This is the time of year when the world of work is split between those eagerly awaiting tax refunds and those dreading seeing how much they owe. Yes it's true, it's tax time. The buzz started with the distribution of T4, which companies have until the end of February to deliver.
Tax returns are one of those things in life that are needed, but never really looked at.
It's a wonder that there isn't a life skills course offered in high school that covers real life lessons such as budgeting, tax requirements and filing, resume writing, interview skills and shopping.
Now is the time to put together all the documentation you need to prepare your taxes. This includes slips such as T4, T4A, T4E, T5, T5007, receipts and certificates. Although most personal tax returns are filed electronically, hard copies or records should be kept and available to the CRA upon request.
One of the tax reduction options still available is RRSP contributions. The deadline for RRSP contributions for the 2017 tax year is March 1, 2018. It is important to keep track of your RRSP contributions to ensure you do not exceed the limit and incur penalties of excess contribution. Although you are entitled to a lifetime excess contribution of $ 2,000, it is best to carry over any excess to the next tax year.
Investments are another unclear area for most people. There are a multitude of qualified RRSP investments, such as segregated funds or mutual funds, stocks, bonds, ETFs and GICs. It is important to have a diverse portfolio. In other words, don't put all of your eggs in one basket. If you haven't already, this would be a great time to speak with a professional financial advisor. Financial planners understand all the benefits and risks of each of these options and which ones would be best for you and your stage in life.
Now that we've talked about planning for the next tax season, stay tuned for more advice on tax savings possibilities.