An Overview of Canadian Income Taxes
The tax return can be filed on paper tax forms or electronically using software. Here's tips on where to find a Canadian income tax package, as well as reviews of the top five Canadian tax software programs. The Canadian system requires the use of a security code found on your T1 slips to be eligible for the NETFILE service.
Canada also allows various deductions against the income tax, such as for charity and retirement savings. Charitable donations are allowed "up to 75 percent of your net income." And tax-deductible contributions of up to $19,000 can be made to Registered Retirement Savings Plan.
There's also tax credits to consider as well. One relatively new tax credit is the Children's Fitness Credit for enrolling kids under age 16 in a physical fitness program.
The Canadian Revenue Agency has online services available for taxpayers. Canadians can check the status of their refund, and obtain information about their retirement contribution limits, check their account balances, update their address, set up a payment plan, or disagree with a tax assessment using the CRA's my account services.
Canadian Tax-Free Savings Accounts
Here's the details. Canadians can save up to $5,000 a year in tax-free savings account. Withdrawals can be made at any time, and the funds used for any purpose. There don't seem to be a whole lots of limitations and restrictions, like there are with Roth individual retirement accounts in the US. Contributions to these accounts are not tax deductible, but there's no tax on the earnings and interest. The part I really like is that withdrawals can be made at any time for any reason. That sure beats the 10% penalty Americans pay if they need to cash out their retirement plan early to cover a financial emergency.
A Peek At What's Ahead for Businesses in 2009
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Tax Day Tax Tips
Funding an IRA
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Tips for Finishing up You Taxes This Weekend
If you haven't started your tax return at all, I want to you by-pass all the usual steps like scrambling to find a decent software program or downloading the forms, and go straight to one of these very helpful (and quick to use) applets for estimating your taxes.
Spend a few minutes using one of those Web-based applications, and you'll get a rough estimate of your refund or balance due. Make notes of those numbers, and then go file an extension. If you owe, try to pay the balance due that you estimated. If you have a refund, simply mail in the extension voucher. Filling out the extension form itself takes about a minute. You can also file an extension online in about 10 minutes or less (and for free).
All told, this should take you no more than 30 minutes. With an extension, you'll have until October 15th to file your return. As long as you've paid your tax in full by April 15th, the IRS won't charge you any penalties.
And now that you have eliminated the enormous pressure of meeting the April 15th deadline, you can now focus on picking the best tax software for your needs, finding the tax forms and instructions you might need, or finding more tax deductions or credits that you might qualify for.
Filing Tax Extensions
Tax Credit for Saving for Retirement
Tax Freedom Day Comes Early in 2009
Longley points out that the economic downturn and a spate of tax cutting measures are combining to make taxes slightly more affordable, taking 28.2 percent of our collective income.
Finding Free Tax Software
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