How do You do your Taxes?

Gone are the days where I did my taxes with pen and paper. Happily those days are over.

I use TurboTax to do my tax returns and for those of my direct family. Other software solutions work just as well, but I am comfortable with this tool, so I keep using it.

Typically I do my taxes over about a 1.5 month period. I must wait while the various tax receipts and such arrive at my house.

Typically the methodology followed would be something like:

  • Purchase TurboTax, at Costco. This is usually the cheapest place to get it.
  • Update TurboTax. The software does this automatically, but needs to be done. The updates are important.
  • Create this year’s tax returns for my family, based on last year’s TurboTax files. The software manages to bring forward a lot of useful info like personal info.
  • TurboTax allows you to import data from the CRA site. This year, it is more exciting, as I am locked out.
  • Use my last pay stub for most data needed, until my T-4 arrives.
  • Go into Quicken and glean out whatever information I think I can get, and do a rough estimate of what my taxes might be. Inevitably I overestimate how much tax I have paid and I start getting delusions of large tax refunds, but that is soon remedied.
    • TurboTax does have an import from Quicken tool. Every time I use it, it has not gone well, so I eschew this tool.
  • With this estimate I will see if there is a need to buy RRSP’s to lower tax owed, which usually is not the case
  • As each receipt and/or T-4 or such arrives I then type it into TurboTax and watch my estimate become a closer to reality number
  • Over this time I will remember things I have forgotten to input. I will add them with glee seeing my refund number inflate.
  • By the time the first week of March rolls around my return is 95% complete and factual (i.e. not based on estimates). I can then start thinking about E-Filing my return.
  • Finally the decision whether to submit my returns via E-File. This usually happens on a Sunday morning.
    • Sometimes, there are issues E-filing, so keep all receipts and take screen shots.

And Then?

With that, I await to see whether I forgot something (inevitably a receipt will appear near the end of March, which I have forgotten about), or whether I made an incorrect assumption, when the CRA sends me their response to my submission.

Addendum

This is a rewrite of an article from 2010.

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My CRA Error ERR.021

I have spoken about My CRA before, it allows access to your CRA account. The error I received (Error – ERR.021) was shocking. Updates for this can be found here.

I am now locked out from this with the following screen:

CRA Error ERR.021
Lock Out Error ERR.021 for My CRA account

The access I used was using my Banking Access (i.e. my bank card log in credentials). I have not applied for CERB (as background).

I managed to call the CRA, and was told that someone would call me back about the ERR.021 issue. This would allow me to get access to my account. I was attempting to see what my RRSP room was (as background).

Then I received the following email to the email address I have on file with the CRA.

CRA Email Deletion Message

So now, I cannot log into my CRA account, and I cannot receive emails either. I will receive something using Canada Post, explaining what is going on, and how to fix this issue.

The CBC has posted the following:

Christopher Doody, a CRA media relations representative, said in an email it was meant “as a security precaution in the context of ongoing investigative work, and is not due to a cyber security breach of CRA systems.” He said affected users can expect a letter in the mail with instructions on how to unlock their account.

CRA locks online accounts amid investigation, leaving users worried – CBC

Current Status

Still locked out of my CRA account. Conjecture is that my log in credentials were being sold on the Dark Web. (Feb 17th)

The CRA answered my tweet, with the following:

No phone call, and no letter as of yet either. The Dark Web Sale may have been of older data, however, can’t fault CRA for security. I can fault them for slow response. I have a T4 and most of my other tax forms, but I can’t actually check with CRA or submit my taxes yet. (March 1, 2020)

OH BOY! I get to call them, AGAIN!🤦🏻🤦🏽🤦‍♀️

I will have to dedicate a whole day to do this too. Yea! (March 3)

The call was made, I spent 4 minutes going through menus. They were too busy, so they hung up. 🤦🏻🤦🏽🤦‍♀️ (March 4)

Finally, Success!

I called on Monday at 8:05 AM (EST) (March 8), and finally got through after a short (10 minute) wait. Lots of resetting of things, but I now have access back to My CRA account .

You will need to set up:

  • A new 6 digit PIN Number for calls with CRA in the future
  • Have your 2019 return in front of you to answer questions
  • Have all of your direct deposit banking information as well
  • Your cell phone number for Multi-Level Authentication
  • An Email Address for correspondence.

(March 08)

And Now a Knuckleball

Just got the same email as before saying my account is now suspended. Problem is I can still log in using my banking credentials (for now). Also a very quizzical comment added:

If you are unable to use this online option, we ask that you please try again after March 22, 2021 and call the CRA only if the online option doesn’t work for you after this date.

