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Plan ahead so you are prepared to file your tax return next year more easily. Tax planning should always be on your mind. If you have a business or are a high-wealth individual you should seek professional tax advice from a CPA tax specialist or a tax lawyer. Tax planning should never be an afterthought.
Tax Planning/Preparation for Investors
Tax Planning for Seniors - or Planning Prior to Age 65
One of the most important things to do during the year is to store all tax-related documents in one place. Our preference is to retain electronic versions of all documents, and we have a "folder" for each tax year, with subfolders for tax slips, donation receipts, etc in each tax year. Any electronic files should always be backed up! If you don't retain records electronically, just on paper, then if you have a filing cabinet, have one or more folders for these documents, including:
your tax returns and supporting documents for previous years
notice of assessment and any other correspondence from Canada Revenue Agency
records of tax instalments made
wage statements
medical and dental cost receipts - see eligible medical expenses article
receipts for attendant care, including attendant care expenses paid to a retirement home
transit pass receipts (only for Ontario seniors)
receipts related to fitness/activity credits and children's arts tax credits for Manitoba, Newfoundland & Labrador, Nova Scotia, PEI, Saskatchewan and Yukon
child care cost receipts - could include summer camp receipts
receipts for moving expenses, if you moved at least 40km to be closer to a new job, to run a business, or to attend a post-secondary educational institute full time
receipts for costs related to home renovation and home accessibility tax credits
charitable donation receipts
political donation receipts
Registered Retirement Savings Plan (RRSP) contribution receipts
First Home Savings Account (FHSA) contribution receipts
records of repayments to Homebuyers' Plan or Lifelong Learning Plan
records of RRSP or RRIF withdrawals, and the amount of tax withheld
records of investment purchases and sales in non-registered accounts (transaction confirmations). These should be kept until 6 years after the investments have been sold.
investment account monthly statements
If you don't have a filing cabinet, pick a drawer or two in which to store these records, or get a multi-pocket expandable file folder, preferably legal size. Better yet, keep electronic records of these items on a computer which is backed up frequently!
See our article Records Retention - What Books and Records Must be Kept by an Individual or a Business?
If you are an employee, make sure that the TD1 form filed with your employer is up to date.
Review the amount of income taxes, Canada Pension Plan or Quebec Pension Plan contributions and Employment Insurance or QPIP premiums being withheld from your wages, by checking against the CRA payroll calculator. See our article on take-home pay calculators.
If you have investments in non-registered accounts, see the following:
Tax Issues re Investing, and Tax Treatment of Different Types of Investments
Foreign Asset Reporting - Form T1135 Foreign Income Verification Statement - VERY important!
If you use spreadsheet programs, it can be very helpful to have an investment continuity schedule for non-registered accounts. The worksheet should have beginning of year balances, purchases and sales during the year, and end of year balances, with capital gains being calculated in the worksheet for any investments sold. If the investments are in US dollars, all amounts should be converted to Cdn$ using the exchange rate as of the date of the transaction.
Plan ahead, especially if you are an investor with some capital loss carry-forwards, regarding the Old Age Security Pension Clawback - capital gains can increase the clawback, even if they are completely eliminated by capital losses carried forward.
See Topics and Resources for Seniors.
Now is the time to look for a tax professional if your financial situation is getting more complicated. Don't wait until next tax season, when they are all extremely busy. Our Directory has links to accounting, bookkeeping and financial planning organizations in Canada.
Prepare Ahead for Your Tax Return: tax information slips, receipts and other information you should gather
Canadian Tax Calculator: project what your tax situation will be for this year, and let it help you to determine how much to contribute to RRSPs during the year. use it to check your tax return.
Investment Income Tax Calculator: see the big difference in taxes for different types of investment income.
Tax Tip: Nobody plans to fail - they just fail to plan!