BMO's Financial Tip of the Week: Get organized as the income tax filing deadline approaches
TORONTO, ONTARIO--(Marketwire - April 25, 2012) - As part of BMO Financial Group's ongoing commitment to financial literacy and 'Making Money Make Sense' for Canadians, BMO is releasing a financial tip every week in 2012.
BMO's Tip of the Week:
Get organized as the income tax filing deadline approaches
With just days to go before the personal income tax filing deadline on April 30th, it is more important than ever for you to get organized and take advantage of any opportunities to lower your tax bill.
1. Find out what tax benefits apply to your situation
If you are eligible for certain tax benefits, which include credits and/or deductions, it allows you to reduce the total amount of tax owed to the government. Tax benefits apply to many different circumstances, ranging from tuition tax credits for students to child fitness and art credits for parents. There are several tax deductions and credits available for specific situations, so be sure to do your research and determine if any apply to your situation.
2. Get a better understanding of how your investments are taxed
Investing throughout the year is a critical tool for building up your savings. Equally important, however, is to take tax implications into consideration when making investment decisions. There are several ways to minimize taxes on capital gains, including: catching up on unused RRSP room; deferring the gains to next year; using capital losses to offset gains; and donating appreciated securities to a charity. Speak to your investment advisor on how to implement these strategies.
3. Be aware of key deadlines and dates
Although the main deadline for personal income tax filing is in a few days (April 30, 2012), there are other important tax deadlines throughout the year that one needs to consider. These include:
December 31, 2012 - If you turn 71 years of age in 2012, this is the last day you can contribute to your own RRSP.
March 15, June 15, September 15, and December 15, 2012 - Quarterly instalment due if you pay taxes to the Canadian Revenue Agency (CRA) by instalments.
June 15, 2012 - CRA tax deadline for self-employed persons to file their personal income tax return.
Rachael McKay, Toronto
Sarah Bensadoun, Montreal
Laurie Grant, Vancouver