It’s that time of year that most of us run to your financial advisors or accountants and try to figure out how much we can save in taxes by contributing to our RRSP, RESPs or other forms of tax deferring vehicles provided by the government. However I always advise clients that it is possible to save taxes all year long by implementing any one of these following strategies:
i) Contact your payroll department or payroll administrator to review your TD1 form. The TD1 form or also known as the Personal Tax Credit Return Form is issued by both the federal and provincial government (i.e. there are two separate forms). The TD1 allows you to exempt yourself from paying tax if the total personable taxable income is less than the total TD1 claimed.
Instead of just claiming as single, take a look at last year’s tax return to see what you claimed. Will anything change this year? If you’re getting married, going back to school or having a baby you can get extra reductions to tax withholding requirements
ii) If there are significant changes in a particular taxation year such as making RRSP Contributions, borne childcare expenses or there are significant deductions this year such as moving expenses or large charitable deductions than ask your employer to fill a T1213-Request a reduction in tax withholdings. Once completed, it should be sent to the CRA and give your employer to reduce taxes at the source.
iii) A duly signed T2200- Declarations of Conditions of Employment. This form will list all the expenses to be reimbursed by the employer due to the nature of your occupation and are not a taxable benefit to the employee. Some examples include reimbursement of automobile expenses, travelling out of town for work, parking expenses in places other than your main purpose of employment etc.
The aforementioned strategies are very simple and easy to implement methods to reduce your taxes year-long and ensure that you’re not paying extra taxes to the government and receiving an interest free refund at the end of the taxation year.
Contact SRJ Chartered Accountants in Toronto or Mississauga to assist you with your tax filings. We can be reached at 416-898-4235 or firstname.lastname@example.org. We look forward to hearing from you!