Preparation for tax season starts long before you actually file your taxes. With a proper understanding of Canada’s tax laws, you can arrange your financial transactions throughout the year so that you can (legally) minimize your taxes come tax time. If you wait ’til filing your taxes, there’s really very little you can do to reduce the amount of taxes you owe.
Since it may be too late for you to arrange your 2013 finances to minimize taxes owing (ok – not quite too late – if you haven’t already maxed out your RRSP contributions for 2013, you’ve got a few more days – www.cra-arc.gc.ca), the best you can do right now is to start looking into what changes you can make this year to make sure that you’re not paying one dollar more than you need to in taxes for 2014.
How? Read books, take courses, talk to people who already know about this stuff…
Note: if you don’t have cash lying around to contribute to your RRSP, but you DO have investments outside of a registered account (mutual funds…) it’s possible to do an ‘in-kind’ RRSP contribution, in which you transfer the investments directly into your RRSP. Assuming you don’t actually plan to use that money anytime soon, it makes a LOT more sense to have it growing tax-free inside a registered account (though the decision regarding RRSP vs TFSA can be complicated), AND to get a tax-refund for doing so. Want to discuss this? Get in touch with me – we can talk 🙂