If you have not filed your taxes yet, here are some tips to get you there:
- File your taxes on time (due April 30th or June 17th if self-employed) to avoid harsh late-filing penalties! File even if you cannot pay.
- Taxes are due April 30th (or earlier if CRA asked for 2018 instalments). So, it is better to estimate your taxable income as early as possible to minimize tax interest.
- File your taxes to get benefits that are yours (such as Canada Child Benefit, GST, Guaranteed Income Supplement, and Working Income Tax Benefits) and to avoid CRA withholding your refunds!
- 2018 income tax brackets for Albertans:
Taxable Income Marginal Tax Rate
First $11,809 0%
$11,810 to $18,915 15%
$19,916 to $46,605 25%
$46,606 to $93,208 30.5%
$93,209 to $128,145 36%
$128,146 to $144,489 38%
$144,490 and up 41% to 48%
In Canada, the more money you make, the more taxes you have to pay. If you are in a higher tax bracket, you can use certain deductions (RRSP/Flow-through shares, for example) to bring your income to a lower preferred tax bracket.
- If you already filed your taxes and got your refund, you can:
- pay down debt with the highest interest rate (thus, more money in your pockets)
- buy TFSA (could be your emergency or vacation fund),
- buy RRSP (tax deduction for 2019),
- buy RESP (free government grants for your kids’ education),
- donate to your favorite registered charity and get tax credits, and/or
- buy something nice because it was a good tax planned year!
- Keep your records for 7 years, should CRA want them.
- When in doubt, go to a tax professional.
May your taxes be done on time and done right!
Ka-Yee Wong, CPA, CA