Here's Your Tax Checklist

Here's Your Tax Checklist It's time to file your income tax return for 2006. Here are a few tips for keeping your tax bill low and ensuring that everything goes smoothly. -Submit your return on time. The filing deadline is April 30. If you don't file on time, you could be subject to penalties and interest. The penalty for late filing is 5% of taxes owing, plus 1% a month on the unpaid balance, up to 12 months. For those who were charged a late-filing penalty for 2003,2004 or 2005, the penalty for 2006 is higher. Interest on outstanding amounts is charged at the 'prescribed rate', set in each quarter. The annual rate on overdue taxes in the first quarter of 2007 is 9%. -If you're self-employed or are the spouse or common-law partner of someone who has self-employed income, you have until June 15 to file. -If you don't have cash available to pay all outstanding taxes, submit your return on time. You'll avoid penalties, although you'll still be liable for interest on the balance. -Don't mislead the tax collector. Deliberate tax evasion by making false statements or altering records can cost 50% of the tax evaded. In addition, you'll be liable for outstanding taxes, plus interest. You could even be subject to criminal charges. -When completing your return, take advantage of all available credits and deductions. And don't forget to include both the basic personal amount and the amount of your RRSP contribution for 2006. Frequently overlooked items include tuition fees, eligible moving expenses, child-care expenses, charitable donations, the GST credit (for those who are eligible) and the age amount if you are 65 or older at the end of the year. Be sure to claim provincial tax credits where applicable. -Take advantage of tax changes introduced for 2006. These include an enhanced age credit, a tax credit for public transit passes and increased tax breaks for dividends. -Make sure processing of your return goes smoothly by including all required documentation. -If you aren't including receipts because you haven't received them, attach an explanatory note to your return and submit the material later. -One of the most common causes of tax return processing delays is mathematical error. So double-check figures and information - particularly if you complete your return by hand. -If you use commercial software to prepare your income tax return, consider electronic filing. You can use the CRA's NETFILE service to submit your personal income tax return directly to the CRA over the Internet. If your return is simple, you may be able to use TELEFILE, which allows you to file using a touch-tone phone. For more information on preparing your tax return or using NETFILE or TELEFILE, visit the CRA's web site at www.cra-arc.gc.ca If your tax life is complicated consult a tax professional or one of the many excellent taxation books available at your local bookstore.

 

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