Most people know that April 30 is the tax filing deadline for individual taxpayers, and by now you should have received all of your slips to finish the task, including T3s and T5s. But the big question, in terms of maximizing all your benefits is this: What are you going to do with your tax refund?
There are lots of great ways to leverage this windfall, which many people use as a type of forced savings. This is not smart, by the way, as a tax refund really represents an interest-free loan of your hard-earned money to the government. Much better to pay only the correct amount of tax by adjusting your tax withholdings or quarterly instalments to accurately reflect both your income, your deductions and your available non-refundable tax credits. Do so by completing both form TD1 Personal Tax Credit Return (federal and provincial), and Form T1213, Request to Reduce Tax Deductions at Source.
Here are six tax efficient ideas for "leveraging up" your tax refund and building wealth:
There are many other options, like paying down your mortgage, for example, and investing in a new home, both of which contribute to potential tax free gains on the sale of that asset.
However, if you must, buy the flat screen TV... but think about this as you do it: the trick to mastering your money is to take control of the first dollar you earn, hold on to it the longest through wise investment choices, and then, pass along the most to yourself in your retirement and your heirs at death.
Sure, it's difficult to be an expert at filing your income tax return – something you do only once a year – but once again Canada's most trusted tax author, Evelyn Jacks has come to the rescue with over 200 quick and easy Essential Tax Facts you need to know to get the job done and to your best advantage in 2011 and beyond. Click here to order the book.
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