No April Fool’s — time to get serious about filing taxes for 2014

Tax Due DateHere’s my latest MoneySense blog. Now that it’s April and Easter is almost here, you know what that means! It’s tax-filing time: April 15th for Americans, April 30th for Canadians.

As the piece recounts, even if you’ve been staying on top of inputting tax slips and receipts, if you have taxable income you’re better off waiting a few days before filing.

But the good news is that once you file, the onerous task is over for another year, and many can also expect a refund. Plus, of course, winter is finally all but over.  Read more

What you should do this weekend

While taxes don’t have to be filed until April 30th, I always like to do a preliminary runthrough with TurboTax (formerly QuickTax) before the end of February. When I did this a few days ago, I was glad I did because I discovered I had a bit more RRSP contribution room than I’d guestimated, and I still had time to act before Monday’s March 3rd RRSP deadline.

In my case, I contribute regularly through a group RRSP at work, so I don’t normally regard the looming RRSP deadline with any trepidation. But if you’re in employer sponsored pensions, Pension Adjustments may vary up and down. You really don’t know the precise RRSP room until you get your Notice of Assessment after filing the prior year’s taxes.

Don’t file until second week of April

By now, you should have received your T-4 slips and most RRSP receipts, which is sufficient for the purpose of a preliminary runthrough. I like to use the online edition of TurboTax, which makes it easy to carry forward your information from the prior year, including RRSP contributions and unused room from prior years. If you also use an online discount broker, you can make an RRSP contribution easily online, just by transferring funds into your RRSP account: that should generate the needed RRSP receipt that you will use to back up your claim: you still have two months for that receipt to arrive and to finish inputting other data into your return — T5s,T3s and the like can be expected to dribble in until the end of March and first week of April, which is why I always hold off actually filing (NetFiling) until the second week of April. If you have significant non-registered (taxable) investments, you may as well wait till then as well: filing adjustments after the fact would just be an unnecessary hassle.

But do the preliminary work this weekend, just in case you miscalculated RRSP room and while you still have time to rectify the situation. I’m glad I did, because there was $1,400 of unexpected extra room. Remember too that there’s $2,000 worth of overcontribution leeway just because people do make these kinds of miscalculations or errors. I don’t deliberately overcontribute that much but if you’re in the opposite situation as I was — making too high rather than too low contributions — it’s nice to have a little flexibility.