Starting the New Year Off on the Right Tax Approach
If you have ever run into a tax problem when you ended up falling behind in paying the CRA money that you owed it, then you are well aware of the stress and hassle you went through to get the problem rectified. Chances are you ended up paying penalties or interest or both. The debt just continued to grow until you met your obligations.
We tend to forget bad things easily so when you are making your new year’s resolutions this year make sure that one of them is not to let your tax responsibilities slide.
Nobody likes to have to write a cheque to the CRA along with their tax return, but if one is due then every effort should be made to do it. If the situation is as such that you simply cannot pay the bill at the moment then don’t just ignore it. Contact the tax department to make payment arrangements.
It is also worth taking some extra time to try and determine what circumstances put you in a position where you ended up having to pay taxes anyway. Maybe enough was not deducted at the source, meaning your employer was not withholding the proper amount in respect to your income. Check to see if this is the case and if so then increase your deductions. You won’t notice the little extra being taken off each pay, at least it would be quite as hard of a hit as it is when you have to write a cheque for the total amount all at once.
Take the approach of being pro active with your tax situation for this upcoming year. Don’t wait to do this until after the filing deadline, as by then already a quarter of the new year has passed. You may be missing out on some tax credits that could help to put you in a much better tax situation.
A lot of people like to take the “do it yourself” approach even with their tax filings assuming it is a way of saving a few dollars by not having to pay a tax preparer to do it. Quite often by letting a qualified expert do your taxes for you it can create some tax savings for you over and above the nominal amount it is going to cost you for this expert.