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Tax Planning - Start Early!

You should plan ahead so that you are prepared to file your tax return next year without too much difficulty. If you have a business or are a high-wealth individual, tax planning should always be on your mind, and you should be getting professional tax advice from a Chartered Professional Accountant (CPA). Tax planning should never be an afterthought.

Tax Documents Checklist

One of the most important things to do during the year is to store all tax-related documents in one place. Our preference is to retain electronic versions of all documents, and we have a "folder" for each tax year, with subfolders for tax slips, donation receipts, etc in each tax year. Any electronic files should always be backed up! If you don't retain records electronically, just on paper, then if you have a filing cabinet, have one or more folders for these documents, including:

your tax returns and supporting documents for previous years
notice of assessment and any other correspondence from Canada Revenue Agency
records of tax instalments made
wage statements
medical and dental cost receipts - see eligible medical expenses article
transit pass receipts (only for Ontario seniors)
receipts related to children's fitness/activity credits and children's arts tax credits for Manitoba and Yukon, and the children's wellness tax credit for PEI. The federal tax credits and other provincial tax credits were eliminated.
child care cost receipts - could include summer camp receipts
receipts 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
charitable donation receipts
political donation receipts
RRSP contribution receipts
records of repayments to Homebuyers' Plan or Lifelong Learning Plan
records of RRSP or RRIF withdrawals, and the amount of tax withheld
records of investment purchases and sales in non-registered accounts (transaction confirmations). These should be kept until 6 years after the investments have been sold.
investment account monthly statements
records of contributions to First Home Savings Account (FHSA)

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.

See our article Records Retention - What Books and Records Must be Kept by an Individual or a Business?

Employees

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, by checking against the CRA payroll calculator. See our article on take-home pay calculators.

Investors

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!

If you use spreadsheet programs, it can be very helpful to have an investment continuity schedule for non-registered accounts. The worksheet should have beginning of year balances, purchases and sales during the year, and end of year balances, with capital gains being calculated in the worksheet for any investments sold. If the investments are in US dollars, all amounts should be converted to Cdn$ using the exchange rate as of the date of the transaction.

Need a Tax Professional?

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.

Tax Calculators

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.

Use our Investment Income Tax Calculator to see the big difference in taxes for different types of investment income.

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

Revised: October 26, 2023