Now that the April 30 Personal tax deadline has passed and your taxes are (hopefully) filed, make sure to plan properly for the 2010 tax year. In order to make next year’s taxes worthwhile, you need to make some changes right away.
Set up a monthly RRSP contribution from your bank account or payroll. Many individuals wait until the last minute to make an RRSP contribution or forget to do so. Why wait? By having your money deposited monthly, you’re paying yourself first and taking advantage of dollar cost averaging.
If you have taken advantage of the home buyer’s plan and/or lifelong learning plan, don’t forget to make that minimum RRSP contribution repayment during the year. Failure to do so will result in an increased taxable income based on your minimum repayment.
Keep all medical receipts, even those medical expenses partially reimbursed from your private insurance plan involves a tax deduction.
Keep all monthly/weekly public transit passes.
Keep all childcare expense receipts. Up to $5000 of childcare expenses can be claimed per child.
Keep all child fitness activities receipts. Up to $500 fitness activities may be claimed per child.
Position your investments tax efficiently. Capital gains and dividend income is taxed at lower rates than interest income. Keep all your low risk interest income earning investments inside an RRSP and/or TFSA.
If you are experiencing a life change, such as the birth of a baby or a marriage, make sure to take advantage of all tax benefits offered through the Government and start right away!
Don’t wait until next year to file your taxes and hope for a miracle! Proper tax planning does take a little bit of time and effort, but you will be rewarded financially if done correctly. Book an appointment with your Accountant today!
