5 Tips for Paying Your Taxes

Helpful Tips for Paying All of Your Taxes This Year

Table of Contents

Tax season is approaching, and you may already know that you owe the Canada Revenue Agency some money. At David Sklar & Associates, we offer debt relief and credit counselling services to help you better deal with your finances.

If you’re anxious about achieving your payment goal by the due date, read these 5 helpful tips for paying your taxes and taking care of debts to the CRA:

1: Always File

It’s better to file late than never. For one, skipping the responsibility doesn’t mean that you don’t owe the Canada Revenue Agency, and ignoring it can make addressing your taxes more challenging (and expensive) in the future. It’s better to pull off the bandage now.

For the average year, filing your taxes late results in a late-filing penalty. The late-filing penalty is 5% of your balance owing. That amount increases by 1% for each month past the deadline — this goes up to a maximum of 12 months. And if you’ve already been charged a late-filing penalty in the previous 3 years, that penalty balloons to 10% of your balance owing, plus 2% for each month the return is late for a maximum of 20 months.

So, the number one rule is to always file your taxes — even if you don’t think you can make the payments. That’s a separate goal that you can tackle later.

How to File:

Filing your taxes can be intimidating. Maybe you’ve never done it before. Maybe you’re a freelancer or gig-worker, and you know that filling out your return is going to be more complicated. Whatever the reason, you can still find help so that you don’t have to miss any more deadlines.

Through an Accountant

If you have room in your budget, go to an accountant that specializes in income tax. They will make sure that your return is filed properly and that you won’t forget any tax credits, breaks or benefits. No stone will be left unturned.

Through a Tax Clinic

If you can’t afford an accountant, there are free tax clinics that can help you prepare your return. These tax clinics are available at public libraries and community centres during the spring. So, you can file without breaking your budget.

If you’re at a loss of what to do, don’t be afraid to ask for help. You can do this!

2. Get Organized

Before you start filing, you’re going to need to have all of your documents in order. You will want to have all of your Tax Slips (T-Slips). Your employer should have sent you a T4 by the end of February this year. If you’ve lost or misplaced yours, contact your employer to send you another one. They should have a digital copy.

Learn about the tax credits and benefits that you are eligible for. You could qualify for opportunities like the Canada Workers Benefit, the Climate Action Incentive or the Medical Expense Tax Credit. Do some research ahead of time.

Keep all of your important receipts in one place. Paper receipts should be neatly arranged in an envelope or folder. Digital receipts should be collected in a computer folder. Print them and then add them with your other paper receipts.

Having your papers in order makes it easier to file your taxes, fill in the correct information and make accurate calculations. It is also a good precaution in case you ever get audited. You will have all of the documents that you used to file your return ready for the auditor.

3. Budget for Your Payments

After you’ve filed, you need to start the next step: planning for payments. If you don’t have enough savings to cover your tax payments at the moment, you should put together a thorough budget to use from now until September. You can download a budgeting app on your computer or phone and fill in the information. Or, you can fill out your budget on a digital spreadsheet. You can also find an easy-to-use budget form on our website.

Start by calculating your current income. Then, subtract your fixed costs (rent, mortgage, insurance) and variable costs (groceries, entertainment, gas). See how much is leftover. Is that enough to cover what you owe to the CRA? If not, you need to make some changes to your variable costs.

These are some ideas that could lower your variable costs and boost your budget:

  • Order less takeout/fast food and prepare more meals at home
  • Buy generic groceries instead of name brands
  • Skip rideshare apps in favour of walking, cycling or riding public transportation
  • Cancel subscriptions and memberships that you aren’t using
  • Opt for free or cheap entertainment options (reading library books, streaming movies on a service you already subscribe to)
  • Call service providers to see if they can give you a better deal

There are lots of small ways that you can improve your saving and spending so that you can reach your financial goals.

4. Recognize When You Can’t Pay

Sometimes, building a strong budget isn’t enough. You have a sinking feeling when you think about the September 1st deadline. You know for a fact that you won’t be able to pay off what you owe in time. Recognizing when you’re in over your head is half the battle.

The first thing that you should do is contact the CRA. You could qualify for a different payment arrangement or Taxpayer Relief Provisions — this could mean a payment extension, the removal of interest, the removal of penalties, the lowering of payments, etc. The relief provisions are in place to make payments more manageable for people who are really struggling. You may have to prove that you can’t afford to pay them.

The second thing that you should do is see a licensed insolvency trustee. The professionals at David Sklar & Associates can help you find ways to afford to make your payments to the CRA, even if you’re going to miss the initial deadline. Don’t wait too long to book your consultation. The earlier that you can address this problem, the better.

If you’re a little behind on your payments and you don’t owe a lot, you can sign up for credit counselling services to break any financial habits that are sabotaging your savings goals. These sessions will give you the tools to build a better budget, use your credit responsibly and make smart, savvy decisions with your money. This service won’t be a short-term band-aid for your financial issues. You can draw on these important lessons for the rest of your life.

