Winter blues – having a huge tax bill can make you blue too! You can be proactive with your taxes !!
Prepay your taxes with instalments throughout the year – CRA loves receiving your tax dollars sooner than later – you can avoid penalties & interest as well. When you get your tax refund you now have money to take that long deserved holiday to your favourite vacation spot.
Prepare a pretax return to find out where you are at with your taxes. You should have an idea what your income will be for the year long before the end of the year. You can use this estimate and do a tax return without any of the credits you might normally receive, you will probably have a pretty good idea what your taxes are for the year.
For T4 income earners, purchase RRSP’s before Feb 28th to reduce your taxes payable. Unfortunately when you are an employee RRSP’s are the only way you can save on your taxes payable. Don’t with draw your RRSP contributions unless your income had decreased significantly or you will have to pay taxes. The best time to withdraw RRSP contributions is when you have no other source of income.
Always submit a tax return, you maybe entitle to tax credit you don’t know about.