5 Tips to Start Saving on Taxes
Although no one likes to pay taxes, there are many ways to make some savings with a little planning and the deductions available. However, do not wait for the tax season to arrive and start planning today. The sooner the better !
Planning throughout the year will allow you to adopt good tax strategies and avoid a lack of time when facing the tax season.
1. Get Informed
Keep yourself informed of new and outdated deductions. You can find this type of information on provincial and federal government websites. Of course, a qualified accountant will be able to guide you and will know the intricacies of each deduction.
2. Contribute to Your RRSPs
It is possible to contribute to your registered retirement savings plan (RRSP) until age 71. The money deposited will be deducted from your taxable income on your tax return. You may even be eligible for a tax refund.
3. Deduct Your Expenses
As a self-employed person, you can deduct expenses incurred for your practice. This could include reporting your transportation costs, the cost of your accommodation or any other necessary equipment such as software and other tools you use in the course of your work.
4. Report the Interest on Your Student Loan
It is possible to enter the amount corresponding to the interest on your student loan on your tax return in order to obtain a tax credit. You may then decide to carry this amount forward to the next year if you do not pay tax.
5. Keep Your Receipts as Medical Expenses
Many forget that contact lenses, glasses or the expenses of a psychologist or other health professional may be eligible. Prescription drugs, ambulance transportation costs or your drug insurance premiums are also tax deductible. All you have to do is ask!
To save taxes, it is strongly suggested to use a qualified accountant who is a member of the Chartered Professional Accountants of Quebec (CPA) to benefit from their advice and to avoid any error in your income tax return.
A 3 year old false statement could be expensive and the interest could quickly add up, so it is best to have a professional do it.
