Fixing finances and filing taxes: easy edition
July 17, 2019 9:44 AM Subscribe
I was sick and destitute for a long time and now my finances are a mess and I need help. I have to file three years of income tax with the CRA, I have over 10 grand in pension funds from an old employer still sitting with them, and I don't understand my new employer's pension plan at all. Who can help me with this?
Snowflakes: Canada. I don't want the "right" or "best" way, I want the easiest way.
I need something easy and stress-free to set up and keep track of. Anything requiring oversight or tracking or education is not going to work. I know it will bother some of you that I don't want to carefully engineer my finances to get me the best return. If you can't let go of that, you should probably move on to another question. Maybe in a few years I'll be in a place in which I can think more strategically and cleverly about money, but now is definitely not that time.
I get frantic and confused when I have to deal with anything money related. I can't seem to get financial concepts straight in my mind. Also I have always been financially unstable due to chronic illness and other factors. Last year I was so poor I was literally stealing food from my neighbor's garbage. I was competing with raccoons for half rotten potatoes. This year my health has been much better and I found a job that pays me enough to feed myself, pay rent, and start slowly working on my debt. I have saved up a little bit of money and I want to use it to get my finances organized, because worrying about it is giving me a lot of stress.
I have to file my income taxes for the past three years. I called the CRA and they're sending me my last notice of assessment and all of my T4s since 2015. Now I need to find someone to file my taxes for me. Who does this? What do I google search for? I don't want to go to HR Block and watch them fill out Turbo Tax for me. I have some things that I want to be handled correctly (self-employment fund claims, student credits etc.)
I also have some money in an ex-employer's pension fund that I need to take out and put into an RRSP or something. Dealing with them is difficult and they won't transfer the cash unless I have the correct amounts (which change frequently) entered on their giant forms. I've tried to do this twice in the past and failed because of life, the forms, etc. I don't want to deal with it, I want to pay for someone to do it for me. Is this the same kind of person who will file my taxes for me?
Thirdly, my new employer has a confusing tiered opt-in pension plan. I don't understand it at all. I've tried to read the literature. HR is out-sourced and when I ask (send in a ticket) for help they send me the same brochure I got when I was onboarding. Is this something I could pay someone to coach me through and tell me what to choose and how to fill in the forms?
I need something easy and stress-free to set up and keep track of. Anything requiring oversight or tracking or education is not going to work. I know it will bother some of you that I don't want to carefully engineer my finances to get me the best return. If you can't let go of that, you should probably move on to another question. Maybe in a few years I'll be in a place in which I can think more strategically and cleverly about money, but now is definitely not that time.
I get frantic and confused when I have to deal with anything money related. I can't seem to get financial concepts straight in my mind. Also I have always been financially unstable due to chronic illness and other factors. Last year I was so poor I was literally stealing food from my neighbor's garbage. I was competing with raccoons for half rotten potatoes. This year my health has been much better and I found a job that pays me enough to feed myself, pay rent, and start slowly working on my debt. I have saved up a little bit of money and I want to use it to get my finances organized, because worrying about it is giving me a lot of stress.
I have to file my income taxes for the past three years. I called the CRA and they're sending me my last notice of assessment and all of my T4s since 2015. Now I need to find someone to file my taxes for me. Who does this? What do I google search for? I don't want to go to HR Block and watch them fill out Turbo Tax for me. I have some things that I want to be handled correctly (self-employment fund claims, student credits etc.)
I also have some money in an ex-employer's pension fund that I need to take out and put into an RRSP or something. Dealing with them is difficult and they won't transfer the cash unless I have the correct amounts (which change frequently) entered on their giant forms. I've tried to do this twice in the past and failed because of life, the forms, etc. I don't want to deal with it, I want to pay for someone to do it for me. Is this the same kind of person who will file my taxes for me?
Thirdly, my new employer has a confusing tiered opt-in pension plan. I don't understand it at all. I've tried to read the literature. HR is out-sourced and when I ask (send in a ticket) for help they send me the same brochure I got when I was onboarding. Is this something I could pay someone to coach me through and tell me what to choose and how to fill in the forms?
Best answer: Okay. Step one is file your taxes as soon as possible, because you will eligible for lots of tax credits and benefits since you were at such a low income level (HST/GST rebate, for example).
There are two easy ways to do this. One, is to go on Google and search for a CPA who does personal income tax in your city. (search: CPA personal tax your city name) You can go to them with your T4s and anything else you have (for your student credits you should have a T4A, if you had an investment you may have a T5 slip). It will be more expensive and will require calling them to set up an appointment but they will do all three years and will optimize your return.
If you don't like phone calls and setting appointments, then the other easy way to do this is to use SimpleTax. Set up an account and then follow the step by step instructions to add in your financial information. You can choose to make a donation at the end, but otherwise it is free. You choose which sections to include (so self-employment, student credits etc). You have the option to print your tax return and send it in, or to upload it to CRA, although this may be limited depending on the year.
Given your requirements, I would go with the first option, to ensure everything is captured correctly. I think it's the more stress-free option. Don't go to H&R block, go to a certified professional accountant. The Big 4 (Ernst & Young, Deloitte, KPMG, PWC) plus BDO and Grant Thornton will do an excellent job, but they will cost the most money. You will be better off with a small firm.
Trying to pull money out of the pension fund and put it in cash, then into an RRSP may be tricky. What I've done in the past is to set up an RRSP account, then do a fund transfer. The new place deals directly with the bank/pension holder to transfer the funds, so they're responsible for identifying the value. The person who files your taxes for you, if you go with a CPA, can advise you if an RRSP or other vehicle like a TFSA is a good idea for you. You would still need to set up the accounts though.
