It’s Tax Time Again

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As I sat staring at the tax software sitting on my desk collecting dust, Sandy Crozier’s blog “It’s Tax Time Again” hit my inbox.  It was the push I needed to get started on my taxes and had some handy tips so I thought I would share.  

It’s Tax Time Again by Sandy Crozier, Director of Stewardship Development 

I am what is known as a “First Generation Canadian”.  This means that I was born in Canada – but my parent wasn’t.  You won’t think that has anything to do with taxes, but you would be wrong. You see, my mom was Russian.  And despite what you think of the current situation over there in Ukraine, she had an enormous mistrust of the government.  Any government including ours.  In fact her parents also had this same mistrust.  They did not ‘register’ her birth for three weeks! This is why my mom had two birthdays – but that is another story.

This mistrust of government ran under the surface all year round, but would start to come to a head around tax time each year.  There was an uneasiness around the house.  Tempers were short.  Growing up we knew to stay out of sight around ‘tax time’.  

So when it comes to tax time in our home – I have an inherited disposition to panic. But I am happy to let you know that there is hope.  In fact, I do all our taxes now and here are some things I learned along the way that you might find helpful..

Don’t Panic…

Jesus tells us again and again ‘Fear not’.  The Bible tells us that “this is why you pay your taxes, for the authorities are God’s servants, who give their full time to governing” (Romans 13:6).  They are not out to ‘get you’ (no matter what my mother thought!).  If you are prone to panic, then you may want to consider using the services of a tax preparation company, or a tax software that does all the math for you.  If you are a single young adult that just needs moral support, then get together with group and have a ‘tax party’ where everyone pitches in for a software package that does 10 claims for one package and get some pizza and have fun!  It will at least make filing your taxes a little less stressful!

Don’t Lie…

As Christians, we are to reflect the image of God in all we do – including how we file our taxes.  Plus when you lie or cheat in order to pay fewer taxes, you are stealing from your neighbour.   The taxes that are collected is what is used to provide hospitals, health care, schools and special programs for those in need, programs and activities for your family, garbage collection to keep your neighbourhoods clean, park lands to remind us of the beauty of God’s creation.

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Get Organized and Start Early…

Start a file for all your tax information and receipts early in the year.  Keep it in a safe place, but keep it accessible to file and update the information throughout the year. If you take a few minutes every month it will save you hours come tax time.  Keep original receipts and write notes with them – trying to recall why you saved this receipt is not always easy months later and under the stress of tax time.  

If you file electronically, you do not send in the original receipts.  But the government can request that you provide the backup for any claim you submitted.  However, if you mail your taxes in each year, you must submit all the original receipts.  It is highly recommended that you make copies of them before you submit it and keep them in a clearly labeled file.

Claim Medical Expenses…

Medical expenses that can be claimed on your tax return include (but are not limited to) prescription medications, dental services, psychologists, physiotherapists, attendant care, and a  portion of assisted living home costs.  For 2013, you can claim medical expenses over 3% of your net income or $2,152 whichever is less.  You can pool all the family expenses together and claim them on one tax return – usually the one with the lower income.  If you use the same pharmacy, you can ask them for a tax receipt print out of all the prescriptions for the year.  This saves a lot of time by entering in only the total amount instead of each individual prescription.  Dentists, chiropractors and other medical professions will also provide you with a similar tax receipt.

Find out What’s New…

Changes are made every year with taxes.  Don’t miss out on an extra refund from the various layers of government because you didn’t know about a new credit.  For example, you may be eligible to claim under the Public Transit Amount, or the Children’s Fitness amount.  If your children are under 16 (or under 18 and eligible for the disability credit) you can claim an additional $500 tax credit for prescribed programs of artistic, cultural, recreational or developmental activity.

And eligible first time home buyers’ can claim a tax credit of up to $5000.

But err on the side of caution – if you qualify for a tax credit, then claim it but if you can’t prove or validate an expense, don’t. 

Be Generous…

Giving simply to get a tax benefit is not why you give – but it does make a difference on your taxes.  And if it results in a higher refund, you have more to be generous with.  Again, you must have receipts for everything you are claiming and like with the medical claim, you can pool them together to get a maximum benefit on one claim. 

Be On Time…

Always file your taxes on time.  Even if you are waiting for documentation, you can always submit an adjustment.  Filing late will mean penalties, fines and interest charges if it turns out that you owe money.  And make sure you double check your submission before you send it in.  The government will not correct your mistake.

So despite my inherit disposition to mistrust the government and panic, tax time can be healthy.  It allows us to account for the year and steward all that God (and the government) have for us. Take a deep breath.  Pray. And do your homework, stay organized and know what credits/options are available to you.  Get help if you need it and double check everything. Be like the men of Issachar who understood the times and knew just what to do (1 Chronicles 12:3). 

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