Most likely by now you have your paper work for your taxes or your access code if you e-file, so it is time to think about doing your paperwork for your taxes. I was thinking about mine and I thought perhaps I should share a few ideas on dropping that tax load.
1) Know your deductions that you could claim. Some of the often overlooked ones are:
– moving expenses if you move to a new job more than 40 km
– medical expenses which can be claimed in the name of the lower income earner of your household
– keeping taxable investments in the lower income earners name (see a few great articles on the types of investment income over at Million Dollar Journey – Part I, Part II)
-if you live in anywhere fairly far north check if you can claim northern living allowance (they have two zones which qualify, and you would be surprised how far south it goes)
-Using Spousal RRSP’s to get the biggest tax break possible if you and your spouse are in different tax brackets
-donations to a political party offer a better break than a charity
2) Consider doing the bookkeeping on anything you do to earn money beyond your day job. If you claim it as a small business ( sole proprietorship) you can write off reasonable expenses from the income you earned and don’t have to register the business (check you local Provincial law to make sure). This takes a bit of setup work, but can often be a big saver if you do the work up front.
3) Learn which tax credits can be transferred between you and your spouse and run both sets of numbers to ensure the biggest return.
4) Pay attention to those Federal/Provincial budgets and find out which tax breaks start in the current tax year if your not sure check out taxtips.ca(they often update everything at least once a month).
That’s just a few simple tips. If you have your own favorite, please share with a comment.