I’m 21 and don’t understand taxes or what to do with them?

[jjp297]

@theoderic What is tedious, filing a tax return?

The basics of a tax return is to report your income and pay applicable taxes and receive government benefits if appropriate.

 

[debbie_s]

@jjp297 Let's be honest, taxes are tedious. For most people, their forms are submitted to the government and it should be much easier to file.

 

[timelesstim]

@debbie_s They're a whole lot more tedious than they should be, that's for sure.

I still manage to fill them fairly quickly. Once you know you just have to calculate your taxable income, tax credits, do the multiplications and subtraction, you can just strategically input the important numbers in a few places and leave almost all of the form blank.

Almost none of the lines are going to be relevant so the form is functionally only a third of a page long.

 

[debbie_s]

@timelesstim A form where you have to actively leave 95% of it blank is pretty much the definition of a tedious process. Like realistically you'd have to read every line of the paper form to determine if it applies to you or not. I'm sure that most people that feel confident in filing their taxes every year have never filed a paper copy of their taxes and rely on software (I include myself in this cohort) to avoid dealing with the nightmare of the actual paper forms.

 

[halceko19]

@debbie_s I've been filing my taxes myself since I started working and while I find them easy to do, they are extraordinarily tedious. My US taxes consist of me filling out the entire form, and then filling out a different form to essentially erase the first form. It's a pain in the ass.

 

[jjp297]

@debbie_s It should be, but they are fairly simple for 90% of people. I take maybe ten minutes to enter al the info even before I retired with T4s, T3, T5, RRSP contribution slips, etc...

 

[debbie_s]

@jjp297 Yeah, American studies have found that return-free filings (i.e. IRS sends you a completed return based on what they have and you accept or amend as required) would basically cover 50% of filers in the States. I'm sure that it would be similar here.

 

[theoderic]

@jjp297 Is income only on paper? Like i don’t make any money on cheques or anything

 

[marketplacewomen]

@theoderic Understand that cheques are simply a way of moving money from one bank account to another. They are functionally identical to handing you cash, sending an eTransfer, or wiring money directly into your account.

Your employer, however, is legally required to withhold certain amounts of your pay and remit it to the government as taxes. And as such they are required to keep records and file forms that tell the government how much they paid you. You get a copy of it as well (this is your T4). This is the official record of your income, and it is up to you to doublecheck that is correct.

If your employer DOESN'T keep track of this and instead just hands you some money with no T4 or pay stubs paperwork... That's called being paid "under the table" and it is illegal. Doesn't matter if it is cheque, cash, or and electronic funds transfer.

"Doing your taxes" is when you submit your T4s and other forms at the end of the year to the government, calculating your taxes, and seeing if your employer sent too much money or not enough. This is your opportunity to correct anything wrong and claim any additional benefits you are entitled to which might make you have to pay less taxes. You settle up any difference when you file (either you get a refund, or you have taxes owing you must pay).

You don't do these math calculations yourself... You either use a computer software like WealthSimple to do it for you, or you hire an accountant to do it for you.

 

[jjp297]

@theoderic In come is money you get.

 

[sophiahiddenlight]

@theoderic It will get better. Remember that your elders started off young and needed to be taught.

 

[rockskipper1]

@theoderic The government enjoys knowing its not getting the shit end of the stick.

 

[genericwhitegirl85]

@theoderic

No, lost track of them a couple years ago

At the moment, we're filing for last year, which is the 2020 tax season. One step at a time, focus on just one year at a time right now.

 

[asmodea]

@theoderic You should file tax returns starting at age 18 because that is how the CRA determines if you qualify for GST/HST credit payments the following year.

If you have never filed before you should file this year. You can use free (donations appreciated) tax software (eg. SimpleTax or StudioTax) and you might be able to netfile your return. (It depends on how much the CRA already knows about you.) If you can't use netfile the software will allow you to print the return to mail to the CRA.

After you receive your Notice of Assessment you should apply for a security code for your CRA account. When you have access to your CRA account you should check to see if the CRA has tax slips for previous years and then file your past tax returns. The CRA only has tuition tax slips for 2019 and 2020 so if you were a student before that you should check your school account for the tuition receipts.