Prepare family tax returns together

Zoomer | October 1st, 2000

During the 1990’s, Canada had the highest personal income tax rates of the G-7 countries. It is therefore important to do what you can to reduce taxes now and get a good start in a tax savings direction for the new century.

You can begin to take control of your after tax dollar by preparing all family members’ tax returns at the same time. Start with the lowest income earner and finish with the highest earner in the family. In this initial stage, record all basic information in the heading of the return for each member, and calculate both net and taxable income figures. Finally calculate federal and provincial taxes. Then sit back and take a hard look at your family’s tax bill as a whole.

Can you reduce it, or increase refunds expected, with additional RRSP contributions? Perhaps you can save even more by double checking calculations for the Spousal Amount, or in the case of single parents, the Equivalent to Spouse Amount.

Perhaps you are missing credits as the Age Amount, the pension income amount, or credits for full-time students or disabled persons? Ask yourself every year whether it is better to claim the medical expenses on the lower earner’s return, and crities on that of the higher earner’s?

By looking at current tax provisions and how they relate to your family , you’ll increase your after tax returns in both the short and long term!