In jumpstarting your career or your business, you want everything to be well-planned and executed. With this, you should brainstorm with a team of experts to make sure all your business and work strategies are on the right track. One of the areas you should talk about with your team is the Canada Revenue Agency (CRA) income tax return.
This part of your business is one of the more complicated ones, especially if it is your first time paying, as you need to track a lot of money data for Canadian tax declaration and deductions. But do not worry! We’ll help you know key details in this article.
What is the Canada Revenue Agency (CRA)?
The CRA is the department in charge of receiving payments, implementing tax rules, and processing your income tax returns and income tax refunds. Because of the vital role of the office, CRA has a well-established website where you can acquire readings and resources about paying taxes. You can also download different forms required for your income tax returns and other tax dues online.
Even before the recent pandemic, CRA already accepted applications and direct deposit payments through mail and online. Just remember that if you live in Quebec, you will not be paying taxes through the CRA but through the Revenu Québec.
CRA Income Tax Must-Know Details
Now that you know where and how to pay your taxes, learn the other Ws of CRA income tax returns.
What are income tax returns?
Income tax returns are the taxes you need to pay based on your personal or company income. The CRA determines how much you will pay.
When should I pay?
The payment deadline for taxes from the previous tax year is April 30 for individuals and companies, June 15 for self-employed workers and spouses/common law partners of Canadian taxpayers, and June 30 for non-residents.
Why do I need to pay?
Payment of income tax is required under the Canada Income Tax Act.
Income Tax Return: CRA Tax Brackets And Rates
To get an idea on taxable income, tax bracket, and the tax rate you need to pay, check the CRA income tax calculator available online. Yet, if you or your company has reliable bookkeeping and accounting tools, your tax dues are also easy to find. Here are some of the accounting software you can use:
- Zoho Books
Trained bookkeepers and accountants can configure the software to compute taxes automatically. Many software also have functions to automatically pay dues, which will be helpful to not miss tax payment deadlines.
Mistakes And Solutions In Income Tax Return Filing
Aside from using bookkeeping and accounting software to avoid mistakes and missing out on tax payments, here are the other common mistakes you should be aware of.
Downplaying the importance of income tax
Have the mindset that taxes are as important as any task in your priority list, and track all taxable personal and company income right away.
Cramming on tax computation
Cramming can cause inaccuracies in details and tax computation, so you will also pay the wrong amount. Skip this hassle by tracking your finances for easy tax computation.
Paying taxes late or not at all
Paying taxes is mandated by law, so not paying on time can get you a late filing penalty. You will also be penalized for not paying at all.
Inaccurate personal information details
Check your personal information or update it for changes at least yearly.
Get Assistance From Unloop!
To ensure that all processes in your business—especially the financials—are running smoothly, seek help and assistance from experts. Unloop can be your partner in making sure your business and personal accounts are on track. Ensuring this makes your tax payment and monitoring faster and smoother.
Aside from having trained bookkeepers and accountants, we also use tools like Quickbooks, Hubdoc, and A2x to assist you in managing your cash flow. Feel free to give us a call; we'd love to discuss our offers with you.