How to enjoy tax time?

by | May 1, 2014 | Tax Planning & Preparation

If you think the words ‘enjoy tax time’ are an oxymoron, maybe we can help change that. Why not! We’re all about life’s possibilities here at Fraser & Partners. After all, the bright side of having to pay tax is that you have taxable income to report.

We’re in good spirits as we complete another tax filing season. We’re happy to report it was a good one! Our tax team did a stellar job completing over 250 tax returns and uncovering plenty of opportunities for deductions. Because 2013 was a strong year in the financial markets, there were a few more cheques forwarded to Canada Revenue Agency than usual. It’s the only time of year when you may wish you hadn’t made money.

Many thanks to the tax team for their hard work.

James Zuzanski: With over 10 years of experience as part of the F&P Tax Service,  this year James served as team leader, kept the process rolling smoothly, answered your questions, and also prepared and filed returns.

Jennifer Ostrowski: Our document scanner and support person extraordinaire!

Moby Christoffersen: As an advisor, Moby rolled up his sleeves and approached taxes from a planning perspective. He was a great asset to the team, helping to get the job done.

Angela Hilland: The newest member of our tax team and an outstanding addition, Angela prepared countless returns, answered questions, and provided perspective from a CGA standpoint.

Jim Anderson: Last but definitely not least, Jim is our final step in quality control. Jim has been applying his accounting expertise to review our client’s tax returns every year since 1995.

Filing your tax return is a labour-intensive activity. In some ways, it is a report card on your financial success for the year. We want to ensure that you take advantage of all the provisions of the Canada Income Tax Act so you pay your fair share but not a dollar more. We’ll continue to focus on tax efficiency in planning your investments, sources of income, and the structure of your estate. We’ll continue to look for ways to help you keep on track with resources such as your go-to tax envelope, online checklists, leading-edge software, and knowledgeable people. Your part of the equation is just as important.

Here are some considerations for next year to make filing your tax return an enjoyable experience.

  1. RRSP withdrawals will show up on your tax bill. If you decide to draw money out of your RRSP, you will be taxed at the time you make the withdrawal. The amount of tax withheld at source may not be sufficient to cover the actual tax triggered by the withdrawal. You may owe an additional amount when you file your tax return the following April. Make sure you prepare for this so you’re not surprised at tax time.RRSP Withdrawl Taxes*Source: Canada Revenue Agency.
  2. Make tax-efficient decisions throughout the year and see the results at the end. These decisions may relate to RRSPs, TFSAs, spousal loans, charitable donations, corporate class investment funds vs. mutual fund trusts, family trusts, ownership of assets, and timing of the sale of assets (cottage, business, collectibles, investments), to name a few of the more common considerations.
  3. If you are self-employed, get disciplined about tracking your expenses so you can claim all of the deductions to which you’re entitled. Every receipt makes a difference and they add up at the end of the year. Make sure you have a system in place to capture your expenses. There are lots of user-friendly accounting packages available online and reasonably priced. Most are accessible from your mobile device. There are also mileage trackers that come in the form of apps for your phone to make tracking your vehicle expenses easier than ever.
  4. Use your F&P Go-To Tax Envelope throughout the year so you know exactly where to put documents that will be required for your taxes. Make sure your notice of assessment, property tax receipt (if self-employed), and other important documents find their way into your go-to envelope to reduce stress at tax time.
  5. Pay your installments on time (if required) and get into the habit of filing your return before the due date. The interest rate charged on taxes owing to CRA is 5% (4 percentage points above the prescribed interest rate, which currently is 1%).
  6. Communicate with your advisor. Whether or not we’re preparing your tax return or working with your existing accountant, it’s satisfying to explore strategies for making the most of your resources and minimizing your tax bill.

Looking at the big picture, our tax dollars fund many things that make our daily living more comfortable and enjoyable enabling us to live our Life Aligned™ and grateful to be living in Canada. Paying our fair share of taxes is part of this. Now, if only our fair share would go to filling those potholes!

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