What if I told you there was a fifth season in Canada? It starts around the end of February and lasts for eight weeks or so. It is dreaded by people across the country but there is no way to escape. You can’t hop on a plane down south to get away, like you can when you become fed up with winter. Central air-conditioning and a glass of ice water won’t save you, like they do during the hot summer months. So, what season is this?
Did you feel that chill run down your spine?
Taxes are due at the end of the month and, for many, it’s a mad dash to the finish line. The pressure to file on time can be suffocating at times. However, proper planning and careful preparation can actually leave you with a smile on your face. In fact, you may be able to get a bigger than expected tax refund if follow my advice.
There are lots of ways to limit the amount of taxes you have to pay with various tax credits and tax deductible expenses. Unfortunately, a lot of Canadians fail to deduct everything they are able to. This causes you to pay more taxes than necessary – and that takes money out of your pocket!
Charitable Donations – This is where you can reap the benefits of being generous. The Canadian Revenue Agency will give you a federal tax credit on 15% of the first $200 you donate, and 29% on donations over $200.
But wait, what’s that there in the sky? It’s a bird, it’s a plane, no, it’s the “First-Time Donor’s Super Credit”. This mild-mannered tax credit can leap tall tax bills in a single bound. If you are a first-time donor, you can receive an additional 25% tax credit on your charitable donations.
Keep track of the money you donate to charity, and you won’t have to “donate” as much to the government.
Moving Expenses – Did you start a new job this year? If you had to re-locate for employment, you can probably deduct the moving expenses. Things like rental vans, furniture storage, and breaking a lease are all tax deductible. The only caveat is that your new location must be at least 40 kilometres closer to your place of work than your previous residence. Moving ain’t all bad, now is it?
Child Related Expenses -Children bring parents loads of joy, but also a few financial challenges. Daycare, hockey school, piano lessons and summer camp can all be claimed as either a deduction or a non-refundable credit on your return. Kids can be expensive, but knowing the system can decrease your tax bill. Don’t be afraid that including these deductions on your tax return will put you on the Canadian Revenue Agency’s radar. As long as you keep proper records, you’ll have no problems. And remember, these deductions are in place for a reason. You don’t want to pay more taxes than you need to, right?
Consolidated Credit Counseling Services of Canada, Inc. has prepared all of this information in a handy little booklet called Taxes: Save Money, Solve Problems. Take a minute and check it out. Also, consider seeking out the assistance of a tax advisor who can help you learn more about these and other tax strategies applicable to your specific financial situation.
Increasing your tax knowledge could save you piles of cash. Cash that could be better spent on some summer fun. Summer is coming…..right?