previous page: Making Medical Expenses a Business Expense
page up: Understanding Taxes
next page: Preparing for Tax Season

New Year Tax Advisory

Starting out the New Year with a fresh approach to things is always challenging yet rewarding at the same time. One suggestion I make to my clients is to not dwell on the past but step up and take control of your affairs so that you do not fall into a similar situation in the future. An example of this would be the person who always waits until the last minute to prepare for their taxes. Now you are probably thinking that I am referring to taking care of your 2006 tax return but that is not the case, I am thinking about 2007. If you find yourself giving donations throughout the year, make sure you have a new envelope set up to start accumulating those receipts now. If you have medical expenses that are not covered by your health plan, keep those receipts in that same envelope. The idea is that if you have one envelope in one place where you always put tax related information, then it is easier to find them next year when you have to file your 2007 tax return.

So what sort of things should you keep? Well here is a list - it does not cover all things, but at least you will have the majority:

* Donation receipts

* Medical receipts including prescriptions, physiotherapy, massage therapy, chiropractor, glasses to name just a few

* Summaries from your health insurer wherein they show what you claimed vs what was paid to you (you get to claim the un-reimbursed amount as a medical expense)

* Receipt for your safety deposit box rental

* Receipts for child care including daycare fees, nanny's wages, day camps for spring break, professional days, summer vacations or Christmas break

* Stock transactions be you buying or selling them (for those made outside your RRSP only)

* If you are self-employed or paid commission income, your receipts for business expenses, car costs and your home costs (it would be easier to have these three things in their own envelopes)

* A mileage log

* Tuition fee receipts for any course you take - including self improvement

* Tax slips including T4, T4A, T4RSP, T4CPP, T4OAS, T5, T3 etc but watch what year is listed so you do not mix up 2006 and 2007 receipts

* Moving expenses so long as you moved more than 40 km closer to your new job or school

* RRSP receipts but keep in mind that you can use your contributions made between January 1 and March 1, 2007 towards your 2006 or 2007 income

If you keep a safe and consistent place to keep these items, you won't find yourself hunting around and possibly missing out on some deductions at this time next year. Also, if you have not already done the above for your 2006 year, you better find them all now as tax season in only 3 months away!

About the Author

This article was written by Gabrielle Loren -- a partner with Loren & Company, CGA's located in North Vancouver, BC and can be reached at gabrielle@loren.bc.ca, at 604-904-3807 or check out their website at www.loren.bc.ca

Related Articles

  1. Death and Taxes - 2 Certainties in Life
    The question of what is the tax implications when one dies unfortunately comes up far too often. There is really no simple answer so hopefully the following will give you enough information to know that more questions need to be asked in certain circumstances.
  2. Tax Free Benefits Available From Your Employer
    Learn about tax deductions available via your company
  3. Travel Expenses – Are They Tax Deductible?
    Is it possible to travel and not pay for it?
  4. Home Office and Taxes
    If you use a home office, you can deduct a portion of the costs from your tax payment
  5. Why Using a Designated Accountant?
    I recently had a lady walk in to our office asking about the cost of preparing a tax return for her corporation. She was quite surprised at the fees we charge given that her last accountant (who had recently died) only charged her $350. Now our fees are not high by any means and in relation to most accounting firms we are on par so to hear what she was paying in the past, made me very skeptical as to the level of professionalism that she was receiving.

previous page: Making Medical Expenses a Business Expense
page up: Understanding Taxes
next page: Preparing for Tax Season