Tax Checklist For 2012 - Tax Accountant Mississauga And Etobicoke
Even though the deadline for filing income taxes is months away
, thisis the time to look at ways to minimize taxes before the yearend rolls around-when it could be too late to complete some tasks, says accountant of Mississauga.
During the busy time of children going back to school and the busy holiday season, you will need to turn your attention to your finances-specifically, personal and corporate taxes -
Here are seven last-minute tax tips as
Charity Giving back to Society
To be eligible for a full tax receipt- Give donations before year end,says SJ Chartered accountants based in Mississauga and Etobicoke. There is also an opportunity to donate securities; such a donation could lower your capital-gains tax liability. Capital Gain is considered zero," accountant of Mississauga says, "but you get the full donation tax receipt for the full fair-market value of the stock."
Expenses Deadline
SJ Chartered accountants, tax consultants, Business advisors( in Mississauga and Etobicoke) says that one should remember to pay all deductibleexpenses. Such items as child-care costs, medical expenses and union dues all can be claimed on tax returns as long as they are paid before Dec. 31.
Capital Gain tax planning can save taxes
People who currently have capital losses in non-registered accounts can considerselling those securities to lessen taxes on other stocks that have done well this year or on gains from previous years, says tax Consultantin Mississauga.
Although capital losses can be carried forward indefinitely, in carrying them back, losses can be applied to gains from only for three previous years. For example, if the client's capital losses from 2012 exceed his or her gains from 2009, 2012's losses can be applied to recoup some of the 2009 taxes.
Before selling anything, however, it's important to consider whether the investments are in Canadian dollarsor a foreign currency. In some circumstances, an investment that is valued in a foreign currency may be a loss on paper, chartered accountant Mississauga says, but that loss may be offset when the value of the security is converted to Canadian dollars. In such cases, selling would no longer be an effective tax-reduction strategy.
BONUSES planning for year end- say Business advisors based in Mississauga and Etobicoke
Yearend bonuses could have anegative impact on your tax situation. Tax accountant Mississauga says in that case you can consider deferring the payment.
"If there's an opportunity to defer it a few weeks into January," accountant Mississauga says. "That way, you can defer the taxes for a year."
USE A PENSION CREDIT
The people who are 65 years old in 2012can take advantage of the pension income credit, in which the first $2,000 of pension or annuity income is eligible. And although youmay not considerthat you need a registered retirement income fund (RRIF) because of income from the Canada Pension Plan or other investments, the tax credit may make converting an RRSP into a RRIF worthwhile.
"If you are in the low tax bracket," accountant of Mississauga says, "The income will effectively be tax-free, federally."
Most provinces have similar credits, tax consultant at Mississauga adds, that minimize your taxes payable.
TFSA Tax planning as per Etobicoke accountants
Tax accountant Mississauga says its often better to withdraw money in December for a large purchase in the following month. If the withdrawal is in January, the client would have to wait 12 months before replenishing the TFSA.
Plan taxes before Year end! - Tax accountant Mississauga and Etobicoke
Although the filing deadline is months away, begin yearend tax planning now. If you take too long deciding whether to execute a trade in order to take advantage of a previous year's loss, it might be difficult to make the sale at the end of December.
by: SHAIL JAIN
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