Preparing for a stress-free tax season
As tax season approaches, a lot of us are thinking about personal finances. If all went according to plan last year, we are all prepared with receipts, T4s and other documents we need to file. For those of us who are less organized than we would like to be and find ourselves scrambling to find receipts from 2009, now is the time to set up a filing system for 2010. If this is an annual problem, we suggest approaching the entire year as tax season and not just the first quarter.
As the year goes forward, keep the following advice in mind from spring to next winter.
If you’re moving more than 40 km for a job or education, your expenses, such as travel costs and storage for your furniture, may be tax-deductible. Keep your receipts.
If you are investing into a Registered Education Savings Plan (RESP) for your child or grandchild, putting in at least $2,500 will maximize the federal grant under the Canada Education Savings Grant (CESG) program.
Keep receipts for capital improvements to recreational property. They may increase your tax cost and ultimately reduce the taxable capital gain when you sell or transfer the property.
Children’s expenses—such as babysitters, daycare, summer camp and boarding school—may qualify as deductible, so (once again) hold onto receipts. This also includes children’s physical activity programs, which may be eligible for the Children’s Fitness Tax Credit.
Review your portfolio for investments that have declined in value since you purchased them. You may want to consider selling them to trigger a capital loss that can offset realized capital gains.
Important 2010 Tax deadlines
While we’re on the subject of things to remember, mark these dates on your calendar:
March 1 — 2009 RRSP contribution deadline.
March 15 — First tax instalment due for individuals who are required to pay income tax quarterly in 2010.
April 30 — Deadline for filing your 2009 personal income tax return (self-employed individuals and their spouse or partner have until June 15 to file, but any balance owing is due on this date).
June 15 — Quarterly tax instalment due. This is also the deadline for self-employed people to file an income tax return (though any balance owing was due on April 30).
September 15 — Quarterly tax instalment due.
December 15 — Quarterly tax instalment due.
December 31—Deadline for charitable contributions and payment of any expenses you plan to deduct in the 2010 tax year. This is also the deadline for converting your RRSP if you turned 71 in 2010. Deadline for contributing to a Registered Disability Savings Plan (RDSP) to obtain the matching Canada Disability Savings Grant and the potential Canada Disability Savings Bond.
April 30, 2011 — If you’re acting as an executor, this is the deadline to file a terminal T1 Tax Return (if the death occurred between January 1 and October 31, 2010; if the death occurred in November or December, the tax return must be filed within six months after the date of death).
Tax time doesn’t have to be a dreadful occasion. In fact, depending on your circumstance, it can be a profitable and therefore joyous occasion—the trick is in the year-round planning. Happy Tax Season!
As the year goes forward, keep the following advice in mind from spring to next winter.
If you’re moving more than 40 km for a job or education, your expenses, such as travel costs and storage for your furniture, may be tax-deductible. Keep your receipts.
If you are investing into a Registered Education Savings Plan (RESP) for your child or grandchild, putting in at least $2,500 will maximize the federal grant under the Canada Education Savings Grant (CESG) program.
Keep receipts for capital improvements to recreational property. They may increase your tax cost and ultimately reduce the taxable capital gain when you sell or transfer the property.
Children’s expenses—such as babysitters, daycare, summer camp and boarding school—may qualify as deductible, so (once again) hold onto receipts. This also includes children’s physical activity programs, which may be eligible for the Children’s Fitness Tax Credit.
Review your portfolio for investments that have declined in value since you purchased them. You may want to consider selling them to trigger a capital loss that can offset realized capital gains.
Important 2010 Tax deadlines
While we’re on the subject of things to remember, mark these dates on your calendar:
March 1 — 2009 RRSP contribution deadline.
March 15 — First tax instalment due for individuals who are required to pay income tax quarterly in 2010.
April 30 — Deadline for filing your 2009 personal income tax return (self-employed individuals and their spouse or partner have until June 15 to file, but any balance owing is due on this date).
June 15 — Quarterly tax instalment due. This is also the deadline for self-employed people to file an income tax return (though any balance owing was due on April 30).
September 15 — Quarterly tax instalment due.
December 15 — Quarterly tax instalment due.
December 31—Deadline for charitable contributions and payment of any expenses you plan to deduct in the 2010 tax year. This is also the deadline for converting your RRSP if you turned 71 in 2010. Deadline for contributing to a Registered Disability Savings Plan (RDSP) to obtain the matching Canada Disability Savings Grant and the potential Canada Disability Savings Bond.
April 30, 2011 — If you’re acting as an executor, this is the deadline to file a terminal T1 Tax Return (if the death occurred between January 1 and October 31, 2010; if the death occurred in November or December, the tax return must be filed within six months after the date of death).
Tax time doesn’t have to be a dreadful occasion. In fact, depending on your circumstance, it can be a profitable and therefore joyous occasion—the trick is in the year-round planning. Happy Tax Season!
