Useful tips for filing your taxes
It’s tax time again! Although this isn’t the highlight of many people’s year, here are some useful tips to keep in mind to make your tax filing go a bit smoother.
Know the filing deadline and be prepared
To avoid late penalties and interest charges, make sure to file before the deadline. The 2013 deadline to file personal taxes is April 30, 2014. Before you start, gather all your important tax documents including your T4 & T5 slips, and all your receipts. Make sure to keep your receipts someplace safe to have on hand if you are audited, and keep your past tax returns for reference.
Make the most of your RRSP
Not only is a Registered Retirement Savings Plan (RRSP) a great way to save for retirement, it can also reduce the amount of tax you pay. Contributions to an RRSP are tax deductible, and income earned in your RRSP is tax exempt as long as the funds remain in your RRSP. The deadline for RRSP contributions for 2013 was March 3, 2014, so if you contributed to your RRSP, remember to include this in your tax filing. And if you haven’t yet contributed to an RRSP, you should consider doing so next year.
Deductions, deductions, deductions
Look into any and all deductions you may qualify for. For example, did you make a charitable donation in 2013? You may be eligible for a tax credit. And if you haven’t made a charitable donation before, you may now be eligible for the new first-time donor’s super credit (a tax deduction for first-time donors to a maximum of $1,000 that is made after March 20, 2013). Do you take public transportation to work? If so, you can claim the cost of your monthly public transit passes for 2013. Just make sure you have the supporting documentation.
Save time – file online
Did you know that 75% of tax returns received by the Canada Revenue Agency were filed electronically last year? If you haven’t already done so, try using software or an online service, and make sure to register online for direct deposit of your tax return. Although you can still receive your tax return in the mail, the Government of Canada is phasing out federal government cheques by April 2016. You may even get your return faster this way.