Don’t Wait Till Tax Season – Prep for Your Taxes Now!

Are you frustrated during tax season trying to get all your receipts together? Your tax return can only be as organized and accurate as you prepare for it whether you are filing it yourself or with a professional. Here is what you can do now to get organized and make tax season easier.

1. Medical Expenses

Gather your receipts for medical expenses such as eyeglasses, prescription drugs, and medical insurance premiums paid. Also, if you have medical benefits from work, check your pay-stubs for any medical premiums deducted from your pay. These are eligible for the medical expense tax credit.

2. RRSP Slips

Do you have an RRSP? If so, collect your RRSP contribution slips for the current tax year. Your financial institution should issue these slips by no later than February 29, 2016, for the previous year. RRSP contributions are tax deductible from your income.

3. Gather All of Your Income Slips

The most common types of income slips that you should receive are:

• A T4 slip for salary paid to you and payroll taxes deduct during the year
• A T5 slip for interest and dividends paid to you on investments that you own
• A T3 slip for distributions you received from mutual funds that you own
• And if you are self-employed, make sure you tally up all sales and expenses made during the year to report on your tax return.

4. Check Your Property Tax Assessment for Your Rental Property

Do you own a rental property? Property taxes paid are deductible from rental income. There’s an Annual Statement that’s sent by your local property tax department, which you should receive by February for the previous year’s property taxes assessed and paid. If your bank pays for property taxes on your behalf, you can request this annual statement from them.

5. Home Expenses (If You Work From Home)

Do you work from a home office? Collect your home office receipts, which include property taxes, mortgage interest, utilities, repairs, insurance, and condo fees. The maximum percentage of these expenses that you can claim is determined by the size of your home office versus the size of your home. For example, if your home is 2,000 square feet large, and your home office measures 200 square feet, you can deduct 10%.

So Here’s the Tip:

Don’t panic during tax season. Collect all your receipts from the start of the year and compile the required paperwork for your tax return as you keep receiving it. If you are missing information, you will not get your full tax refund.

ABOUT THE AUTHOR

ALLAN MADAN

CPA, CA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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