Top strategies Quicktax tax software uses for keeping the tax man at bay

By: Tom Witek
Submitted: 2010-02-05 12:43:10
Print this article | For publisher |

Rating:

 

In 2009 tax year, Canadians have new options to help them get a bigger tax refund and keep a few more dollars out of the tax man’s deep coffers.

One of the tax strategies is to use Tax-Free Savings Account which allows Canadians to deposit $5,000 per year and earn interest on these deposits tax-free. This account may be opened at any financial institution and its purpose is to save money, usually in combination with Registered Retirement Savings Plan (RRSP). Statistics Canada issued a report which states that at least one-third of eligible Canadians contribute to Registered Retirement Savings Plan (RRSP). Quicktax tax preparation software has an embedded feature called Registered Retirement Savings Plan (RRSP) Optimizer which allows its Canadian tax filers to calculate the best contribution amount or to test a few “what if?” scenarios an pick the RRSP contribution scenario which delivers the maximum return. Quicktax tax preparation software carries forward data from last tax season, even if you used Ufile or/and HR Block tax software, and calculates any remaining RRSP space for your optimal contribution.

Given the uncertainty stemming from current economic climate many Canadian tax filers might be considering cutting their RRSP contributions in the 2009 tax year. But before such drastic solution is implemented, Canadians have options that can positively affect their 2009 income tax return. One of the tax strategies involves borrowing money from low interest sources to top up your RRSP and paying down your loan with your tax return. In other words, the taxes that you have saved from the tax man are used to pay down the loan right away. One word of caution is that interest paid on these loans is not tax deductible. Quicktax tax preparation software can help you visually to see if there are any tax benefits in topping up your RRSPs.   

Another option is to use “qualified investments” from an investment to a RRSP account, and receive a tax receipt for the contribution. However, consider carefully such an option, since if your investment has dropped in value: when you paid for it, you will not be able to claim the loss once it is transferred into an RRSP. 

Does your company match Registered Retirement Savings Plan (RRSP) contributions? Don’t miss out on this opportunity and inquire.

Once you have compiled all of your financial papers and file a tax return you should feel relieved that the tax return you have filed is the optimal one and that it has been filed correctly so that the tax man does not knock on your door, smiling and holding a tax bill with additional penalties. Quicktax tax preparation software offers “Audit Defense” option; you have to pay additionally for this security, which is a guarantee on the tax preparation services provided by Quicktax tax software. This “Audit Defense” guarantee goes beyond the usual tax software calculation guarantees. Many Canadian tax filers use this option, because they know that its true purpose is to buy a piece of mind; should you get audited by CRA, you will be represented by a tax professional who will handle your dealings with the taxman.

Article source: Expert Articles