The Citizen, 2012-02-02, Page 11THE CITIZEN, THURSDAY, FEBRUARY 2, 2012. PAGE 11.
NC –The holiday decorations are
all packed away, the New Year’s
resolutions made, and spring is
around the corner. Before you know
it, tax season will be here. Before
you start filing your taxes, here are
10 ways that may help you reduce
your tax bill and may even land you
a refund.
INDIVIDUALS
1. Plan ahead – Make sure to
gather your receipts and NETFILE
code, register for My Account, and
sign up for direct deposit before
April 30. Submitting your income
tax and benefit return before the tax-
filing deadline means you can avoid
having to pay late-filing penalties.
2. Tax-free savings account – A
tax-free savings account (TFSA) is
one great way to save money, since
you don’t pay tax on any income
you earn from investments in your
TFSA.
3. Registered retirement savings
plan – Any income you earn in a
registered retirement savings plan
(RRSP) is exempt from tax, as long
as the funds stay in the plan. RRSPs
help you save for your retirement
and get a break at tax time too.
4. Public transit tax credit – If you
or someone in your family is a
regular user of public transit then
you may be able to claim a non-
refundable tax credit based on the
cost of eligible transit passes.
5. Pension income splitting – If
you are receiving income from a
pension, you can split up to 50 per
cent of eligible pension income with
your spouse or common-law partner
to reduce the taxes you pay.
6. Students – Are you still in
school? Students can claim the
tuition, education and textbook
amounts. Have you graduated
recently? You may be eligible to
claim the interest you paid on your
student loans.
7. Child care expenses – For those
who have children, you may be able
to claim child care expenses that you
or your spouse or common-law
partner paid so that either of you
could work, do research or go to
school.
8. Home buyer’s tax credit – If
you're a first-time home buyer you
may be eligible to claim $5,000 on
the purchase of your new
home, which can save you up to
$750.
SELF-EMPLOYED
9. Hiring an apprentice – Did your
business employ an apprentice? A
salary paid to an employee
registered in a prescribed trade in
the first two years of his or her
apprenticeship contract qualifies for
a non-refundable tax credit for the
employer.
10. Creating child care spaces –
Did your business (which is not
mainly a child care services
business) create licensed child care
spaces for the children of your
employees? If so, you may be
eligible for an investment tax credit
for the child care spaces you
created.
More tips on how best to prepare
your 2011 income tax and benefit
return can be found online at
www.cra.gc.ca/getready
NC –Are you thinking about
moving in together? This decision
might be an opportunity to improve
your financial situation by
combining your income and
expenses and doing some long-term
planning.
• Advantages of a relationship:
Being a couple is bound to have an
impact on your income and
expenses. Living under the same
roof is much less expensive than
living alone. You can save a great
deal on the costs of electricity,
heating, telephone, Internet,
groceries and automobiles.
• Have a frank discussion:
Before you combine your finances,
it is important to talk to your future
spouse to get a better idea of your
spending habits, income, debts and
savings. Discuss the possibility of
opening joint accounts (chequing or
savings) to cover your essential
household expenses or to save
money. You might also choose to
keep a personal account for your
other expenses.
Whatever choices you make, you
should agree on how your joint
accounts are to be used and the
amounts you will each deposit in
them. Also take the time to assess
your banking habits and make sure
that you have the bank accounts that
meet your needs. It could help you
save money.
• Seek a balanced approach:
Once you have agreed on the
lifestyle you would like to have, you
can draw up your budget to obtain
an overview of your total income,
your essential and non-essential
expenses and your ability to save.
You may not particularly enjoy
drawing up a budget, but simply
setting objectives, such as
purchasing a house or condo and
saving for your children's education
if planning to have a family, will
motivate you to draw up your budget
and, more importantly, to stick to it.
More information about how to
draw up a budget and choose a
suitable bank account is available
online on the Financial Consumer
Agency of Canada (FCAC) website
at fcac.gc.ca
The advantages
of living together
Knowledge of tax breaks
can make all the difference
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