My mouse pointer hovered over the “Place Your Order” button. I had multiple tabs open, checking the price on 4 different sites, making sure I was getting the absolute best deal. Based on the research I was doing, you would have thought I was making a $30,000 purchase of my next vehicle. Instead, I was debating which $20 cell phone holder to buy for my car. All of these sites, all of this indecision, all to save $2.
Isn’t it interesting how we will spend hours and hours researching multiple websites to save a few dollars but we only spend 10 to 15 minutes reviewing our tax return making sure all is in order and that we are taking advantage of all of the tax credits & deductions available to us? If we spent the same time reviewing our tax return as we spent shopping for small items online, we might be saving thousands versus nickels and dimes.
Taxes can be intimidating and definitely very boring - so many line numbers and odd wordings. Is this Line 101 “Employment Income” or Line 104 “Other Employment Income”? Hmm. Is this an “Eligible” dividend or “Ineligible”? Who knew dividends may or may not be “suitable marriage partners”?
Given the complexity and sheer intimidation of tax returns, it is no wonder most filers use tax return preparation software. Simply plug in all the numbers on the slips and trust the software to figure it out and put everything in the right boxes. We then sit back and cross our fingers and scroll to the last page hoping against hope that a number appears in Box 484 “Refund” versus the dreaded Box 485 “Balance Owing”. If it does, we sigh with relief and put away our taxes for another year, glad to be done that onerous task again.
But wait - Are you sure that refund number couldn’t have been bigger? What if your dividends were “Eligible” and not “Ineligible”? This is where a trusted financial advisor comes in handy. He or she should sit down with you every year and review your tax return, making sure you are paying the least amount of tax. What if you shifted your US stocks or ETFs into your RRSP or TFSA and held your Canadian stocks or ETFs outside? What if you had triggered some of your capital losses late last year and used them to offset some of your capital gains you are now claiming?
There are a multitude of tax tips & strategies out there and the sad fact is that many of us don’t take advantage of them just because we aren’t aware of them. Can you believe that? We unknowingly pay more tax than we have to?! If you are unsure of whether or not you are taking advantage of all the tax saving strategies available, come see us! We would love to help you keep more of your hard-earned dollars!
Mike Hayhoe, Canaccord Genuity Wealth Management
The preceding information is for general information only and does not constitute tax advice. All investors should consult with a qualified tax accountant for specific tax related issues.