It’s tax season. A few things to consider today.
2019 Tax Receipts
February is generally the month you start receiving your tax receipts such as T4’s from work, T5’s from banks, T3’s for investments, etc. Make sure you put these in an envelope marked taxes to ensure they get to your accountant before they get lost.
Tax Free Savings Account vs. Registered Retirement Savings Plan
Simply put, a TFSA earns interest tax free on contributions (max $6,000 for 2020) but there is no tax deduction for the contribution. An RRSP contribution will give you a tax deduction now and gets taxed when you withdraw funds from the RRSP.
Registered Retirement Savings Plan (RRSP)
Check your notice of assessment for your contribution limit and talk to your accountant to see if a contribution is right for you. The higher your income, the greater the tax savings on contributions. Deadline for contributions is Mar. 2nd.
The list of things that qualify as medical expenses for tax is more than you think. You can visit the CRA website for a complete list.
Good idea to visit the pharmacies you dealt with and ask for a medical receipts summary for 2019. It is much easier for tax filing and ensures you do not miss any.
Disability Tax Credit
If you have a disability or had any major surgery, have your doctor complete form T2201 and send to CRA to see if you qualify for the disability tax credit.
Rental Property Mortgage Statement
Interest expense on rental properties is deductible but the principle is not. Check your annual mortgage statement to ensure you pick up the right amount.
2020 Tax Installments, avoid penalty and interest
Personal tax installments, if required, are due quarterly and the first one is due by March 15th. Check with your accountant or CRA if you must pay.
T4’s and T4 Summary
March 2nd, 2020 is the deadline for companies to file T4’s and T4 Summary with CRA and to distribute the T4’s to employees.
T5’s and T5 Summary
T5’s also due March 2nd for any dividends paid to shareholders in 2019.
Andre hopes you find this general information helpful. Please consult with your accountant or himself if you have any questions. He also suggests you visit his web site for your tax checklist, important dates, and to sign up for the monthly newsletter - www.larosacpa.ca
This material is provided for general information and is subject to change without notice. Please consult with your professional advisor before you act on any of the above information to ensure it’s right for you.