Avoid overpaying the taxman
(NC) A common goal for just about everyone is to pay less tax. But missed slips or overlooked deductions can result in a larger tax bill than necessary.
“In my experience, many people make small mistakes that end up costing them money,” says Caroline Battista, a tax analyst at H&R Block. “Some people don't file because they earn little or no income, but there are benefits like the GST/HST credit that are paid based on your last tax return filed.”
Battista recommends collecting all of your tax information in one place and researching credits and deductions that can be claimed, including RRSP contributions, employment expenses, charitable donations, tuition and medical expenses.
The Disability Tax Credit is often overlooked. Most people decide they do not qualify, but Battista says conditions like diabetes and arthritis may be valid claims so it could be worth asking a doctor to review the criteria. Eligible taxpayers could claim a $7,697 federal amount, plus provincial credits.
Married and common-law spouses can pool charitable donations and medical expenses to maximize tax savings.
“If you are missing receipts or have misplaced them, it is worth the extra time to track them down,” says Battista. “Every piece of paper represents a little less tax to pay.”
While receiving a tax refund is nice, it is actually the money that you have overpaid the government over the course of the year. File promptly, because the government doesn't pay interest on money owed.
If you missed credits or deductions, you can go back and adjust up to 10 years' worth of tax returns. It may be a good idea to have a tax professional review previous returns if you are unsure of your calculations.
“Taxes are a major expense for many households, so it is worth taking the time to make sure it is correct,” says Battista. “No one wants to pay more taxes than they have to, so do your homework. Don't leave money on the table.”
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