It’s tax season

BY FAZAAD BACCHUS

It’s that time of the year where the buzz word is TAX. All around you can see advertisements where tax accountants and preparers alike are looking for your business. With so many all around, it’s quite a daunting task as to know who to go to. The deadline for filing your taxes for most people is April 20^th, 2019 and the CRA will charge you a penalty if you were to file late. Self-employed persons have until June 17^th, 2019 to file, but if they owe taxes, its due on April 30^th. There are four ways in which you can complete your return: Netfile, Efile File My Return and filing a paper return.

There are the big names that will do your taxes for you in a jiffy, it may be a little impersonal, but they may even provide you with your refund on the spot. On the other hand, there are personal tax accountants who will spend time with and also try to get you the best refund possible to be able to keep your business. The only thing that you need to be careful about is that when an accountant promises you a greater return or makes you a greater return, it doesn’t mean that everything was submitted above board and if there is an audit from the CRA, you will be in the hot seat. Alternately if you need help and cannot afford to complete your filing due to low income, you can contact your local Community Volunteer Income Program (CVITP)

To be able to reduce taxes payable for the year 2018, many people made last-minute contributions in their RRSP plan, it’s one of the few things that you could have done. The TFSA doesn’t help to reduce taxes in the manner that the RRSP does, but it does reduce your overall taxes as the investment grows tax-free. Any open account or non registered that you have will attract taxes in the form of interest income and possible capital gains if you were to sell that non-registered account. A non-registered account, if it has distributions during the year, will also add to your tax bill.

Other things that can help you to reduce your taxable income include but are not limited to: Canada Child Tax Benefit (CCB), Climate Action Incentive (CAI), Goods and Services /Harmonized Sales Tax Credit (GST/HST), Working Income Tax Benefit (WITB). It’s important to do proper tax planning with your financial advisor, and I don’t mean by preparing tax returns, I mean proper tax planning. As an example, if you are on Guaranteed Income Supplement (GIS) and you were to make a large redemption from your RRSP it will reflect as an increase in your income, thus affecting your GIS payments. Or if you were to take your CPP payments at 65 would that affect your income positively or should you delay to 67 or even 70? These are all tax planning strategies that can help you retain more of your hard-earned income.

I am a big believer in saving for your retirement and I have helped many clients with a good return and safe investments over the years, but its equally important for my clients, having retired, to retain their money as long as possible by paying the minimum taxes allowed.