Now, paying off a large sum or paying off taxes while in debt will be much more challenging and will require more serious intervention. You should consider filing for a consumer proposal. A consumer proposal is a legally binding agreement between a debtor and their creditors (this would include the CRA). The proposal is asking for the total debt amount to lowered and for collection actions to stop so that they can feasibly manage their repayments.

With a consumer proposal, you can eventually clear your debts and avoid filing for personal bankruptcy. However, that debt relief option is still available if your creditors reject the terms of your consumer proposal. Click here to see what your CRA debt options are if you do end up filing for bankruptcy.

Why It’s Important to Repay the CRA:

The biggest problem with dealing with income tax debt isn’t the accruing interest or the growing list of penalties or the knowledge that you will have to repeat the process in a year. The biggest problem that you’ll have as a debtor is the CRA. The CRA has far more authority than your average creditor. Their collection activities can be a lot more aggressive than any cell phone provider, bank or money lender.

Several sections of the tax acts give the CRA the authority to collect owed payments through your bank. If they are tired of waiting for you to send funds, they can send a Third-Party Requirement to Pay letter to your bank. Upon receiving this letter, your bank is legally bound to send the CRA the requested sum of the money directly from your bank accounts. If you don’t have enough in your accounts to cover the balance, then the bank will still be bound to forward any future deposits to the CRA.

Since the CRA is a government agency, they do not have to jump through hoops in order to collect what they’re owed. They can freeze bank accounts, garnish wages and more without resistance from banks and other financial authorities. Making your payments should be a top priority to avoid these severe collection activities.

5. Be Prepared for Next Year

Taxes come up every single year, so don’t leave your taxes until the last minute. Being prepared will lower your chances of collecting late-filing penalties, late payment penalties and interest. You can file, pay your dues and take the weight of that responsibility off of your shoulders.

Start by organizing your receipts and essential documents. Keep digital copies just in case you lose or damage the paper copies. Look up benefits, tax breaks and credits that you are eligible for. These will be updated over the upcoming months.

David Sklar & Associates:

Filing and paying your income taxes can feel like an intimidating and sometimes overwhelming responsibility. It doesn’t have to be. And if this article isn’t enough to push you to accomplish this goal, you can always get a professional to guide you to it, whether it’s an accountant to help you file or a licensed insolvency trustee to help you pay. You don’t have to do it alone.

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt, call us at 1-844-962-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

Share This!

I am very pleased with the experience with your company. Great customer service and very professional. They made me feel like dealing with caring and friendly people. Jackie is a sweet lady. All of them very helpful.
Carolina Marroquin
1708815208
I am very excited for the helpful service I receive from David sklar &Associates Inc ! My experience with coronation she is a professional and skill person! We'll done ✔ thank you very much, Gw
garfield wallace
1708730999
Great and friendly staff. They went out of their way to help me with the process. David Sklar and Associates are more then professionals. Christine sylver helped me with every steps, everytime I asked for more help she was always there for me with a smile. Very professional and patient. I want to thank Christine Sylver for everything she did to help me through this process and by giving me a new start.
ray pat
1708550360
I was so nervous to go and then i met trina beautiful compassionate understanding trina how lucky for me what a professional thank you thank you
Penelope Mather
1708303088
It was easy to get everything started and I am happy that I choose you, thank you.
Marina Granado
1707942981
I came in with a lot of anxietyChristine SylverHernee Templonuevogave me the confidence I needed
George Carvalho
1707837852
A great place to find out the best way to remove your debt. I discussed my problem with a with a fantastic lady who's named Grace. This lady showed me a couple of ways to lower my debt and I chose one. Thanks to Grace one day I will be out of debt, but until then my spending without cause has come to an end.To the staff and especially Grace of David Sklar and Associates thank you.Bob Barnesi will be one day out of debt
Robert Barnes
1707781618
A wonderful experience with a very depressing financial situation.Cori is easy to talk to and understand, with what she is describing.
Verble Daniels
1707699079
The staff at David Sklar are absolutely life changing and phenomenal people to work with. They are a well dedicated team whose personal mission is to truly help you turn your life around. Don’t be afraid to call them. Don’t be afraid to be honest to ask for the help you need. Rest assured no matter your debt load they will assist without judgement and deliver with compassion the best way forward to legally seal your debts and give you a real chance again at life. I highly recommend their services. They changed my life. They will gladly help you too. My personal consultant Trina Powell is an incredible, smart, and extremely supportive ally. But know you’re in good hands no matter who they assign to help you. Change your life today and pick up the phone and call them you’ll only be sorry you waited so long.
Kelly Silke
1707344543
This was an is an excellent experience for me because I am now able to retire comfortable in five years an debt free. Life seems to now begin. I should have done this earlier. But I did not have a company to do a consumer proposal with that I trust. Thank you for saving me.
Carilyn HoseinAdams
1707147259
js_loader
DS david skalr icon

Book your free consultation.

Call 1-844-962-9200 or fill out the form below. We’ll do the rest.

Contact Us