No one likes taxes, except for the few people who voluntarily pay more than they should to help out cash-strapped governments. But they are a necessity since someone has to pay for the services that we all enjoy or complain about. That said, there’s no reason we shouldn’t use every available deduction and tax credit and that means filing a return even if you don’t have to pay taxes. We’re looking specifically at you, students with little or no income, especially if your parents are using your tuition tax credit, which can be worth up to $5,000 per child. But if you worked at all, filing a return starts building up room in your RSP, something that might come in handy later on, much later on granted.
For the rest of us working stiffs, the most important thing to keep track of are changes. “Things often get missed when there’s change, either in the tax department or in your family’s life,” says Caroline Battista, a senior tax analyst at H&R Block in Canada. For example, for the 2014 tax year, the government has introduced a family tax cut, an enhanced Universal Child Care Benefit and doubled the Children’s Fitness Credit to $1,000 per child. An H&R Block survey found that only 15% thought the new tax changes would impact their returns, but, for example, just 36% of Canadians were even aware of the improved fitness credit.
You may also have got married or divorced, had a child, taken on an aging parent as a dependent, moved, changed jobs — all of which may impact the amount of money you owe or, hopefully, get back from the government.
The Basics
➭ File a return. This seems obvious, but low-income earners, those who don’t make enough to pay taxes, often skip this step. But it makes sense to file since you might qualify for the GST credit.
➭ A good tax return should end with the number zero. “It’s not meant to bankrupt you in April and it’s not meant to be a huge savings,” H&R Block’s Caroline Battista says. If you aren’t zeroing out, revisit your federal and provincial/territorial TD1 forms that are filed with your employer. Perhaps something has changed in your life that isn’t reflected on those forms and your employer is taking off too much or too little for tax purposes.
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