𝗧𝗵𝗲 𝟱 𝗸𝗲𝘆 𝗶𝘁𝗲𝗺𝘀 𝘆𝗼𝘂 𝘀𝗵𝗼𝘂𝗹𝗱 𝗵𝗮𝘃𝗲 𝗿𝗲𝗰𝗲𝗶𝘃𝗲𝗱 𝗳𝗿𝗼𝗺 𝘆𝗼𝘂𝗿 𝗔𝗰𝗰𝗼𝘂𝗻𝘁𝗮𝗻𝘁 𝗮𝗳𝘁𝗲𝗿 𝘆𝗼𝘂𝗿 𝗧𝗮𝘅 𝗙𝗶𝗹𝗶𝗻𝗴.
Point 3: Received Tax Recommendations and a plan for your Tax Refund.
It`s one job to complete your tax filing for the current tax year but what are all the recommendations that you need to implement for the upcoming year.
You need to be made aware of what you should be doing.
𝐇𝐞𝐫𝐞 𝐚𝐫𝐞 𝟓 𝐞𝐱𝐚𝐦𝐩𝐥𝐞𝐬. 𝐓𝐡𝐞 𝐥𝐢𝐬𝐭 𝐜𝐨𝐮𝐥𝐝 𝐯𝐢𝐫𝐭𝐮𝐚𝐥𝐥𝐲 𝐛𝐞 𝐞𝐧𝐝𝐥𝐞𝐬𝐬: 𝐑𝐑𝐒𝐏 𝐀𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧𝐬:
If both spouses are saving into an RRSP however they are in different tax brackets you should consider allocating the full RRSP to the higher income earner.
𝐂𝐡𝐢𝐥𝐝𝐜𝐚𝐫𝐞: Two key items here.
The lower-income earner must claim childcare and two, you can only claim childcare against T4 income. If you have a self-employed spouse taking Dividend Income you much make sure that the higher income earner is the Dividend income-earning spouse.
If the lower-income earner is taking 100% you would not be able to claim any child care expense.
𝐇𝐞𝐫𝐞 𝐢𝐬 𝐭𝐡𝐞 𝐒𝐨𝐥𝐮𝐭𝐢𝐨𝐧:
Either increase the Dividend Income Spouses income or change the income type to T4 income.
𝐋𝐚𝐛𝐨𝐮𝐫 𝐅𝐮𝐧𝐝𝐬 𝐚𝐧𝐝 𝐏𝐫𝐨𝐯𝐢𝐧𝐜𝐢𝐚𝐥 𝐭𝐚𝐱:
You may have bought a Labor Fund and then later realized you did not pay any or only paid some provincial tax. If this is the case, you would not have fully be granted the Credits you should have been entitled to if your income was higher.
You need to be made aware that this has occurred and decided if you still want the extra tax break that Labour Funds provide or if you would prefer to invest in a different vehicle.
The first $200 of Charitable Donation is taxed at a lower amount of 15% as opposed to 29% above $200. You can also carry forward donations.
The discussion should be had to confirm if you wish to claim the amount right away to get your tax break now or if you wish to carry forward to accumulate.
Although not huge amounts here but good to be noted.
𝐔𝐬𝐢𝐧𝐠 𝐑𝐑𝐒𝐏 𝐂𝐨𝐧𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧𝐬:
If there are RRSP contributions they are usually utilized. You do not have to use all the RRSP contributions you have contributed. Before claiming all, the conversation should be had to confirm your tax bracket today versus what it might be in the future.
Do you want the tax break today even if it`s lower or It`s not the accountant's job to plan where to place your tax refund however that is where we can excel at planning with our clients?
For many of our clients, we have a plan in place for the refund. Prior to working with us, most clients just used the refund and it got lost in the mix of monthly cash flow.
After a plan is in place we know how much will be placed down on your mortgage as a prepayment or other debt along with how much might be allocated towards the current year RRSP, Education fund or TFSA etc.
So just a few ideas of what kids of Recommendation and Discussion should be had with your Accountant after your tax filing is completed.