As the deadline to file your taxes approaches, experts are saying organization is key to ensure you maximize your benefits.
But even as the focus turns to this year’s taxes, they also say it’s best to start getting everything lined up for next year too.
Alexander Nour, a tax accountant with Nour&Daniels, says getting a plan in place can help save you money on your return.
“First and foremost, every Canadian taxpayer is different,” he says. “Everyone has their own situation and has their own variables.”
If you are scrambling to meet the deadline, there are some things to consider, like collecting every receipt you can, including from charitable donations, eligible out-of-pocket medical expenses and child care expenses.
Nour says for those filing together, knowing who the larger earner is can help you decide where to use the deductions.
“Typically, shifting the medical expense credits to the lower income spouse saves you the most money and is the most tax efficient,” he explains.
But, donations can mean the opposite, he says.
“Typically, moving the donations to a registered Canadian charity to the higher income spouse gives you the best bang for your buck,” he said.
“Those types of shiftings and optimizations are really important to plan out.”
If you own a small business, Nour says to keep track of your work from home expenses because you may be able to deduct on a portion of your mortgage and utilities.
Look to the future
Nour says you can use this time of year to ensure you’re on track for next year’s tax season.
Make sure your registered accounts are in order, like RRSP’s for retirement savings or a First Home Savings Account (FHSA) so you can minimize your tax burden.
Being organized in a simple way all year can help to avoid stress, he says.
“Keeping a folder or some type of a binder or a drawer where you could just put everything,” he said.
“Keep a track of your receipts, keep track of what happened throughout the year.”
Nour says having a safe place to keep your receipts for a few years is also important, because the Canada Revenue Agency (CRA) can come back and ask for proof on things you claim.
The deadline to file by the CRA is April 30.
