It pays to be more lively. Although the 2009 tax deadline is still far away, now is the perfect time to review your income and expenses and make sure you get enough bang for your tax money.
CIBC of tax and estate planning expert Jamie Golombek are 10 tips to make the most of your tax return and enjoy any tax relief available before ringing in the new year.
“It is important to review your overall tax planning strategy with a professional now and make sure you make the most of every opportunity available to you.
This is particularly important because of new savings and investment vehicles, funds and policy changes which came into force for the first time in 2009, Golombek advises.
1 – Lose your losses
Tax-loss selling is the practice of selling investments that are in a deficit position at the end of the year to offset capital gains realized during the previous three years. The deadline for transactions in government securities generally falls on or before December 24.
2 – Make home sweet home
2009 has brought a host of tax benefits to owners and prospective owners. Canadians should consider changes to the Plan (HBP) and their eligibility to non-refundable First Time Home Buyer’s Tax Credit (HBTC). Anyone considering a home renovation has until January 2010 to receive a maximum credit of $ 1350 tax by the temporary home renovation tax credit (HRTC).
3 – Enter the golden years
People who turned 71 in 2009 have only until December 31 to make their last registered retirement savings plan (RRSP) before converting the plan into Registered Retirement Income Plan (RIFF).
4 – Look and learn
Flexibility has been enhanced recently registered education savings plan (RESP) were added and now provides investors with opportunities to supplement their savings with a number of government grants.
5 – Give generously
December 31 is the last day to donate to a registered charity and receive a tax credit for 2009.
6 – Know your deadlines
All Canadians eligible for the tax credit for people with disabilities, their parents and other eligible donors have until December 31 to contribute to a Registered Disability Savings Plan (RDSP) and ask for matching Canada Disability Savings Grant ( SCEI) and based on the Revenue Canada Disability Savings Bond (CDSB) for 2009.
7 – purchase for your business
Self-employed or small business owners should consider making major purchases planned for 2010, as new equipment or office furniture before the end of 2009 to take advantage of the depreciation of a full year. And other temporary special 100% write-off for new computer equipment is now available.
8 – Divide your income
Thank you to all interest rates historically low, it is time for couples to consider income splitting. The idea is to transfer income from higher paid spouse paid a minimum to reduce taxes. Any return on investment greater than 1% can then be taxed to the spouse with lower incomes.
9 – You can pay up
Pay distribution fees at year end. Interest paid on loans for investment purposes as well as fees for investment advisory accounts not to RRSPs are deductible from your income for 2009, but only if the costs are paid by December 31.
10 – Be proactive
Apply to pay less tax every year by completing Form T1213 to the CRA before December 31. Once approved, your employer will be able to reduce the amount of tax withheld at source, taking into account deductions such as RRSP contributions or expenses for childcare.
