Tax Time . . . Panic Time?
Do you panic every year when your taxes come due? Does it always seem like you owe the taxman at the end of the year? It doesn't have to be that way. A few small changes to how you handle your taxes can make this time of year a little less bleak, even with the weather . . .
1) Deduct more
This is the easiest way to be sure you have paid enough money and won't owe taxes at the end of the year. Just contribute more from each pay cheque. You probably won't even notice the little bit extra that gets deducted for your taxes each month, but it will be a big relief at tax time. And, you may even get money back for a change.
2) Think RRSPs
Registered Retirement Savings Plans (RRSPs) are a great choice to lower your taxes, whether you buy them for yourself or as a spousal RRSP. Either way, your tax burden drops right away. And you are eligible for spousal RRSPs even if you live common law. Buying RRSPs may seem like a big purchase, but there are ways to generate the cash to buy them, even if you have poor credit and cannot get a traditional bank loan for them.
3) Deduct your mortgage interest
There are a few cases where you can use the interest you pay on your mortgage to lower your taxes. If you work at home, and maintain a home office, you can deduct that amount of space from the interest you pay on your mortgage. So if your office takes up 10 percent of your home, you can deduct 10% of the interest you pay from your mortgage. There are other circumstances where you can make mortgage interest deductions. For example, do you rent out a room in your home? Or do you have rental property that you financed through the bank? What about vacation property? In these cases, you may be able to deduct some of the interest you pay for the mortgages that you carry on these purchases. Your bank can tell you how, or call Revenue Canada and they will explain it to you-it's not as tough as you might think.
4) Giving it away just might pay
Don't believe it? Well, if you gift registered charities with the things you have sitting around that you don't use (check out your garage) you may qualify for a 29 percent tax credit. Let's say you have a second car that you just cannot sell, or old furniture you no longer use. You can donate those things to your local church or your favorite charity. They issue you a tax receipt-say for $1000-and that translates into a $290 tax credit for you!
Your current vehicle may help you gain a little extra cash around tax time, too.
5) Car title loans
Car title loans are a little known way to generate extra money, especially if you have poor credit and trouble getting loans. If you own your vehicle, and it is less than 8 years old, you can re-finance it to buy those RRSPs, for example, or help pay back the taxman. It's easy to do, helps re-build your bad credit, and can ease the burden at tax time.
So don't let tax time add to the winter blahs. You have more options than you think.
1) Deduct more
This is the easiest way to be sure you have paid enough money and won't owe taxes at the end of the year. Just contribute more from each pay cheque. You probably won't even notice the little bit extra that gets deducted for your taxes each month, but it will be a big relief at tax time. And, you may even get money back for a change.
2) Think RRSPs
Registered Retirement Savings Plans (RRSPs) are a great choice to lower your taxes, whether you buy them for yourself or as a spousal RRSP. Either way, your tax burden drops right away. And you are eligible for spousal RRSPs even if you live common law. Buying RRSPs may seem like a big purchase, but there are ways to generate the cash to buy them, even if you have poor credit and cannot get a traditional bank loan for them.
3) Deduct your mortgage interest
There are a few cases where you can use the interest you pay on your mortgage to lower your taxes. If you work at home, and maintain a home office, you can deduct that amount of space from the interest you pay on your mortgage. So if your office takes up 10 percent of your home, you can deduct 10% of the interest you pay from your mortgage. There are other circumstances where you can make mortgage interest deductions. For example, do you rent out a room in your home? Or do you have rental property that you financed through the bank? What about vacation property? In these cases, you may be able to deduct some of the interest you pay for the mortgages that you carry on these purchases. Your bank can tell you how, or call Revenue Canada and they will explain it to you-it's not as tough as you might think.
4) Giving it away just might pay
Don't believe it? Well, if you gift registered charities with the things you have sitting around that you don't use (check out your garage) you may qualify for a 29 percent tax credit. Let's say you have a second car that you just cannot sell, or old furniture you no longer use. You can donate those things to your local church or your favorite charity. They issue you a tax receipt-say for $1000-and that translates into a $290 tax credit for you!
Your current vehicle may help you gain a little extra cash around tax time, too.
5) Car title loans
Car title loans are a little known way to generate extra money, especially if you have poor credit and trouble getting loans. If you own your vehicle, and it is less than 8 years old, you can re-finance it to buy those RRSPs, for example, or help pay back the taxman. It's easy to do, helps re-build your bad credit, and can ease the burden at tax time.
So don't let tax time add to the winter blahs. You have more options than you think.
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