Two weeks left to the last day of income taxes submission. Are you ready?!
What do income taxes mean?
The government gets a % of each individual income every year.
This is the cost of the services you get, the medical service, the clean streets and other services.
Every year, you have to submit the papers by end of 30 April. If you pass this date, then you pay interest. So if you have to pay $500 to the government and you passed this date, you pay $500+interest.
How much does the government gets from my income this year?
Source: http://colinkingsford.com/downloads/Personal_tax_rates_2009.pdf
In this figure point your income to know how much both federal government and provincial government in Quebec and in Ontario get. Note that the salary $38,386 is a serious number because the taxes % increases from 16% to 22%!
My friend said that I will get a lot of money back because this is the first year. Is this true?
It depends. For example, If you get hired for your job in September for an annual salary of $28,000, the government deduce from your salary 16% of the $28,000. But actually this is not true for the first year since you started working since September only. That’s why when you submit your taxes; the government returns you the rest of the money back.
How to fill the forms?
To cut it short, go to an accountant. It can cost you from $20 to $250. It depends on the quality of accountant, the money you get back too.
H&R Block is a well known across Canada http://www.hrblock.ca/
You basically have two forms to fill, one for the provincial gov. and the other for the federal Gov.
You get two papers from your employer and a paper from your land lord. You give these papers to the accountant.
Expenses to claim
There are some items that you can claim in your taxes that helps reducing your annual income.
Be aware to keep the proofs of these expenses (receipts and invoices) and give them to to the accountant.
1. Medical expenses
Keep your drugs store receipt (things that you get with prescriptions)
The doctors’ receipts and medical professional receipts
2. Private Insurance
If you are under a private medical insurance company, you can claim the money you pay for it. (This is also a type of medical expenses.)
So for example, if you are subscribed with Blue Cross private inssurance, and your company deduces $30 of your salary every month for the issuance. You can claim the $360 that you paid for the year.
If you don’t know how much the company deduced from your salary, it is easy to see the total amount you paid for insurance in the last payment slip you get by end of Dec.
I already give my medical expenses receipts to the medical insurance. Do I still claim these expenses?
You claim only the difference. For example if you get a medical examination for $70, Blue Cross paid you $56 only; you can claim $14 as medical expenses.
3. Education
If you study in the university or colleague, you can claim these expenses too. You get a form 8 from the educational institute or they offer you to print it online.
4. Monthly bus ticket in your taxes
Only the monthly subscription can be claimed. Keep your receipts
5. Business expenses, if you do business at home
You can claim a % of your rent, electricity, mobile bill, gas as business expenses, the new laptop and printer(if you use them in your business).
How to be organize my income and expenses to be prepared by the end of the year?
The best thing you do is that you prepare a folder for each year and keep whatever invoice you get. Also keep a light excel sheet to record your expenses and income through the year. That’s how you can be ready by the end of the year to submit your papers.
This is a sample of excel that I use for this reason and also to track my expenses of each month.
Download excel sheet
Related Post: Where will you pay the least tax?
