Tax Time: Are you Ready?
With tax season in full swing, and the deadline not that far off, if you’ve not already thought about filing your taxes the time to get going is now.
If you’ve not done so already, collect all receipts into one file/drawer/shoebox. Getting organized means maximizing tax deductions and contributing to your refund, or reducing the amount that you owe.
Paying your taxes timely is much like paying credit card bills on time. If you indeed owe the government, you will end up wasting money on interest charges if you are late with your filing. The usual deadline to file your taxes is April 30, but they have extended the deadline, due to Heartbleed bug.
My income is Low/I have no Income
Are you saying, why should I bother? I only work part time or I am a stay at home mom, and I never end up owing any taxes, because I don’t generate enough income.
There are a number of reasons to file, the most compelling of which include extra cash in your pocket (some on a regular basis), including the GST credit, Universal Child Care Credit and the Canada Child Care Benefit. There are also specific provincial and territorial (and sometimes municipal) programs that offer cash to parents.
Consider Filing Online
Why? It’s faster, more efficient and means that you can access any refund you have coming your way more quickly. It is the best way to make sure that there is no interruption to benefit or credit payments. Also, you can arrange for a refund to be made via direct deposit to your bank account. No watching the mailbox and waiting. The CRA says that your refund can be in your hand in as little as eight days if you file online.
Tax Deduction Inventory
If you are filing your own taxes, you may want to take a few moments and make sure that you are maximizing on some of the tax deductions available to you.
Did you maximize your RRSP contributions for this past year? If you did not, you may want to consider doing so for the current year (you can even think about using any tax refund you get back to slide into RRSP contributions, generating another deduction for the coming year.
You are eligible to claim medical expenses that have not been reimbursed, like prescription medication, dental surgery that’s not covered by insurance, or laser eye surgery. Expenses that total more than $2,052 or 3 per cent of net income can be claimed.
Did you know that you can get tax deductions for expenses incurred when moving? If you’ve moved more than 40km because of work or to attend school, you are able to deduct expenses like transportation, storage, real estate commission fees and even some food and accommodations.
Educational Tax Credits
Going to school? Even if it is part-time, your tuition is tax-deductible.
Child Care Credits
Do you pay for child care? Don’t forget to include receipted expenses from daycare, nannies or babysitters.
Also, if your child participates in sports or recreation, a portion of their fees is eligible for deduction as well.
Did you donate this year? Collect any receipts and submit them as well. You’d be surprised how little amounts can add up to decent deductions.
This, by no means is a comprehensive list. Visit the Canadian Revenue Agency’s website for all the information you need, including deadlines, benefits, deductions and instructions on how to file.