How Being Proactive can Pay Off at Tax Time

How Being Proactive can Pay Off at Tax Time
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With tax time quickly approaching, as it does each and every year, often this time of season carries with it a lot of stress and concern for many people. With this being a commonly-shared emotion felt by many Canadians – perhaps taking a proactive stance against tax season can help to not only alleviate some of this stress, but maybe it can also even help you achieve better tax returns.

If you want to be more efficient in your tax forms this year, there are some tips that can help prepare you for a more satisfying outcome. While these are only a few select tips which can help you this year – they are useful pieces of information which can get you off on the right track.

Tip #1: Knowing all of the important dates:

Being aware of all of the the dates and deadlines for all stages of the tax filing process can certainly help you to keep track and be prepared as possible. A lot of our worry can come from losing track of the time and then having to rush to get things done. This proactive step can also ensure that you won’t miss any important details or pieces of information that will benefit you at tax return time. For any additional information, you can consult the Canada Revenue Agency (CRA) website

Some important dates to jot down in your calendar include:

• February 2, 2015 – Tax packages are available at post offices, local tax services offices and online.
• February 9, 2015 – First day to use NETFILE software program for filing your taxes.
• March 2, 2015 – Deadline for employers to give you an information slip, usually a T4 earnings statement.
• March 2, 2015 – Deadline to make RRSP contributions for the 2014 tax year.
• April 30, 2015 – Deadline for most tax returns. If you owe anything, you must pay by this date or you will be charged interest.
• June 15, 2015 – Deadline for self-employed persons. If you or your spouse or common-law partner carried on a business in 2014 (other than a business whose expenditures are primarily a tax shelter), your 2014 tax return must be filed on or before June 15, 2015. However, if you have a balance owing for 2014, you still have to pay it on or before April 30, 2015.

Tip #2: Top up RRSP Contributions

If you make RRSP contributions, you might consider making an over-contribution of $2000. As per tax ruling, you can contribute up to $2000 more than what you are normally able to contribute, without facing penalties. Although this $2000 is not deductible at tax time, it does remain in your RRSP for years to come and can earn interest over time.

Tip #3: Remember to Include all T-Slips

If you have been rushing to finish filing your taxes on time, chances are you may have missed a T-Slip or two. Alternatively, maybe it is that you’ve not forgotten to include one, yet don’t think you have to send them all in because the slip issuer also send these to the CRA? Well this can still lead to problems down the road that you won’t be so thrilled about. If, in the event you do not report some of your income in any of the three previous years, you can be penalized. The penalty for this ‘repeated failure to report income’ works out to be 20% of the amount of income you have not reported. By thinking ahead and being organized you can keep track of all of these important statements and make sure you will not face this financial penalty this year and in future years.

Tip #4: Claiming all Eligible Medical Expenses

According to experts in the tax field, medical expenses are at the top of the list for most overlooked tax breaks. While many individuals don’t include all of these expenses for reasons such as believing they have already over-exceeded the income-related threshold – as per the rule that only expenses that exceed the lesser of $ 2171 or 3% of net income can be claimed. In addition to this rule however, there are many other expenses that do qualify that filers are unaware of. For example, travel expenses, such as having to travel for more than 40 km in one direction for necessary medical treatments.This is just but one of the many, however as you prepare to file your tax return, consider looking into all of the claimable expenses so that you can get the most out of your return this year.

There are many more tips that can help get you off on the right foot this tax season. By first being aware of all of the timelines for when you can start filing, as well as when the final days to have them submitted by is an important first step. Personally, I like to write all of these dates down on a calendar so I am able to look ahead and be as prepared as I can be.

In addition to being prepared and leaving yourself enough time to collect all of the documents you need for your tax file, you can also learn more about certain areas of expenses that you can claim – many of them that perhaps you were not previously aware of. Combining these two components into your approach to tax season, you can make sure you are receiving the amount of returns that you are entailed to. Certainly receiving back tax money is a helpful way to manage your finances and even pay off some of your debts. This is just one more reason why being knowledgeable and proactive about taxes this year is in your very best interests.

 

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