Five things to do now to benefit your next tax return
As the holidays approach, millions of Canadian are doing last-minute shopping. That doesn't leave much time to think about their upcoming tax return. But they should, according to Cleo Hamel, a senior tax analyst with H&R Block Canada.
Canadians can make a big difference on their next tax return just by following these five simple tips before the end of 2011.
1. Review your taxable income
- Cashing an RRSP is counted as income and you may face a tax bill. If you are thinking of doing it, you may want to wait until January.
- For EI, the tax withholdings may not be enough to cover your tax bill. Remember, this includes maternity benefits.
- If you sold a property or worked two jobs, ask about your tax obligations and how you may be able to reduce your tax bill.
2. Review your accounts
- TFSA withdrawals made before Dec. 31, 2011 means you get the contribution room back in 2012.
- Make contributions to your RESP before Dec. 31 to get the Canada Savings Education Grant.
- If you experienced a capital gain in 2011, you may want to sell a money-losing stock to help reduce your tax obligations.
3. Be Charitable
- Donating more than $200 creates a bigger tax savings.
- Donate publicly-traded shares to avoid capital gains and get a tax receipt.
4. Dec. 31 is the deadline
- The end of this month determines your marital status and province of residence.
- Dec. 31 is also the deadline for charitable donations and medical expenses.
- After Dec. 31, your options for your taxes are only RRSPs.
5. Get Organized
- Don't wait until April 30 to find your paperwork.
- Ask for your receipts for the Children's Fitness Credit and the new Children's Arts Credit now.
- Keep everything in one central location