Tax Prep – Checklist

General Cassey Bush 28 Mar

Canadian Tax Time Checklist: Get Ready for the 2024 Tax Season

Tax season in Canada can feel overwhelming, but with a bit of preparation, you can make the process smoother and even maximize your returns. Whether you’re filing on your own or working with a professional, following this checklist will help you stay organized and avoid costly mistakes.

1. Gather Your Documents

Start by collecting all necessary documents, including:

  • Income slips (T4, T4A, T5, etc.)
  • Deduction and credit receipts (RRSP contributions, medical expenses, tuition receipts, childcare costs, etc.)
  • Other tax-related statements (Notice of Assessment (NOA), RRSP/TFSA contribution limits, investment statements, rental income records, etc.) Having these documents on hand will save time and ensure you don’t miss out on deductions or credits.

2. Know the RRSP Contribution Deadline

The deadline to contribute to your RRSP for the 2024 tax year is March 3, 2025. Contributions made before this date can be deducted from your taxable income, reducing the amount of tax owed. If your employer offers an RRSP matching program, check their deadlines to maximize your benefits.

3. Take Advantage of Lesser-Known Tax Deductions

Salaried employees often have limited tax reduction options outside of registered accounts like TFSAs, RRSPs, and FHSAs. However, there are additional deductible expenses, including:

  • Labour mobility and moving costs for job relocation
  • Home office expenses
  • Uncovered medical expenses
  • Trade or professional exam fees
  • Investment losses Consulting a tax professional can help you uncover these opportunities and optimize your return.

4. Set Up a “My Account” with the CRA

A CRA My Account allows you to:

  • Access tax forms (T4, T4E, T5, etc.)
  • Monitor benefits and payments (Canada Child Benefit, GST/HST rebate, etc.)
  • Check RRSP and TFSA contribution limits
  • Receive assessment notices and correspondence quickly While you can still interact with the CRA via mail or phone, having an online account streamlines the process and saves time.

5. Plan for Taxes Owed or Refunds Received

  • If you owe taxes, file and pay by April 30, 2025, to avoid penalties and interest. If you need extra time, consider setting up a CRA pre-authorized debit (PAD) agreement to manage payments.
  • If you’re getting a refund, have a plan for it! Consider using the funds to pay down debt, invest, or save for future expenses. Without a plan, it’s easy to spend the money before it even arrives.

6. Start Planning for Next Year

Last-minute tax planning can lead to missed deductions and costly mistakes. Instead of rushing, take time to strategize for the next tax year. Registered accounts like TFSAs, RRSPs, and FHSAs require careful planning to maximize contributions and avoid penalties. RRSP and FHSA contributions have strict deadlines for tax deductions, and withdrawals from these accounts need to be managed wisely to minimize taxes.

7. Integrate Tax Planning with Other Registered Accounts

While TFSA and RESP contributions don’t affect your tax filing, they are essential for long-term financial planning:

  • TFSA: Contributions are not tax-deductible, but withdrawals are tax-free. The TFSA has a lifetime contribution limit and is not income-dependent.
  • RESP: The government offers up to $7,200 in grants for your child’s education. To maximize benefits, contribute $2,500 annually by December 31 for 14 years after your child’s birth.

Final Thoughts

By following this tax checklist, you can ensure a stress-free tax season while maximizing deductions and avoiding penalties. Whether you’re planning for the current tax year or setting yourself up for financial success in the future, proper preparation is key.

Need help navigating your taxes? Consult a professional to ensure you’re making the most of your tax-saving opportunities!

Saving a Down Payment in Canada: Best Accounts & Strategies

General Cassey Bush 14 Mar

Best Savings Accounts for a Down Payment

Canada offers several tax-advantaged accounts that can help you grow your down payment faster. Here’s what you need to know:

1. First Home Savings Account (FHSA)

  • Designed specifically for first-time homebuyers.
  • Contributions are tax-deductible (like an RRSP), and withdrawals for a home purchase are tax-free (like a TFSA).
  • Maximum contribution of $8,000 per year, up to a lifetime limit of $40,000.
  • Can be combined with the Home Buyers’ Plan (HBP) for even more savings.

2. Tax-Free Savings Account (TFSA)

  • Contributions are made with after-tax income, but investments grow tax-free.
  • Withdrawals (including investment gains) are also tax-free.
  • No restrictions on how funds are used, making it flexible for a down payment.
  • 2024 contribution limit: $7,000 (with cumulative room from previous years if unused).

3. Registered Retirement Savings Plan (RRSP) – Home Buyers’ Plan (HBP)

  • Allows first-time buyers to withdraw up to $35,000 tax-free for a down payment.
  • Must be repaid over 15 years to avoid tax penalties.
  • Good for those who have been saving in an RRSP but need to access funds early.

4. High-Interest Savings Accounts (HISA)

  • No tax benefits, but offers easy access and higher interest than regular savings accounts.
  • Safe and liquid option for short-term saving.
  • Can be used alongside other accounts to diversify savings.

Tips to Maximize Your Savings

  • Automate Contributions: Set up automatic transfers to your savings accounts to stay consistent.
  • Reduce Unnecessary Expenses: Cut down on discretionary spending and put that money into savings.
  • Invest Wisely: Consider low-risk investments to grow your savings over time without excessive risk.
  • Take Advantage of Government Incentives: Programs like the FHSA and HBP can significantly reduce your tax burden while growing your savings.

Insured vs. Insurable Mortgages: What’s the Difference?

When saving for a down payment, it’s important to understand how your mortgage will be classified:

  • Insured Mortgage: If your down payment is less than 20%, you’ll need mortgage default insurance (CMHC, Sagen, or Canada Guaranty). This protects the lender but increases your overall cost.
  • Insurable Mortgage: If your down payment is 20% or more, mortgage insurance is not required. However, if you meet certain lender criteria, you may still qualify for lower interest rates.

Knowing which category you’ll fall into can help you set realistic savings goals and plan for additional costs.

Final Thoughts

Saving for a down payment is all about using the right tools and staying disciplined. Take advantage of tax-efficient accounts like the FHSA, TFSA, and RRSP, and keep your savings strategy on track with automated contributions and smart budgeting. The sooner you start, the closer you’ll be to homeownership!

Need help planning your mortgage? Let’s chat about your best options and how to maximize your savings for a smooth home-buying process.