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Tax Planning - Plan Ahead

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Personal Income Tax -> Plan ahead for next year's tax return

Tax Planning - Start Early!

You should plan ahead so that you are prepared to file your tax return next year without too much difficulty.

One of the most important things to do during the year is to store all tax-related documents in one place.  If you have a filing cabinet, have one or more folders for these documents, including:

bulletyour tax returns and supporting documents for previous years
bulletnotice of assessment and any other correspondence from Canada Revenue Agency
bulletrecords of tax instalments made
bulletwage statements
bulletmedical and dental cost receipts - see eligible medical expenses article
bullettransit pass receipts
bulletreceipts related to children's fitness/activity credits and children's arts tax credits, if your province/territory has a tax credit for these.
bulletchild care cost receipts - could include summer camp receipts
bulletreceipts for moving expenses, if you moved at least 40km to be closer to a new job, to run a business, or to attend a post-secondary educational institute full time
bulletcharitable donation receipts
bulletpolitical donation receipts
bulletRRSP contribution receipts
bulletrecords of repayments to Homebuyers' Plan or Lifelong Learning Plan
bulletrecords of RRSP or RRIF withdrawals
bulletrecords of investment purchases and sales in non-registered accounts (transaction confirmations)
bulletinvestment account monthly statements

If you don't have a filing cabinet, pick a drawer or two in which to store these records, or get a multi-pocket expandable file folder, preferably legal size.

If you are an employee, make sure that the TD1 form filed with your employer is up to date.  Review the amount of income taxes, Canada Pension Plan contributions and Employment Insurance Plan premiums being withheld from your wages.  See our article on take-home pay calculators.

If you have investments in non-registered accounts, see the following:

     - Tax Issues re Investing, and Tax Treatment of Different Types of Investments
     - Foreign Asset Reporting - Form T1135 Foreign Income Verification Statement - VERY important!

Now is the time to look for a tax professional if your financial situation is getting more complicated.  Don't wait until next tax season, when they are all extremely busy.  Our Directory has links to accounting, bookkeeping and financial planning organizations in Canada.

Use our Canadian Tax Calculator to project what your tax situation will be for this year, and let it help you to determine how much to contribute to RRSPs during the year.

Tax Tip:  Nobody plans to fail - they just fail to plan!

Revised: May 17, 2017

 

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