Every year most Canadians celebrate as the tax refund cheque arrives in the mail. Its a pleasant bonus amidst the bills. Actually, it simply means you paid Canada Revenue Agency too much tax throughout the year, you were giving the government an interest-free loan.
Keep Your Money! - If you inform CRA that you will be making non-payroll RRSP* contributions, they will authorize a reduction in the taxes that are deducted at source by your employer. This additional cashflow can be utilized in a number of different ways wthout making a dent at all in your take home pay. What you do with it depends on your situation and goals.
Consider - Paying down your credit card or consumer loans, paying down your mortgage more quickly, contributing to a Registered Education Savings Plan or Registered Disability Savings Plan if applicable, topping up your Tax Free Savings Account which can be used as an Emergency Fund.
In other words, by putting the money that already belongs to you back in your pocket - and without adding a single cent of extra cash - YOU can be on your way to financial independence sooner.
*It's not just RRSP contributions that entitle you to lower taxes deducted at source. CRA allows you to claim child care expenses, alimony, maintenance or support payments, employment expenses, and interest expenses and carrying charges on investment loans, among other tax deductions, to reduce the taxes you pay throughout the year.
Go to the CRA website www.cra-arc.gc.ca and search form T1213, it shouldn't take you more than a few minutes.
Disadvantage...no more tax refund celebratons. Advantage - Put YOUR money to work and eliminate your debt quicker or increase your savings!
Are YOU "Retire-able"?...take our free "Retire-ability Score" and find out how you stack up to the 8 key factors: Vision, Health, Interests, Social Needs, Home, Lifestyle, Financial and Legacy.
To find out more of what you need to know, contact me:
Michele Wells Financial Advisor Manulife Securities Incorporated
Focused WealthCare Balancing Finances & Lifestyle
call (807) 684-1900 fax (807) 626-5111 e-mail Michele.Wells@manulifesecurities.ca
find me on linkedIn: www.linkedin.com/in/michelewellsccs
This is for information purposes only and should not be considered tax advice. Individuals should seek the advice of a tax professional to ensure any action taken with respect to this information is appropriate to their specific situation. Thank you.