Tax Returns 101
Always, Always File your Taxes
Your Tax Questions Answered
Self Employed Person’s Tax Deadline
Deductions to Consider
- Donations from past years: If you have made charitable donations during the current tax year, or any of the past 5 tax years, you can use a receipt from the donation to reduce your taxable income amount. Lost the receipt for your donation? The charitable organization can usually provide you with a copy if you request one.
- Tuition paid: Tuition amounts paid to recognized post secondary institutions can be claimed on your tax return in the year you paid them, or you can roll the tuition amount forward if you anticipate earning a higher income in years to come. Request a copy of form T2202A from your post secondary institution to apply for the tuition tax credit.
- First Time Homebuyer’s credit: If you have recently purchased a home, you can qualify for a valuable $5,000 tax credit, so long as you have not lived in a home that you (or your partner) have owned in the past 4 years.
- Student Loan Interest Deductions: Student loans are a drag, but there is some relief available, interest on student loans is tax deductible.
Should I Contribute to my RRSP or TFSA prior to filing my taxes?
The decision to contribute to savings accounts such as a registered retirement savings plan (RRSP) or a tax free savings account (TFSA) can be confusing, but there are a few rules to follow that can guide you through your account contributions this tax season.
TFSAs and Choosing Where to Contribute
If you fall within the lowest tax bracket in your province, it may be in your best interest to contribute as much as possible to a TFSA rather than an RRSP. For people earning a lower income, a TFSA offers greater savings flexibility, but is not tax deductible. In the lowest tax bracket, having a flexible savings account that allows for easy contributions and tax free withdrawals can be more beneficial than deducting from your taxable income, because you are already paying the lowest rate.
RRSPs and TFSAs are both important accounts to discuss with your bank or a professional financial advisor. For tax purposes, the key difference between the two is that a TFSA helps you to easily withdraw money in a pinch without penalty, whereas an RRSP taxes any money you withdraw and is intended to sit and earn interest until you retire.
The Fryzuk Group is committed to improving your financial wellness. If you’d like to learn more about filing overdue taxes, tackling rising interest fees, or eliminating debts owed to the CRA, contact us today for a free, private consultation.