Wednesday, March 21, 2012

Tips for reducing tax season stress

Embrace Tax Season by Doing it Yourself

Have you filed your taxes yet? April 30th may seem far away, but it’ll be here before you know it. And while your initial reaction might be to stress over what you need to do next to file on time, there’s no better way to take control than by doing it yourself and filing using tax software.

To that end, here are a few tips to keep in mind when you’re filing to help you meet the deadline:

Don’t miss available tax credits: There are hundreds of tax credits offered to Canadians every year. The reality is, few people in Canada know about every possible deduction. And why would you? Thankfully, tax software, like Intuit’s TurboTax, takes the guesswork out by helping you identify tax credits available to you, and, of course, does all the work for you.

With that in mind, here are a few that you should be aware of that can still make a big difference come refund time:

• Remember the Children’s Fitness Credit that was introduced back in 2007? Well this year the government has introduced the Children’s Arts Tax Credit. This allows parents to claim up to $500 in eligible fees for qualifying arts programs, including children attending fine arts, music, and performing arts classes, as well as outdoor wilderness training or foreign language lessons.

• Another new credit available this year is the Volunteer Firefighter Tax Credit, worth $450. And since there are over 85,000 volunteer firefighters in Canada, there are many that can take advantage!

• Home ownership is a big step. Since 2009, the First Time Home Buyers Tax Credit offers a rebate of up to $750 to anyone who has bought their first home.

• The GST/HST New Housing Rebate helps offset the federal taxes paid on the purchase of a newly constructed or significantly renovated home valued at less than $450,000. Ontario and B.C. residents can take advantage of provincial credits to help with the HST they’ll pay.

Use the right tool for the job - tax software: Tax software is designed to help Canadians file taxes quickly and easily. Most offer step-by-step guidance, and some, like TurboTax, guarantee 100 per cent accuracy and offer free expert help if you have questions about your tax situation, so you can “phone a friend,” who happens to be a tax expert, if you have questions.

Plan ahead: It’s time to admit that your last-minute approach isn’t working. Tax planning should be a year-round personal finance strategy. Be it an accordion file or a digital spreadsheet, file receipts and documents throughout the year for easy access when taxes are due. Finally, inject some strategy into your spending: sign the kids up for summer activities that qualify for the children’s fitness tax credit and donate extra cash to CRA-accredited charities. Or open a Tax-Free Savings Account (TFSA) to save up to $5,000 a year with no tax deductions. Careful planning will pay off at tax time.

For more information, visit

By Richard McCann, Tax Specialist, Intuit Canada

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