Maybe the holiday season left you with some debt.
Or perhaps you have plans to complete a home renovation or take a vacation.
Whatever may be the case, you’re probably hoping for a return on your income tax this year.
Here are some tips to try to save yourself tax dollars – and generate the biggest income tax return possible.
Take Ownership for Your Own Finances
Nobody is going to care more about your money than you do.
That’s why completing your own income tax return is a great idea. Not only is it an opportunity to save accountant expenses, but it’s also a chance to better understand the Canadian tax system.
There are many online programs available that will walk you through each step of your tax return paperwork.
If you don’t feel comfortable enough completing your own tax return – or your financial situation is a bit complicated – than it may be beneficial to consult with a tax expert.
Maximize Your RRSPs
Many financial advisors suggest that maximizing your Registered Retirement Savings Plan (RRSPs) is the best way to keep money in your pocket at income tax time.
Check last year’s Notice of Assessment to determine what the RRSP limit for the current year is. Make a contribution before the March 1 RRSP deadline.
Since RRSP contributions are tax-deductible, making these contributions enables tax savings come income tax time.
However, be careful not to over-contribute – a contribution of $2,000 is subject to a one percent penalty tax for each month you are in excess of that.
Know Your Tax Benefits and Deductions
Taking advantage of applicable tax deductions and benefits on your income tax return can drastically increase your return.
Depending on your personal situation, tax deductions can include employment and medical expenses, tuition credits, transit costs and GST/HST and Canada Child Benefit (CCB) payments.
Preparing for the Upcoming Individual Income Tax Return Filing Deadline
With the individual tax return deadline of April 30 looming, the time is now to be gathering your paperwork together. Doing so helps ensure that you are well organized when it comes to filing time – and can help to maximize your return.
No plans for your expected income tax refund? Choosing to pre-plan for your funeral is a smart way to use your extra cash flow. Reduce the stress and headache for family and friends by making your end-of-life decisions yourself.
If you’re a fellow small business owner like us at Circle of Life Cremation and Burial Centre Inc., you may be interested in learning about specific tax tips for small business owners. We found the information at this link really helpful!