Ah, taxes! It’s one thing to pack all of our receipts and T4’s and head to an accountant, and completely other thing if you tackle doing them yourself. Perhaps it’s the personal finance nerd in me, but I find doing taxes exciting!
Don’t get me wrong, doing your taxes can be a very scary thing, especially if it’s your first time filling them yourself. Most of that fear is most likely rooted in not understanding tax laws. I get it, the code is can make anyone’s head spin, but trust me – it’s a lot less complicated than you think. I’ve been doing my taxes since I was 18, (ok, I went to an accountant twice over the years, but mostly to have them look it over and make sure that I wasn’t missing anything), and I have 3 businesses, rental properties, a freelance income, and investments – imagine how much easier it would be without that stuff.
The most important thing before you prepare your tax return is to make sure that no one is claiming you as dependent on their taxes. More often than not, accountants tell parents to put students on their taxes so parents can get a bigger deduction. You can’t file your own taxes if they have you listed on their returns.
Taking the First Step
The last day that employers had to send out T4 slips was Feb 28th, which means that everyone should have theirs already.
There are 2 ways to doing your taxes: manually by hand or using tax software like UFile. I personally like using tax software as it helps me remember all the things that I can claim, or need to claim for any given year. This could range from a side project fees, to deductions for medical expenses, and travel related to work. Software programs like UFile do all of the math for you so you don’t actually have to bust out the calculator; and they walk you through step-by-step so that you don’t miss anything. The best part is that they help find deductions that you didn’t even know existed. UFile, is also NETFILE certified, which means that you can file directly from the software without having to print or mail anything.
I also spent an hour going through the website to get additional tips.
Whenever possible, max out your TFSA and RRSP contributions. Not only will it help with the amount of money you have to pay for taxes, but it sets up for the future. I can’t stress this enough. The last that you can file your taxes for this year is April 30th, 2014.
Learning to do your own taxes isn’t as scary or complicated as many people make them out to be, especially when you are in your 20?s. By taking the time to do your own taxes, you get a better sense of how your money works and how taxes work. This will help you to make smarter decisions in the years ahead so that you limit your tax liability and keep more of your hard earned money.
If all that didn’t get you excited, then this might. We’re giving away 5 UFile codes so you can get started.
1. Use Rafflecopter above to enter.
2. The UFILE Code giveaway is open only to Canadian residents (excluding Quebec) who are over the age of majority in their province/territory of residence at the time of entry.
3. The contest closes at 11:59 PST on March 30, 2014. The winner will be selected randomly and will be notified by e-mail.
4. Contest open to readers in Canada.
5. There are no prize substitutions and no cash value.
6. No Purchase necessary.