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Stay On Track of Holiday Spending

With only 8 weeks left for holiday gift buying, shoppers everywhere are flooding the stores looking for that perfect gift. If you’re like me, you start each holiday season with the best intentions by making a list that you swear you’re going to stick to. Procrastination and busy schedules however keep us from sticking to our holiday shopping goals and we resort to last minute purchases that push our budgets over the edge.  If you’ve created a budget for yourself throughout the year and want to stay on track of your holiday spending you can do it with a little planning and these five helpful tips:

 

  1. SETTING LIMITS ON HOLIDAY SPENDING

 

Yes – we all want to buy our friends and family gifts they’ll really love but that doesn’t mean breaking the bank. Give your credit cards and bank balance a break by setting a limit to what you can spend. Create a mini holiday budget based on your household budget.  If you don’t have a budget in place,  apps like Mint and You Need A Budget are a great place to get started and help you determine what you can afford.

 

  1. MAKE A LIST AND CHECK IT TWICE

 

Yes – the mail carrier is a nice guy cause and the security guard at work always has a smile for you but that doesn’t mean they have to be on your gift buying list.  You’re not Santa Claus.  You have a finite budget and can only really afford to buy gifts for those individuals you’re really close to.  If you have more than 7 names on your list do some editing and cut it down to 5. You can still give to other people in your life but it doesn’t have to cost a lot of money. With a little imagination you can show people you care about them without breaking the bank.  The holidays are about spending time with friends and family not about spending.

 

  1. SPEND BASED ON WHAT YOU CAN AFFORD

 

We all have that wealthy aunt or sibling who outdoes everyone every year with their gift giving. But just because they are in a financial position to purchase expensive gifts doesn’t mean you are. Keep your shopping to items you can afford and that fit your own finances. After all, it isn’t the gift that matters but the thought. Keeping your cash flow positive at this time of the year will have it’s rewards in the new year when the credit card bills start to roll in.

 

  1. STARTING EARLY WILL ELIMINATE IMPULSE BUYS

 

Search the internet for sales and coupons on items you’re looking to buy.  Online shopping is a great way to avoid the last minute shopping craze in crowded malls and you can do it from anywhere and at anytime. Before you shop in local stores, comb through the coupons you received in your mailbox before hitting the mall. These tactics will not only help you stay on track but will make gift buying easier.

 

  1. GIFT OUTSIDE THE BOX

 

It’s not always about the size of the gift box or the price on the tag. Sometimes the best gift of all is your time. Think about all the people you’ve neglected over the year. Not because you want to but because you’re too busy or you don’t live close by. Spending time with friends and family in a meaningful way goes well beyond the holiday moment. A heartfelt gesture to your nana in the nursing home is a gift that will reward the gift giver and the recipient. Volunteering at a soup kitchen or homeless shelter are just a couple of ways you can make a difference without spending a cent.

 

SPENDING TIME – NOT MONEY

Lastly, remember that the holidays are a time to rejoice in the friends and family we have with us. You want to enjoy this time of the year not stress over how you’ll manage to pay your credit card bill when it arrives. Keep to your budget, give yourself time, get organized and you’ll be in a great financial position to start off the new year.

tax-preparation-services-canada

The Early Bird Catches the Worm when it comes to Tax Season

Don’t Delay, Start Your Taxes Today

Have you heard the expression, “the early bird catches the worm”? When it comes to filing your annual tax return, that’s no exception. Sure, a lot of people wait until April to file, but there are a lot of advantages getting started early and finishing long before the deadline.

This year, you can file your income tax return as of February 20th, and it’s never too early to get organized. Here are a few benefits to filing your taxes early.

8 Great Reasons to Start your 2016 Taxes Today

1. You’ll get your money back faster

If you’re eligible to receive a refund on your 2016 tax return, you’ll most definitely want to file early. The quicker you file, the faster you’ll get your money! And who doesn’t look forward to money in their pocket? You might use the money to pay off some debt, or maybe even take a vacation. Wouldn’t that be nice?

