Most people focus all their efforts to find and organize their receipts around tax season.
But if you take the time to regularly file important papers relevant to your taxes through all the other seasons, you will be less likely to miss out on allowable tax deductions.
For example, we are in back-to-school season and many teachers end up spending quite a bit of their own money on school supplies for their classroom. There are things that they feel just must be there, but they cannot get funding from their administration’s tightly allocated budget.
Teacher credits often missed
If those teachers save their receipts, they may be able to recover some of their expenses using the refundable tax credit for teachers introduced a year ago.
Formally known as the “Eligible educator school supply tax credit,” it is found on page 4 of the T1 General Tax Return.
People eligible to claim it are teachers in elementary or secondary schools as well as certain early childhood educators in child-care facilities that are regulated. The items you claim must be consumable supplies that are used to teach children in your place of work.
You can claim 15 percent of your total purchase to a maximum credit of $150 for $1,000 spent.
To claim it, you need a written certificate from your employers who can verify that what you bought was used in the classroom. Most teachers claiming this just get their employers to sign their receipts.
Save your new home purchase papers
Another deduction sometimes missed is the $5,000 claim first-time buyers of houses, condos or mobile homes can make. It is designed to help pay for some of the associated costs of making a home purchase, such as closing costs, and can put a $750 refund in your pocket.
Keep your moving expenses in order
If you moved further than 40 kilometres in a year, you can claim your moving expenses if you have all your receipts plus a letter from your employer verifying that they did not pay for your move.
While a lot of established workers claim this, many students who have been living in their university town do not realize they can also claim it if they move to a new location to work.
Medical expenses add up
If you have limited health insurance or none at all, your medical expenses for such things as routine dental and eye checkups can really add up. You may need physiotherapy or medications that are not covered by your plan.
Again, these can put money back into your pocket but only if you have receipts.
How do you keep all your receipts organized?
To make sure that you get all that you can in tax refunds, I recommend that you start today to create an organized system. You don’t need a multitude of files, but it will make tax season easier if you have at the minimum files for house expenses, car expenses including gas, medical expenses, and work-related expenses and/or university expenses.
There is always something that doesn’t fit so create the “Other” file as well. These receipts tend to add up quickly, so I suggest an “Other” file for each season of the year.
When tax season comes, your work is almost done. If you are doing your own tax return, your job is simplified. If you are using a certified tax specialist, they will be better able to ensure that you get every possible deduction.
Certified professional bookkeeper and certified tax specialist Elena Ivanova is managing director of Piligrim Accounting Inc., a national accounting and tax preparation service based in Richmond Hill, Ont. You can reach her at email@example.com.