Maximizing Your Refund

March 2020

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Maximizing Your Refund
Tax Tips to Save You Money

Income taxes are inevitable, but there are various ways to effectively lower your tax burden. The best part is that you don’t need to be a tax professional to understand and take advantage of these money-saving methods. With a bit of planning and forethought, you can significantly lower how much you owe. Here are five simple tips to help get you started.

1. Practice good record keeping year-round

You don’t want to be scrounging for receipts or finding out that you didn’t keep a receipt you need just as the tax deadline is approaching. Keep track of your expenses and spending throughout the year, and make sure you file receipts and expenses as quickly as possible. With your records in order, you will have a much easier time claiming all of the proper deductions, and you won’t have to worry about an audit.

2. Claim eligible work-from-home expenses

Both employed and self-employed individuals can deduct expenses incurred from working at home from their income. This includes home office expenses, supply costs, transportation costs, and the like. Make sure you have the proper records and receipts to support all of your claims. Employees should also ask their employers to fill out a Declaration of Conditions of Employment form. You do not have to file the form with your return, but it is essential to have in case of an audit.

3. Claim eligible moving expenses

Canadians are also allowed to claim any moving expenses incurred from moving for a new job or moving in order to run a business at a new location. The main stipulation is that your new home is at least 40 kilometres closer to your work than your previous one. Eligible expenses include transportation fees, storage fees, and costs related to home selling and buying. These expenses can be deducted from your employment or self-employed income.

4. Claim eligible medical expenses

There are over 100 different medical expenses that Canadians can claim on their income tax return. The list includes everything from ambulance services to laser eye surgery. Even certain home appliances, like furnaces and air conditioners, can be deducted if prescribed by a doctor for respiratory conditions or other ailments. It is important to keep all receipts and check if any expenses that you incurred are eligible when filing your taxes.

5. File your taxes on time

It may seem obvious, but it certainly bears saying that you don’t want to be stuck paying penalties for filing your taxes late. Plus, penalties will eat into any savings you may have earned by claiming deductions. The tax filing deadline for most Canadians is April 30th, while self-employed people have until June 15th to file. However, even if you are self-employed, your payment deadline for any amount owing is still April 30th.

Filing your income taxes is never going to be fun, but knowing that you can claim several deductions will help the process feel a lot less stressful and encourage you to get it done. By tracking your expenses, filing correctly, and filing on time, you’ll be able to net big savings come tax time.

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