For those expecting a tax refund, tax time can be a welcome relief, offering an influx of dollars to help pay bills or pay down debt. Generally, the CRA can process and deliver refunds in approximately ten business days, but many tax services such as H&R block offer ‘instant refunds’, enabling Canadians to walk out the door with their refund in hand. But it’s important to know that getting an ‘instant refund’ through one of these tax return companies can cost you up to 15 percent of your refund, leaving you with less in your pocket. For example, if your tax refund is $500, you will typically pay a $55 fee leaving you with $445.
If you are considering getting an instant refund, be sure to ask about the company’s fee policies and whether the fee includes the cost of filing the return. An instant refund may be worthwhile depending on your cash flow situation, but if you can afford to wait the 10 days, it can be beneficial to wait.
There are a number of cost effective ways to get your tax return filed. The cheapest way to file your tax return is to do it yourself using the General Income Tax and Benefit Package provided by the CRA, or following four easy steps to file your return online for free. But navigating the tax forms can be confusing, and if you are not fully aware of all of the available tax credits, you may end up leaving yourself short and getting a smaller refund than you are owed. If you are thinking of filing your tax return yourself, learn about the available tax credits, deductions and benefits.
Many communities offer free tax clinic services, with chartered accountants from local accounting firms and other volunteers providing their services to low income Canadians for free. BDO accountants across the country provide their services to local tax clinics each year. For low-income Canadians, these clinics can help ensure available tax credits are taken advantage of so Canadians receive their proper refund amounts. If you need a hand to prepare your return, find out if you are eligible for the Community Volunteer Income Tax Program (CVITP) . Click here for a list of free tax clinics in your province.
If you are worried about filing your income tax return because you will owe money instead of getting a refund, BDO can help. Contact us to for a no-obligation, complimentary review of your financial situation and to explore your options for dealing with tax debt.
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