Setting up an organized approach now will help next year's tax filing go more smoothly
Whether you file your own taxes or have them done by a professional, an organized approach can save you time and money. Here are some tips for establishing an effective tax-management infrastructure.
Establish a filing system
If you don't already have an effective personal filing system, spend a few moments now to set one up. For example, create folders for investment statements, deductible business expenses, and expenses that qualify for tax credits - such as charitable donations, transit passes, or children's activities that qualify for the children's physical fitness credit. When you receive your receipts or statements, review them for accuracy and then file them away.
Automate your contributions
Consider setting up a regular investment plan for your Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA). Your contributions have longer to compound tax-free and you don't have to worry about coming up with a large lump sum once a year.
Reduce "at-source" deductions
If you contribute regularly to your RRSP or pay child care costs, you can apply for a reduction in the taxes that are deducted from your paycheque. You'll need to file form T1213 with the Canada Revenue Agency. Quebec residents also need to file form TP1016 with Revenu Quebec.
Put your refund to work
If you got a refund last year, be sure to make the most of it. Contributing to your RRSP or TFSA are both excellent choices, for example. Ask a CIBC advisor for additional ideas.