Planning Ahead for Your Tax Obligations
Many people don’t realize it but if they adopt the attitude of thinking ahead regarding their tax obligations, they could put themselves in a much better tax situation. Normally what happens is once the yearly tax season ends, everyone just wants to forget about their taxes until the next year. Then they run the risk of not being able to take advantage of some potential tax breaks for the following year, either because they are not aware of them, or they didn’t retain the proper documentation that is needed to prove their eligibility.
A good example of a potential tax benefit that requires a little planning ahead is the Ontario Energy and Property Tax Credit (OEPTC). This is a tax break that has been designed to help those who have a low to moderate income and live in Ontario and have the obligation of paying sales tax on their energy and property. Hopefully if you used an experienced accountant you have already taken advantage of this tax break. The way it works is that you have to apply for your current year’s OEPTC on your previous year’s taxes. A special form has to be completed which is Form ON-BEN to apply for this benefit.
If you qualify and the CRA approves your eligibility you will have an option as to how you can receive payment for this credit.
Often where people miss out on future tax breaks is when they are transitioning into their senior’s years. There could be a lot of potential tax breaks now available to them as a senior that they were not eligible for in the past. A good example of this is the Ontario Seniors Homeowners’ Property Tax Grant.
The purpose of this tax grant is to help seniors with the cost of their property taxes. Often when an individual is no longer working and has gone into retirement their income is much lower, yet they still have the same costs associated with owning a home.
As with any of the tax grants and incentives there is specific criteria that must be met. Even if one individual tax break doesn’t seem to add up to much, using a professional accountant to evaluate all that you may be eligible for could end up being a substantial amount.
It used to be that a person would only consider using an accountant if they had a complex tax situation or a business. Now many people who are average income earners, are finding it beneficial to use this type of expert service to insure they are getting the best tax breaks possible, and to overcome the complexity that often comes with filing taxes.