Money & Career

Your essential tax preparation checklist

©iStockphoto.com/Airwasabi Author: Canadian Living Credits: ©iStockphoto.com/Airwasabi

Money & Career

Your essential tax preparation checklist

For many of us, filing taxes is a last-minute thing to do at the end of April -- especially because tax preparation software is so easy to use, and can walk you through your tax return. However, you do still need to get your paperwork in order, and that can take a surprising amount of time. Just a little bit of planning before you sit down to file your taxes can help reduce stress and potentially save you money in the process -- after all, you don't want to find those extra receipts after you've already submitted.

Ready to get organized? Here's a checklist of items you shouldn't forget to include when you file your taxes.

1. Important information for taxes
You will need your Notice of Assessment from the previous year, as well as a copy of last year's tax return for reference and review.

If you plan on e-filing your tax return this year, you will need to retrieve your four-digit NETFILE access code from the information sheet of your T1 personal income tax return package. If you didn't receive a NETFILE access code, or if you misplaced it, you can get one using the online service at netfile.gc.ca, or call 1-800-714-7257.

You will also need to document any changes to your address, phone number, SIN, birthdate, marital status or dependent information.

2. Income slips
These will include all of your T-slips, such as T4 (work, RRSP withdrawals, UIC, OAS, CPP), as well as any other income, such as Canada Savings Bond redemptions, or alimony and child support.

3. Investments and dividends
If you have earned investment or dividend income in excess of $50 during the year that are not held within RRSPs or TFSAs, you should have received a slip with that financial information -- and yes, you have to pay tax on it.

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4. Deductible expenses
Many people end up missing out on potential tax savings by not keeping and recording receipts for deductible expenses. These can include tuition fees, charitable and political donations, RRSP contributions, moving expenses, medical bills and public transit passes.

5. Dependents
You are eligible to claim certain expenses for any dependents, as long as you have the proper documentation. These expenses include, but are not limited to child-care costs, tuition fees, education and textbook credits and costs of fitness, recreation and arts activities for your children.

6. Rental income
If you own rental property, it is in your best interest to keep a detailed record of the amount of rent received for each property, because it must all be declared come tax time. Make sure you also have a record of expenses related to the property, such as mortgage interest, property taxes, insurance costs, repairs and maintenance, utilities and other miscellaneous costs of the property.

7. Self-employed income and expenses
If you are self-employed, you will need to have a record of your business income on hand when you file your taxes. Along with your sales information, you will also need a summary of expenses, such as shared business and personal expenses, as well as home office expenses, if applicable.

Remember that if you are filing your return electronically, it is not necessary to include copies of the tax slips, receipts or supporting documents. However, you must still keep all documentation filed away for six years to support your tax return in case you are selected for a review.

We all want to maximize our tax return this year -- or, at least, minimize what we owe -- so don't wait until the end of April to start gathering information and calculating your expenses. It can be confusing trying to figure out exactly what deductions and tax credits you're eligible for, and creating a filing system for your tax papers throughout the year will ensure that everything you need will be at your fingertips once you're ready to file.

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Your essential tax preparation checklist

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