Tax Season is Upon Us
by Terry Bennett, Money Coach, Mac’s Money Centre
Tax season is upon us, and for so many the idea of filing our taxes fills us with trepidation. I would like to offer another way of looking at this task.
Understanding how taxes affect your financial situation is a life skill and once mastered can quell any anxiety about the process. You need to educate yourself on the areas of taxation that impact you, and keep up to date on the changes so that you can take advantage of the deductions and credits that can lessen taxable income and the amount of tax you have to pay. After filing you will have a better idea about how you can use the tax system to your advantage. And that is key!
There are many ways to not only lessen your tax burden but depending on income and family situation you may be eligible for refunds, rebates and benefits. Without filing yourself or at least knowing what receipts you need to keep and what information needs to be shard, you may not be taking advantage of what is allowed.
So, let’s review some important information.
One of the most helpful deductions is your contribution to a Registered Retirement Savings Plan (RRSP) or Registered Pension Plan (RPP). This deduction lowers your taxable income, dollar for dollar. An example, if your income is 40,000.00 and you make a $5000.00 contribution you will have a taxable income of $35,000.00. This lessens the amount your taxes are based on, and in some instances, alter your marginal tax rate. The deadline for adding funds to this plan is March 2. If you ‘ve missed the deadline start putting some money aside for next year.
A tuition credit is available for alumni who have recently entered the workforce. This amount is based on the information that you have given to CRA over the years as a student (through the T2202A). This credit lowers the amount of tax you’ll need to pay.
If you have children and require child care in order to work, this is another significant deduction that can lower your taxable income.
If you bought a home this year there is a First Time Home Buyers Incentive which can amount up to $750.00 in tax relief. (It’s a $5000.00 non-refundable Tax Credit.)
Ontarians can now claim the Climate Action Incentive and it has increased over last year’s amount. Only one family member can claim this credit but the amount is based on family size. For those whose income qualifies you may be eligible for GST/HST rebates and the Ontario Trillium Benefit.
These are a few relevant deductions/credits that may be available particularly to newer graduates. If you are unfamiliar with these and think they may apply to you visit the CRA website for additional information on these and many other related issues. www.canada.ca
April 30 is the deadline for paying any taxes that are due and filing a return. However, if you do not owe Canada Revenue Agency (CRA) any money, then you can file at any time. For those that have not done taxes before and could have filed earlier, the CRA lets you go back 10 years to get caught up. If you are eligible for any past benefits or rebates, you can collect for the last 4 years. However, the sooner you file the faster you will receive any refunds and any other monies that you are entitled to.
If you are self- employed, you can file by June 15 but any money owed is still due by April 30.
If you have all your slips from your sources of income and want to get a jump on your refund you can file from February 24th on.
Macs Money Centre is here to help with some of your tax questions and will support you completing your tax filing in a number of ways.
You can book an appointment with the Money Coach or you can come to a DIY workshop. In both instances you will do your taxes yourself but there will be trained staff to oversee what you are doing. You can also attend a clinic where one of our trained tax squad members will submit it for you. All of these resources are offered for free but we can only handle households with incomes under $30,000.00 and are not self-employed. Appointments can be made for all of these options through Oscar Plus. — “Appointments “with the Money Coach and “Events “ for the other methods.
Terry Bennett,
MACs Money Centre
