Don't be the April (tax) Fool

Day by day, this year’s tax deadline is looming larger. You know it’s there – you’re not unaware. But you may be unprepared. Stop the tax foolishness.

 

Get organized

• Put all your tax slips together in a safe location so you’ll know where to find them come tax preparation time.
• Look at each slip to ensure the numbers are reasonable.
• Know where last year’s tax return is located and look at that return as your tax slips come in to ensure you’re not missing any.
• Locate last year’s Notice of Assessment, which provides important info about last year’s tax return and current year limits for such things as your Registered Retirement Savings Plan (RRSP) contribution room.
• Register ‘My Account’ on the Canada Revenue Agency website (http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/myccnt/menu-eng.html) and you’ll be able to track your refund, view or change your return, check your benefit and credit payments and your RRSP limit, set up direct deposit, and much more.
• If you are self-employed be sure you have receipts for all expenses claimed against your self-employed income.

 

Be sure to claim all your tax deductions and credits

• Start by comparing last year’s return to this year’s – but keep in mind that this does not ensure you are claiming all the deductions and credits to which you are entitled.

 

Know what’s new for this tax-filing season

• First-time donor’s super credit – This new credit gives first-time donors an extra 25% credit for cash donations when you claim your charitable donations tax credit. For more information go to www.cra.gc.ca/fdsc.
• Family caregiver amount – If you have a dependent with a physical or mental impairment, the additional amount you may be able to claim has increased to $2,040. For more information go to www.cra.gc.ca/familycaregiver.
• Pooled Registered Pension Plan – The PRPP is a new retirement savings option. For more information go to www.cra.gc.ca/prpp.
• Adoption expenses – The period to claim these expenses has been extended for adoptions finalized in 2013 and later years.
• Tax-Free Savings Account – The annual TFSA dollar limit increased to $5,500 on January 1, 2013 for the 2013 contribution year and remains the same for the 2014 contribution year. 

 

Avoid interest and penalties

• File and pay any balance owing on time.

 

Know when to file

• If you expect a refund, consider filing as early as possible. If you owe taxes, delay the filing date until as close to the due date as possible.

 

Lots of Canadians prepare their own taxes –but if yours is a more complex tax situation, it truly pays to seek professional assistance.

 

This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.