As an extra strategic perk, if you complete your taxes and you receive a refund, you can do some planning and use the money as an investment to put toward your RRSPs to offset your 2017 taxes. Filing early and receiving a refund can help change your mindset about tax season from feeling like a burden to something you can look forward to.

2. Filing early gives you the opportunity to create a payment plan

If you do owe money on your 2016 tax return–sorry!–by filing early you’ll still have lots of time before April 30th to create a payment plan. This can reduce interest and penalties on the balance you have to pay. On the other hand, if you wait until the last minute to complete your tax return, you might be left scrambling to submit your payment on time.

3. You’ll have plenty of time to review new tax rules & updates

Every year, there are changes made to the tax rules. When you get started on your taxes early, you’ll have the chance to familiarize yourself with how these changes might impact your bottom line. You can learn more about the 2016 tax filing changes and updates in this article.

4. You can be proactive about your financial planning

At TAXplan we encourage a tax planning lifestyle, so that you can be proactive about your financial future. Managing your income taxes plays an important role in your overall financial planning. By knowing your 2016 tax information earlier in the year, you can use that knowledge to make important decisions related to investments and RRSPs. Being proactive with your 2016 taxes will make your 2017 financial plan easier to execute.

Also, if you have more than one job or employer, filing early will help to ensure that the appropriate amount of taxes are being withheld based on your entire income level, not just the pay you receive from one individual employer. This will reduce the risk having a large balance owing on your 2017 income tax return–and nobody likes that kind of surprise!

5. You’ll have lots of time to communicate with your TAXpro

The professionals at TAXplan are here to help you, both during tax season and throughout the year. We’re available to answer your questions and make suggestions about how you can optimize your tax situation.

When you start thinking about your taxes early, you’ll have plenty of time to ask questions, get our response, and follow up with additional questions. That kind of thought process and correspondence definitely benefits from extra time. When you feel rushed with the looming pressure of the tax deadline creeping up, it’s hard to get focused on your thoughts and questions. Give yourself lots of time so that you have chance to get answers, mull over the information, and then follow up with additional questions as needed.

Don’t get stuck waiting in line at the 11th hour with questions you haven’t had a chance to ask. Connect with us early to guarantee that you have the information you need.

6. Get Set Up Online with the Canada Revenue Agency (CRA)

The CRA My Account online services have many different features that are useful when filing your tax return yourself. If you’re already set up with a user ID and password, that’s great; one less thing to do! However, if you haven’t used this service before, there’s a bit of a wait time to receive access to your online My Account. By getting started early on your income taxes, these small delays won’t affect you filing before the deadline.

On the other hand, we recommend the TAXplan app which gives you the benefits of working with a TAXpro, better accuracy and optimization than doing it yourself, and all at a fraction of the price of hiring an accountant.

7. Filing early helps to prevent identity theft

Not to be too paranoid, but there really are weird cases of identity theft out there. When you file early, you reduce the risk of a thief filing using your social insurance number since your return is already marked as complete. It may seem like a strange type of problem to encounter, but it’s becoming increasingly common. Unfortunately, identity theft is not the only fraud that can occur. Learn more about how to protect yourself with these great tips from the CRA.

8. Filing your taxes early gives you peace of mind

It really is as simple as that. Completing your taxes well before the deadline gives you one less thing to think about. The unknown can be very stressful. Not knowing how much you owe or how big of a refund you’ll be receiving leaves you in the dark. Avoid worry by starting your taxes today!

“Don’t put off until tomorrow what you can do today.” ― Benjamin Franklin

When you delay filing your taxes, you put yourself at risk of facing interest and penalties on any amounts owing and you might miss out on receiving important monthly payments that require your annual taxes to be complete. So with so many great reasons to file early, why put it off? Start today and reap the many benefits of filing early.

Do you have all of your documents in order? Try TAXplan’s convenient and stress-free tax preparation app. Correspond with a TAXpro using the convenience of the app to file your taxes. You’ll be able to check off one big item on your to-do list, and hopefully receive one big deposit in your bank account!

