This article will give you tips on preparing for your tax payment by giving you the tax schedule for the year and how to prepare for each deadline.
Key Tax Deadlines
Each tax payment has its deadline and it is always advisable to always put your books in order in preparation for filing. To do this, you must be aware of the various tax schedule for the year. The list below is the tax deadlines over the course of the year for you to prepare your mind towards filing on or before that date.
- 1st of January 2022- This is the first day of every tax year. Your tax payments for 2022 starts to accrue from this day.
- 22nd January 2022 - The E-file service will be closed for maintenance. This will affect the electronic filing of your initial and amended T1 personal income tax and benefit for that period.
- 24th February 2022 - E-filing will open for residents and immigrants for the 2021 tax year.
- 28th February 2022 - The deadline for the issuance of T4s, T4As and T5s to employers and CRA. T4s and T4As are employment or commissions income slips from your employment while T5s are investment income slips. The information in these slips are used to prepare your T1 personal income tax return.
- 1st of March - Deadline for RRSP tax contributions. ordinarily, the Registered Retirement Savings Plan is tax-deferred except when withdrawals are made. Therefore, the tax on your withdrawals for the 2021 tax year must be paid on the first of March.
- 15th March, 15th June, 15th September, 15th December 2022 - These are the deadline dates for instalment payments for 2022. Tax instalments are paid by people who do not have enough tax withheld, are self-employed, have rental or investment income, who have certain pension payments or have income from more than one job.
- 22 April 2022 - This is the deadline to set up pre-authorized debit payments for 2021 to avoid interest charges.
- 30 April 2022 (extended to 2 May because 30 April is Saturday) - This is the filing due date for 2021 tax returns for individuals to pay the balance due, if any, to the CRA.
- 15 June 2022 - This is the filing due date for 2021 tax returns for self-employed in Canada. In the case of the balance owing for 2021, it still has to be paid before 30 April 2022.
- 31 December 2022 - This is the last day of the tax year.
Having an idea of these deadlines will serve as a reminder on when to be needful when it comes to your taxes so you are not caught off guard and penalized by making interest payments.
Tips To Help You Prepare Your Income Tax effectively
As part of preparing to pay your taxes, here are some tips you can apply to ensure you are not overwhelmed when the deadline is approaching:
- Stay Organized - It is important to take your time at every point to make sure your tax documents are in order ahead of the deadline. Find a suitable filing system that helps you keep a record of your income and the accruable tax. It could be digital or paper; make sure it is effective.
- Keep Up with Tax Laws - When it comes to tax laws, laws are regularly amended to keep up with the changing times. Make sure you are conversant with relevant tax laws to avoid getting caught off guard when it is time for filing. For example, if you received COVID-19 benefits from the Canada Revenue Agency (CRA) in 2021, you would receive a T4A slip which must be reported in your 2021 income tax return. Similar to 2020, you can also claim a tax deduction if you worked from home due to COVID-19.
- Choose Your Software or Tax Service carefully - You can prepare your tax returns or you can engage the services of a professional. If you decide to do it yourself, make sure you go for a software that suits your circumstances. There are different tax software that you can choose from ranging from price and services.
- Plan Ahead to Reduce Your Tax rate - Reducing the tax rate is a smart way to manage your tax obligations without breaking the law. To do this, you can take the following steps:
- Lower your gross and taxable income by deferring income to another year
- Take all the allowable distributions by, for example, maximizing your RRSP contributions
- Use all your available tax credits to lower your total tax obligations
Documents/Information You Will Be Needing to File Your Taxes
- Personal information
- Income slips (Employment, Self-employment, Savings and Investment, Retirement, Social benefits and Employment Insurance)
- Expense receipts for credit and deductions
It is important to prepare for your tax payments ahead of the deadline to avoid mistakes and unnecessary stress.