Itâ€™s January and that means that means tax season is almost here. This is going to be my nineteenth year preparing personal tax returns and things have changed quite a bit during that time. When I first started preparing tax returns, I saw a lot of envelopes and shoe boxes that needed the information inside summarized.Â With the advancements in technology I donâ€™t see that too often anymore (thankfully).Â I am fortunate that I have always used software to prepare tax returns and have not had to prepare them manually. Here are some useful tips with tax season approaching:
- Make sure that you have all of your slips (T4, T5, T3, etc) before filing your return. If you miss reporting a slip two years in a row there are penalties.
- If you have RRSP contribution room and cash available, consider a contribution by March 1, 2018. This will reduce your current taxes and also, when you retire, your tax rate could be potentially lower upon withdrawal thus saving you even more tax.
- If you have income from a source other than employment, you should budget to make sure you set money aside in case you owe on your tax return. If you have worked two jobs in one year, it is also possible that you can owe CRA since you claim the basic personal amount on TD1 forms for both employers. You are only allowed one basic personal amount on your tax return.
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