During the last week I have been filling in some of my tax information into QuickTax 2006 to get an idea of what my tax refund will look like. I am still missing one of my T4 slips from my previously employer, but I used my last pay stub to build a fairly accurate estimate. Then I entered in some of my basic deductions like RRSP’s and a few T5 and T3 forms I already have.
So far I’m almost at a refund of $5000 and I still have deductions for my move and partial northern living allowance that I can claim for last year to enter in. So I’m currently looking at the single biggest tax refund I have ever gotten.
How did this happen? Well a combination of weird events. First off in Jan 2006 I got a BIG bonus cheque which got taxed to hell. Then I maxed out my CPP contributions for the year at my old job just before moving to my current job. So my CPP contributions started all over again and I ended up almost maxing out again.
Then the icing on the cake is I forgot my wife still had some carry forward credits from last year which should easily drop her under the basic deduction and result in no tax payable.
So the government ripped me off and took far to much of my money. So now I’m waiting for my tax forms to roll and and Netfile to come back up so I can get money back. To summarize today’s lesson is don’t let the government hang on to your money and if you can fill out any form you can find to legally reduce your tax bill at the source.