Year-end tax tips
It's not income tax filing time yet, so why should you think about taxes?
The fact is there are steps you can take to make the most of your 2011 income that will need to be done before year end if you're to gain the benefits.
Tax rules are written to provide maximum fairness and benefit to working Canadians and deductions and credits are there for a reason, so making the most of them is just good sense.
So read on for a list of things to do now before ringing in the New Year.
For the self-employed
If you are self-employed, take a look at your deductible expenses and make sure you've spent the maximum for the calendar year. Gather your receipts now; it may even be a good idea to visit your accountant with your last pay stub and your receipts in hand to get an idea of where you stand at year's end.
Bert Mulder, a certified general accountant in Sherwood Park, Alta., suggests you take a hard look at the big ticket items you might need for work. For example, if you're considering leasing or buying a vehicle, he says, "If you [buy a vehicle] before the end of the year, a purchase will give you a better tax write-off for 2011. If you wait till the New Year, a lease will give you the better tax break."
If you are a student enrolled in a full-time program, have a look at your textbook budget. By now you'll know what classes you'll be taking in January and if you haven't spent the full $65 per month the Canada Revenue Agency (or CRA) allows as a deductible for textbooks, buy one of your books this month and claim that money. It may not be much, but it's worth a bus pass.
As for bus passes, Dawn Eagle at Toronto's Downtown H&R Block office deals with all kinds of tax returns, including student returns. Eagle has this advice about transit passes, which are a non-refundable credit if you owe tax: "Assemble them, collect them and remember they all need to be signed." The CRA will not accept passes if they're unsigned by the claimant.