You might be surprised to learn that the BEST time of year to take control of your taxes is outside of tax season, from July to December!
After two years of helping PALZ who are 5-10 years behind on taxes, a major realization I’ve had is that the opportunity to pay the least amount of taxes possible for your situation comes from knowledge and action throughout the year, not just at tax time.
Regardless if you’re all caught up, or getting yourself ready to file years of back taxes, to increase the amount of refunds and empower you to move towards your financial goals, you’ll want to live your life being conscious of the actions you can take, that can dramatically impact your tax returns.
This will empower you to learn more about your own tax situation and potential deductions that only YOU can determine if you’ll take the actions necessary during the year, to qualify for them.
Following is just three tax tips of the MANY I have learned from working with hundreds of PALZ, for you to consider:
Ontario Staycation Tax Credit
To encourage Ontario tourism from residents until the end of 2022, any short-term rental accommodations that you use, including campground fees, AirBNB stays, or hotels/motels, keep your receipt to include on your tax return next year. Only accommodation fees are included, and of course not reimbursed or claimed as a business or employment expense:
A 20% refund on your tax return:
- $1000 maximum spending, up to $200 total - per individual
- $2000 maximum spending, up to $400 total - per family/household
To encourage more Zero Emissions Vehicles on the roads in Canada, the Federal government continues to offer an incentive purchase discount off qualifying vehicles (applied to the purchase invoice, by the dealer):
- $2,500 on purchase of vehicles under $55,000 base price, with short-range capacity
- $5,000 on purchase of vehicles under $60,000 base price, with long-range capacity
Additionally, self-employed that purchase ZEVs can accelerate the CCA claims on their tax returns, to write off the investment amount more quickly than with traditional gas vehicles.
* Tesla 2022 base prices disqualify them from this program.
LOVE Garage Sales and Estate Sales? Selling personal recreational items
Inflation is crazy these days! If you’re thinking of selling some personal/recreational items/vehicles, or collections of value - to get the cash and pay bills, keep in mind that items and collections sold (to a single buyer) for more than $1000 PROFIT, needs to be reported as capital gain on your next years tax returns.
Be sure to issue a receipt/copy with the buyer's name and address if possible, the date, and the amount, so you & your buyer both have the required documentation.
If you found an absolute STEAL of an item at an estate sale and now want to sell it for more than $1,000 profit (considering the cost of purchase, as well as expenses to prepare the item for sale), keep this tax liability in mind when negotiating the sale price.
That’s just THREE of the many ways you can legally avoid overpaying taxes, by staying aware of CRA programs offering income tax deductions & credits to qualifying taxpayers, and benefits programs for low-income support, as well as avoiding penalties or reducing the after the fact.
If you want more financial confidence, it’s my mission to provide that through tax empowerment!
I’ve been quiet the last few months, recovering from a busy tax season and pulling together a FREE eBook for you - 21 Tax Tips For Winning Financial Confidence: Little Known Tax Programs For Canadians Who Want To Pay Less Tax and Maximize Benefits.
These are all my best tax tips that can be leveraged anytime throughout the year to benefit your tax results.
If you’d like my help with your personal tax situation, refer to the image below
Tax Fairy Godmother
FREE TAX TIPS GUIDEBOOK
21 Tax Tips for Winning Financial Confidence
Little Known Tax Programs For Canadians Who Want To Pay Less Tax and Maximize Benefits