Make Note of these Important Tax Changes for 2017

Every year there are changes to the Canadian tax season. Do you know the 2017 updates? This year there are changes for families, interest, investments, and tax law so buckle up and we’ll review everything that you should be aware of for the 2017 tax season.

What’s New for Families?

If you’re responsible for your family’s taxes, you’ll want to know about the following benefits, deductions, and credits for the 2016 income tax year. What, more to think about? With kids and a million little things on the go, we’d like to remind you that, when you file your taxes with TAXplan, our TAXpros will take care of the details to ensure that your family doesn’t miss any applicable tax credits or deductions.

The Canada Child Benefit (CCB)

The Canada Child Tax Benefit (CCTB) came into effect on July 20th, 2016. It’s replaced the Universal child care benefit (UCCB) and National Child Benefit Supplement (NCBS), and is designed to help eligible families with the cost of raising kids under the age of 18.

The CCB is a tax-free monthly payment that’s calculated using the adjusted family net income from your previous year’s income tax return. You’re required to file annually to receive the benefit. If you haven’t filed your 2015 return, you may miss out on these payments if you’re eligible.

Children’s Fitness and Arts Tax Credits

Unfortunately, the children’s fitness tax credit has been reduced to $500 from $1,000, and the children’s arts tax credit has been reduced to $250 from $500. Sad but true, however the additional amount of $500 available to children eligible for the disability tax credit isn’t changing.

Important note: these amounts are refundable in 2016, however in 2017 and subsequent tax years, both credits have been removed. If this is confusing, don’t hesitate to connect with a TAXpro who will make sure that everything is optimized for your family.

Child Care Expenses

The maximum limit for child care expenses hasn’t changed for 2016. Here’s a brief overview of the deduction limits based on your child’s age at the end of the applicable tax year:

  • Children 6 years and under, you can deduct $8,000 annually;
  • Children between the ages of 7 and 15, you can deduct $5,000 annually; and
  • Children eligible for the disability tax credit have an annual limit of $11,000.

Family Tax Cut

The family tax cut, also known as the income splitting tax credit, has been eliminated for 2016 and subsequent tax years. This doesn’t apply to you if you receive a pension; you may still be able to reduce your taxes on eligible pension income by splitting with your spouse or common-law partner.

News for Interest and Investments

Take note of the following changes for investments and interest for your 2016 income tax year. Remember that when you file with TAXplan, our TAXpros will ensure that all of deductions and credits are accounted for and that your tax return is optimized for the best possible results.

Tax-Free Savings Account (TFSA)

It’s important to note that the annual TFSA dollar limit has been reduced in 2016 to $5,500.

Other Deductions

The minimum withdrawal amounts for the following funds and plans have not changed for 2016:

  • registered retirement income fund (RRIF)
  • registered pension plan (RPP)
  • pooled registered pension plan (PRPP)

For more information see Guide T4040, RRSPs and Other Registered Plans for Retirement.

Interest Paid on your Student Loans

Still paying off student loans? Here’s some good news. If you paid any interest on your student loan in 2016, you may be able to claim it. Follow this link to learn more or use the TAXplan app (free for students!*) and a TAXpro will take care of it for you.

Other News and Updates

Home Accessibility Tax Credit (HATC)

If you and your home qualify, you might be able to claim a non-refundable tax credit in 2016 for certain expenses paid to renovate your home. Review the home accessibility expenses information on the CRA website for all the details.

New Reporting Requirement on the Sale of your Principal Residence

In 2016 and going forward, you’ll need to report basic information regarding the sale of your principal residence. This information includes when you originally purchased the home, how much it was sold for, and the home address. You’re not required to pay capital gains on the sale of your principal residence if you didn’t use any part the home to earn money. Learn more about this important reporting requirement here.

Tax Credit for Educator School Supplies

Are you a teacher? If you’re an eligible educator, you may be able to receive a tax credit on qualifying teaching supplies bought throughout the tax year. It’s a step in the right direction. The 15% refundable tax credit is calculated on up to $1,000 in expenses. This tax credit is applicable to teachers and early childhood educators. Review the CRA publication to learn if you’re eligible.

