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Taxes

Ways To Reduce Your Taxes

Canadians pay a lot of income tax and any way that we can find to reduce our tax bill is a major plus. Yahoo! Finance has a really great article titled “Slash Your Taxes” that I would recommend you read before filing your taxes this year.

The majority of the tips discussed in the article focus on how spouses can effectively split their incomes in order to reduce the taxes owing for the highest wage earner. Examples include using a spousal RSP, having the lower wage earner opening sole-owned investments, and lending money to the lower wage earner spouse so they can invest.

March 18, 2011

Taxes

Top 7 Ways To Trigger A CRA Review

Forget a T slip: You are required to report all your income. The Canada Revenue Agency (CRA) receives copies of all the T slips issued, so if you forget, misplace or hide a T slip, it will inevitably be uncovered by their matching program and result in a reassessment. Do this twice in a two-year period and you will be looking at substantial penalties.

Your business looks like a hobby: The CRA does not expect every new enterprise to make a profit their first few years in business. However, you cannot create a business for the purpose of creating losses. There must be some reasonable expectation of profit in future years. If you claim year after year of losses, you may be answering questions about your business plan from a CRA auditor.

March 16, 2011

Taxes

What Is In Your Tax Survival Kit?

Tips to make preparing your tax return easy:

1. Keep it together: It may seem simple but as your slips and receipts arrive, pick one spot to keep all your paperwork together. Some suggestions: envelope, shoe box, plastic bag or a really big clip.

2. Search and retrieve: A taxpayer is responsible for reporting their income during the tax year even if they don?t receive all the right paperwork. If you are missing a T4 or other income slip, do your best to track it down before you file. If not, provide the best estimate of your income and report it.

March 5, 2011

Taxes

Three Out Of Four Canadians Fail The H&R Block Tax Quiz

Lack of tax knowledge could mean missed credits and money left on the table

Canadians may be leaving money on the table at tax time because they do not have a good understanding of what can be claimed on their tax returns. Less than 25 per cent of Canadians provided the right answers when asked questions about their tax returns, according toa recent survey by Leger Marketing for H&R Block Canada.

“No matter how you decide to prepare your tax return, you need an understanding of which credits and deductions you can claim and how to report them accurately,” says Cleo Hamel, Senior Tax Analyst, H&R Block Canada. “No one wants to pay the government more tax than absolutely necessary, so Canadians should make sure their return includes all their deductions and credits.”

March 1, 2011

Taxes

What Is A Tax Write Off?

Most of us have heard of a tax write off or of writing off an expense, but what exactly does that mean? It does not mean that you get that good or service for free. Instead, it means that the value of that good or service is deducted from your taxable income.

People who own their own business will be able to advantage of many tax write offs. Any time that they purchase business equipment or pay for a service that relates to their business, they get to write off that expense.

February 11, 2011

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