By Russell Stewart CFP.
We all want our investments to grow and help fund all the things we would like to do now and in our retirement. One investment we don’t always fully appreciate is the investment in doing our tax returns. Today’s tax returns are far more complicated than they have ever been and it has becoming increasingly difficult to keep up. Certainly the computers and do it yourself software are great but are you really sure you have collected all the deductions and credits you and your family are entitled to.
You have gathered up all your “T” slips and plugged them into your tax software, now here is a partial list of other things for you to consider:
Children under the age of 18 living with you?
They may qualify you for eligible dependant credits or the children’ credit.
Children going to post-secondary school?
You may be able to use some of their education cost on your tax return.
A family member living with you that is over 65?
In Ontario households with seniors may qualify for tax deductions on some of your home improvements. You may also qualify for caregiver credits.
A family member living with you that is disabled?
You or they may be entitled to the disability tax credit.
A family member that is infirm not living with you that is dependent on you for care?
You may qualify for the infirm dependant tax credit.
A spouse/common-in-law partner?
You may qualify for the spouse or common law partner credit.
Do you pay for your own medical insurance plan?
That may qualify you for the medical tax credits.
Did your children play sports? Learn a musical instrument? Take dance lessons?
These and many more activities may qualify for the fitness credit or the cultural activities credit.
Do you have pension income? RRIF or LIF income?
These sources of income may be eligible for Pension splitting.
Do you have a spouse that makes more or less than you do?
One of you may be entitled to the new income splitting provisions in the tax act.
Money in the Bank? Mutual funds? Shares of publicly traded companies? Bonds? Other investments?
These investments run the gamut of tremendously good to absolutely horrible when it comes to your personal taxes.
You may be able to very quickly reduce your tax bill and possibly increase your rates of return by simply making sure you have invested in your Tax Return for 2014. Whether you do them yourself or have a tax professional prepare them take the time to talk with your Professional Investments Representative about your tax return. Their insights might just give you a much better return on your tax investment.
Remember we all have to pay our taxes but “There is no need to leave a tip!”