Tax time is drawing near in Canada.
Various receipts and forms are being forwarded to Canadians with T4 slips expected to in workers hands by the end of this month.
The deadline to file is May 1.
Gerry Vittoratos, a tax specialist with UFile, suggests doing your taxes as soon as you have your T-4s and other receipts on hand.
“There’s no reason to wait because it’s time value of money. A dollar today is worth more than a dollar later on. You don’t want this money to be in the government’s hands,” says Vittoratos.
“You want this money to be in your pocket doing something more productive. If you have, for example, debts, especially consumer debt, there’s no reason to wait till the end of April to collect your refund and continue and pay another month of interest on your consumer debt. Simply get your refund, pay off your consumer debt much quicker, and you can save on the interest.”
Filing before the deadline also ensures other credits, such as the GST rebate and Child Benefit credit, are not interrupted and get you in a timely manner.
There are some new things to be aware.
One focuses on housing. It is called the First Home Savings Account.
“The FHSA is a new tax-sheltered account that will allow you to save money for the purchase of a first home. So, for example, you’re putting it into this account, which is similar to an RRSP and TFSA (Tax-Free Savings Account). It actually shares characteristics of both.
Contributions to the FHSA are deductible. The withdrawal for use on a first home is tax-free.
“It is a limit of $8,000 per year that you can put in up to a lifetime limit of $40,000,” says Vittoratos.
Other benefits include the new Canada Dental Benefit. If you have fees paid for a child under the age of 12 can be applied to the benefit as long as your income does not exceed $90,000.
“The benefit is a sliding scale depending on the income that you get. The government essentially reimburses a portion of the dental fees that you incur for your child.”
A benefit for Ontario residents is the Staycation credit.
“Staycation basically is you took a vacation within the province, you’re a resident of Ontario, and you took a vacation within the province. If you paid any fees to a hotel, for example, a motel, a lodge, or a vacation rental property, then you can actually claim those fees as an expense that is eligible for this credit.”
The tax brackets have also changed.
Usually, the government will always index those thresholds to inflation. Of course, knowing what inflation is today, the government really increased those thresholds substantially between those tax rates. So it’s likely that even if you made more money, you might still stay within your existing tax bracket and not jump to another one.”
Vittoratos says it is possible that with those changing tax brackets, even if you made more money last year, any tax rebate from last year could be greater.