I don't know if there is anyone you can pay to coach you through the opt-in pension plan (perhaps a fee based financial advisor, but good ones are hard to find). If you like, you can direct message me the brochure and the questions you have and I'd be happy to help if I can.
Your RRSP's will only apply to this upcoming year's taxes, so there's no rush to do them before you do your back taxes.
I hope this helps!! Good job on trying to clear up your finances and if you have any other questions, please ask and I will try to clarify!
posted by valoius at 10:50 AM on July 17, 2019 [3 favorites]
There are two easy ways to do this. One, is to go on Google and search for a CPA who does personal income tax in your city. (search: CPA personal tax your city name) You can go to them with your T4s and anything else you have (for your student credits you should have a T4A, if you had an investment you may have a T5 slip). It will be more expensive and will require calling them to set up an appointment but they will do all three years and will optimize your return.
If you don't like phone calls and setting appointments, then the other easy way to do this is to use SimpleTax. Set up an account and then follow the step by step instructions to add in your financial information. You can choose to make a donation at the end, but otherwise it is free. You choose which sections to include (so self-employment, student credits etc). You have the option to print your tax return and send it in, or to upload it to CRA, although this may be limited depending on the year.
Given your requirements, I would go with the first option, to ensure everything is captured correctly. I think it's the more stress-free option. Don't go to H&R block, go to a certified professional accountant. The Big 4 (Ernst & Young, Deloitte, KPMG, PWC) plus BDO and Grant Thornton will do an excellent job, but they will cost the most money. You will be better off with a small firm.
Trying to pull money out of the pension fund and put it in cash, then into an RRSP may be tricky. What I've done in the past is to set up an RRSP account, then do a fund transfer. The new place deals directly with the bank/pension holder to transfer the funds, so they're responsible for identifying the value. The person who files your taxes for you, if you go with a CPA, can advise you if an RRSP or other vehicle like a TFSA is a good idea for you. You would still need to set up the accounts though.
I don't know if there is anyone you can pay to coach you through the opt-in pension plan (perhaps a fee based financial advisor, but good ones are hard to find). If you like, you can direct message me the brochure and the questions you have and I'd be happy to help if I can.
Your RRSP's will only apply to this upcoming year's taxes, so there's no rush to do them before you do your back taxes.
I hope this helps!! Good job on trying to clear up your finances and if you have any other questions, please ask and I will try to clarify!
posted by valoius at 10:50 AM on July 17, 2019 [3 favorites]
OP, if you say where you are in Canada, MeFites may even be able to make recommendations for small firm CPAs they trust.
posted by The Wrong Kind of Cheese at 1:23 PM on July 17, 2019 [2 favorites]
posted by The Wrong Kind of Cheese at 1:23 PM on July 17, 2019 [2 favorites]
I agree with the recommendation of SimpleTax. It is VERY, VERY easy to use and uses plain language. The old pension plan is not going anywhere so I would drop that as a priority and deal with that when you have time. For the current pension plan, do you have co-workers you trust to ask?
posted by saucysault at 3:56 PM on July 17, 2019 [2 favorites]
posted by saucysault at 3:56 PM on July 17, 2019 [2 favorites]
1. SimpleTax is awesome, the other folks in my family use it every year ( I can't, my taxes are too weird).
2. New employer pension plan: is there an option in the brochure that describes a fund that's 60% equities (stocks) and 40% bonds (fixed income)? if so, pick that one. They might describe it as an "average" or "middle of the road" option - not overly aggressive, not overly conservative. A 60/40 mix has historically been a solid gainer, so you're unlikely to go wrong with that.
3. Ex-employer RRSP account: maybe consider going down to your bank and opening an RRSP account with them, and telling them about your thing with your ex-employer, and asking them to get it transferred over into your new account. If you have some paperwork with the ex-employer account information on it, they'll be able to set up the transfer. You just need to have an RRSP account of your own to transfer the ex-employer RRSP funds into, so you don't trigger a tax event. I've done this and it's not difficult, just kinda paperwork-y and it takes a while but doesn't require any attention from you while it's happening. When it's done, you'll have to decide how to invest the money but that can wait until then, don't worry about it right now.
It's awesome that you're in a better place and feel up to taking this all on! You can eat that elephant: just take one bite at a time. You'll do great :)
posted by Mary Ellen Carter at 6:56 PM on July 17, 2019 [1 favorite]
2. New employer pension plan: is there an option in the brochure that describes a fund that's 60% equities (stocks) and 40% bonds (fixed income)? if so, pick that one. They might describe it as an "average" or "middle of the road" option - not overly aggressive, not overly conservative. A 60/40 mix has historically been a solid gainer, so you're unlikely to go wrong with that.
3. Ex-employer RRSP account: maybe consider going down to your bank and opening an RRSP account with them, and telling them about your thing with your ex-employer, and asking them to get it transferred over into your new account. If you have some paperwork with the ex-employer account information on it, they'll be able to set up the transfer. You just need to have an RRSP account of your own to transfer the ex-employer RRSP funds into, so you don't trigger a tax event. I've done this and it's not difficult, just kinda paperwork-y and it takes a while but doesn't require any attention from you while it's happening. When it's done, you'll have to decide how to invest the money but that can wait until then, don't worry about it right now.
It's awesome that you're in a better place and feel up to taking this all on! You can eat that elephant: just take one bite at a time. You'll do great :)
posted by Mary Ellen Carter at 6:56 PM on July 17, 2019 [1 favorite]
This thread is closed to new comments.
posted by Feminazgul at 9:52 AM on July 17, 2019