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Newsletter for March 2016

Tax Saving Tips Here!
 
Bespoke Quarterly Newsletter – March 2016
Trending Topics | Financial Tips | News | & More

It’s a Taxing Time of Year!

 

Most Canadians have started to gather together the important information required for filing their 2015 personal income tax return. For many, tackling tax season can be a pain but if you are well informed and understand the latest tax rules, this can certainly help to alleviate some discomfort.

To help make sure you are not missing out on tax savings, we are sharing some important tax strategies.

Tip: Generally, your tax return has to be filed on or before April 30th. Since the 30th falls on a Saturday this year, the deadline is May 2nd (the next business day). Your return must be received, or postmarked, no later than May 2nd 2016 to be considered received on time.

Source:Public Accounts of Canada 2013

Tax Savings Strategies. What you need to know:

  1. For Seniors – Pension income splitting – if you receive pension income, or RRIF or LIF income and are at least 65, you can share up to 50% of your pension income with your lower income spouse. On your tax return, you jointly elect the amount of pension income to share with your spouse. It’s that simple. 

 

  1. For Parents – Are you spending lots of time driving your children to and from extracurricular activities? If this is the case, there is good news! The Children’s Fitness Tax Credit allows you to claim 15% of eligible amounts, up to $1,000, paid for eligible programs for children under the age of 16. There is also a Children’s Arts Tax Credit available. This credit allows you to claim up to $500 per child under the age of 16 for registration in an eligible program of arts-related activity. 

 

  1. RRSP Contributions – Your RRSP contribution can reduce your taxable income in the current or any future years. If you are a high income earner and anticipate being in a higher tax bracket in the next year or so, you may choose to deduct your RRSP contributions in a future year. For more information on RRSPs, see our most recent blog.

 

  1. Homebuyers’ Plan Participants (HBP) – Be sure to contribute at least the minimum HBP repayment to your RRSP each year. Otherwise, the amount will be included in your income and the RRSP room is lost forever. 

 

  1. Charitable Giving – You and your spouse’s charitable donations can be combined and claimed on the higher income spouse’s tax return to minimize the family tax burden. Consider donating appreciated eligible securities instead of cash for even more tax savings.


Tip: Even if you don’t owe any taxes, file an income tax return. When you file, you may be eligible for some refundable tax credits and you may also accumulate RRSP room.

Quote of the Day

“The hardest thing in the world to understand is the income tax.”
-Albert Einstein

Get Your Refund Sooner

Are you an employee who regularly receives a tax refund each year? Although it’s nice to receive a refund come tax time, you have given too much of your money to the government (hence the refund). Wouldn’t it be better to have a higher pay cheque all year round? If you regularly make additional RRSP contributions or claim other credits such as the spousal, tuition, child care or donation credits on your income tax return, you could apply for reduced withholdings from your employer. Then, make this even more effective by using this additional income to contribute to your RRSP, TFSA or pay down debt.

If you are unsure if you qualify for any of the above tax breaks or need your tax return prepared by a professional, please contact us soon.

Resource of the Day

A good source for tax information or a quick income tax calculator is www.taxtips.ca.
We hope you find this resource helpful. Please let us know if you have any questions.

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 Click here for November 2015 Newsletter: “What is Stressing Canadians?”