For some of us we have even got last year’s taxes done and over with and yet we have to start thinking about the current year. By the time the deadline reaches for the previous year, we are already finishing off the first quarter of the current year.
It is often a common practice to try and give as little thought to our taxes as possible. We all know that once a year we have to listen to the call of the tax man, and file our taxes. For the rest of the year we are just glad that we don’t have to think about this for awhile. However, if you really want to keep your taxes to a minimum whether you own your own business or not, giving some thought to your taxes throughout the year is a must.
First, think about tax planning. Now you may be thinking that this is only something that those that have a an abundance of money need to do. Chances are this is not you, but you too can put this type of planning to work for you to help reduce your tax obligation.
For example, as a couple you may be thinking that your partner should find work to help supplement your one working family member strained income. There are a lot of challenges that you are facing when considering this thought. First you need to determine what is the extra income going to do to you from a tax point of view? If you are now claiming your partner on your return, possibly this will be a deduction that you are going to miss out on. Will it mean that as a result of this your taxable income with end up in a higher tax bracket which in turn means you will be paying even more tax? Is the extra income your partner is going to make after taxes enough to justify this? There are other costs that have to be considered when an individual is going back into the workforce. It may mean that you need an extra vehicle, or you will need to arrange for day care. Once again in order to make extra money you are going to have extra expenses as well.
Even though you may have all these extra expenses, there could be potential tax breaks that will also now be new to you that can help offset these costs. For example, your partner may be able to take advantage of the transportation credit.
All of these things that you now have to think about are really tax planning related when you review them with your tax situation in mind. It really can be a little over whelming and for this reason a lot of people just prefer not to think about it. Using a quality Toronto Accountant can work to your advantage and is well worth the small service fee for both tax planning and doing your returns.