Never Miss a Tax Credit

With so many changes to this year’s tax guidelines, we highly recommend that you entrust your 2016 online tax return to a professional. Consider TAXplan. We make your life easier by allowing you to submit your tax information in a convenient app for it to be processed, optimized, and filed by a professional. Click here to start now.

Mark your Calendar with these Important 2017 Tax Dates in Canada

Canadian tax season has arrived! Not feeling excited yet? Well maybe this post will start a little fire underneath you to get you ready to file your 2016 income tax return.

Before we get started, there have been cases of fraudulent phone calls and scam emails pretending to be from the Canadian Revenue Agency. They’re not. Be on guard. If you’re contacted by a source claiming to be the CRA, don’t reply before checking this information first.

2017 Income Taxes Deadline

The official due date for individuals to file is April 30th but because the 30th falls on a Sunday this year, you get an extra day. Your return and any amount owing are considered on time if postmarked by 11:59pm on May 1st, 2017. Not that we’re advising you to wait until the last minute. There are a lot of advantages to filing early!

April 30th, 2017 = May 1st, 2017

While the due date for the Canada Revenue Agency (CRA) isn’t until the first of May, you can file your tax return as soon as you have all of your tax slips and information available. It’s worth it to get a head start on the filing will avoid rushing at the last minute to submit your return.

Seriously, don’t delay filing! Late payment on taxes owing just means fees and penalties… And if you’re expecting money back this year, why not get your taxes in early and enjoy the extra cash back in your pocket? Exactly. Get started now.

Online filing is definitely the fastest and easiest ways to complete your return. You should check out our TAXplan App; it allows you to submit all of your information digitally and then a tax professional will optimize your information submit your taxes for you. Filing on time with TAXplan is an ideal way to minimize how much you have to pay, and maximize how much you’ll get back!

TAXplanning Tip: If you’re receiving cash back from your 2016 return, consider rolling that money right into an RRSP for 2017.

Self-Employed Deadline

If you or your spouse/common-law partner are self-employed, your tax timeline will be a bit different: June 15th, 2017. But keep in mind that any amount owing on your personal return is still due by 11:59 am on May 1st, 2017.

Also, depending on your annual income, you may have to make tax installments throughout the year.

Penalty Warning: Repeated Failure to Report Income

No funny stuff. Be sure all of your income is accurately accounted for. If fail to report on income and it amounts to $500 or more, you can be charged a penalty and the specific penalties have now changed. Interest and penalties are calculated on a daily basis and they can add up quickly!

Don’t get caught paying more than you need to: report all of your income thoroughly and carefully. The TAXplan app will help you report your income easily and accurately, and your file is always checked and optimized by a TAXpro. Get started now.

RRSP Deadline

Have you considered contributing to a Registered Retirement Savings Plan (RRSP)? It’s one of the of best ways to save money on your personal tax. The great thing about an RRSP is that you save on any taxes owing today while also putting money into a secure investment that will help you save money for your future.

Contribution Limits

  • 18% of your earned income in 2015; or
  • $25,370 – the 2016 tax year maximum contribution amount.

The timeline for RRSP contributions is 60 days after year end. That means that you still have time to make RRSP contributions to offset 2016 taxes, but time is running out! The RRSP deadline is March 1st, 2017.

Summary

So in summary, the important 2017 tax dates in Canada are:

  • March 1st, 2017 – RRSP deadline
  • May 1st, 2017 – Income Tax deadline
  • June 15th, 2017- Self-Employed Tax deadline

Just remember that the best way to file your taxes this year is to work with a tax professional. It’s also the best way to ensure that you’re optimizing your financial situation for the most strategic and beneficial tax outcome. The most convenient and cost-effective way to submit your taxes to a professional is by using the TAXplan app. It’s the only app in Canada that connects you with professionals–TAXpros–who know the ins and outs of the Canadian tax laws and regulations. Our TAXpros will ensure that you get the most money back and pay the least amount of taxes possible every time. Click here to get started now.