April is Tax Return Month!

In Canada we pay a lot in taxes - direct and indirect taxes. Although late last year the PST (Provinical Sales Tax) was reduced from 7 to 6%, we still pay lot in income taxes. April, is the month for all to file tax returns and in most scenarios if you pay your taxes regularly, you do qualify for a refund.

As with most things in this country, the processes and dealings with the government offices are mostly hassle-free and pretty well structured. The financial year for income earning runs according to the calendar year, however, business and organizations use different periods in a calendar year to define their fiscal year.

The deadline to file your tax returns and pay any taxes that you owe the government is April 30. If the government owes you money, you do not have to stick to the deadline, though if you owe the government and do not pay the taxes by the deadline, you can be charged really high interest and penalty fees for each day that you go beyond the deadline.

In order to file your tax return, you need a T4 slip that is provided by your employer and a T5 from your bank or financial institution if you earn interest over $500.00 in a tax year. The process for filing your tax returns are simple, you can use a lot of the various options available such as an accountant, tax software or simply 'do it yourself' using the Canada Revenue Agency's (CRA)online tax return tool and guides.

For first timers, tax returns are filed in paper forms and they have to be physically sent to the closest CRA office. The refund cheque can take about a month to come your way. Subsequent returns can be filed online and you can chose a direct-deposit to any of your accounts for the refund. This process is really fast and few of my colleagues have told me that they got their refunds in less than a week.

While the simplicity of it all should have people paying their taxes and filing returns on time, however, in reality, we are all procrastinators and wait for the deadline to pass...