Why File Your Taxes?

Tax season is once again upon us. Well, upon some of us. For those who don't file, chartered accountant Denham Patterson has a message for you: you're missing out on free money from the government.

The annual chore is about more than just filing a tax return because the Canada Revenue Agency (CRA) requires it, says Patterson, a tax partner at Bennett Gold LLP. "It's a window to getting government benefits. If you look at the tax return itself, it's called an income tax return and a benefit return; it allows us to access certain transfer payments from the government like the universal childcare benefit, the old-age income supplement," explains Patterson. "Without filing those returns, there's no way for them to know if you're eligible."

Taxes can be relatively straightforward, but global income can complicate matters for export-minded SMEs. Patterson explains that if you earn income in, for instance, the U.S., you're taxed on it by the American government. "When you pay tax there, you get a credit there. If the tax rates are higher or lower, you may just have to pay the differential." The good news: You can deduct any expense against U.S. income that you have to incur in order to earn that income.

Personal finance

RRSPs: "It's one of the most common deductions for middle class employed people, and CRA won't question it if you have the receipt," says Patterson. You have until March 3 to make a contribution for the 2013 tax year. Pro: You can contribute as much as 18% of your precious years earned income (to a maximum of around $20,000). Con: It's a temporary tax break. When you access the money, you will be taxed on that income.

TFSAs: The new favourite, a tax-free savings account offers more flexibility than an RRSP in that you can pull out your money any time you want without tax costs. Con: The contribution limit is much lower, $5,500 per year.

More tax tips for entrepreneurs

Patterson's final piece of advice? "Neatness counts." The seasoned accountant says your best chance at getting the CRA to approve amy tax credits for which you've applied is a neat and properly filled out return. Of course, it doesn't hurt that it makes his job easier, too.