, as CRA charges a penalty of 1% on the excess for every month it stays in your account.
A little time and effort now can ease the hassle of preparing your income tax returns later—and may even save you some money.