CRA Email of March 13 2021

I have all the information I need, so I am OK, for now. I will check tomorrow, and see if I can log in. Come back and look for an update.

(March 13 2021)

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Moving Expenses for Students

For students, there are a few well known tax credits, however, many forget about moving expenses.

As long as you are going farther than 40 KM from home to go to school, you should be able to claim line 21900 Moving Expenses.

Save up to 50% on life insurance.

Kind of Moving Expenses

Transportation and storage costs?

You should be OK claiming those but remember to keep all receipts.

Travel expenses

Yes, but be careful how you claim your usage. Check the CRA for exactly how to claim these. Remember to keep all receipts for meals, gas, and incidentals.

Expenses while looking for a place

Up to 15 days of expenses if you have to hunt around to find an apartment.

What if I am in CO-OP?

Moving every 4 months or 8 months can get expensive. The documentation states:
For co-operative students moving back after a summer break or a work semester, you can also claim your movingexpenses as long as you meet the previously-statedrequirements.

What if I am graduating?

For those graduating if you are moving out of your University living quarters and are moving to a new city to get a job, that is a moving expense. If your employer reimburses you for it, then you cannot claim it. The 40 KM rule comes into play here as well.

As a former Co-Op student, I ended up moving every 4 months. I became quite adept at making my life fit the trunk of a Mercury Zephyr.

Remember it is important to keep all receipts and proof of distance in case the CRA wants proof of moving.

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Taxes Delayed, Money Lost

This year (2020) is a very odd year in terms of submitting your taxes. Thanks to the COVID19 outbreak, the current official date for submitting your 2019 taxes is: June 1, 2020 (check the link for any updates)(you only have to pay on September 1st though). Just remember Taxes Delayed is Money Lost (to you).

get your taxes done
Tax Time

September 1st, is the date when you must pay your taxes if you owe money. If you are owed a rebate, what are you waiting for? There are so many good reasons to do your taxes now:

  1. If you are owed money, and are unemployed due to the Pandemic, you really could use the tax free money, right?
  2. If your tax return is simple, why not do it now. You know the CRA is busy doing other things as well, but they are pretty quick on returns.
  3. Most of your specific information is on your My CRA account, you can pretty much do it, with that data (if you are missing data)
  4. If you owe money, better to know now what you owe, and then you can plan accordingly. The CRA will send you a response, and you could even appeal if you feel they are wrong.
  5. See (1) again, and re-read a few times if you are not sure.

Do you like loaning the government your money? Why are your Taxes Delayed ?

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My CRA Account

One of the most important things you can have is have a My CRA on-line account with the Tax Folks. When you apply for the Canada Revenue Agency log in you have access to a lot of your financial information. How do you do that?

Straight forward

Go to this web site to start the process: CRA Log In Registration Site . Note you will need a copy of last years Tax return to verify you are who you are. Once you register, you wait, because the CRA will then send via Canada Post your log in credentials.

Make sure you set up all the correct security questions when you set up your log-in. The security questions will help keep your CRA log in safe.

Yes, this is cumbersome, but also very important. This variation on 2 stage verification is important to ensure no scurrilous nasty folk get at your CRA data. Even in troubled times, security is very important.

Once this letter shows up follow the instructions and log in. After logging in once, you can then put that information somewhere very secure, and forget about it. Why? Your Bank access (i.e. sign in partners) for online banking can be used (for most of us) as our log in after that.

Why Get it?

Why is My CRA so good to have? Here are a few things you can get there:

  • Your TFSA limit for this year. This is calculated at the start of the year, so if you have already deposited money into it, you’ll have to take that into consideration.
  • Your RRSP limit for the year. See the TFSA for the same cautions about the data.
  • The Status of your Tax Return or Appeal. I have found this invaluable with my many reviews and such. Typically the CRA will tell you if you have email to deal with from them as well.
  • Emails from the CRA about your return, or appeal. This is the only way the CRA will contact you, and it will tell you to check My CRA, without any link. They won’t ask for iTunes cards either.
  • Usually you can download your Tax data into Turbotax and other Tax Prep software, which makes life infinitely easier. I used that this year, very useful.
  • Employment insurance ei benefits are also listed, if you are unemployed.
  • The Canada recovery benefit crb is also on this page.
  • Lots of other stuff too.

If you are an on-line person, get this access now, it will make your life much simpler.

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