During tax season may Canadians can benefit greatly from receiving their hard earned tax refund. Not everyone gets a tax refund, and as we all know some of us have to end up paying tax back..With this blog, we’re going to go through four simple steps that can be used to help lower your taxes and potentially help you receive a tax refund.
This tax season many recent changes to taxes, new benefits, credits, and deductions have been introduced. If a person is unaware of all these changes it can be hard to decide which of these will help reduce your tax refund. Here are some tips on how to help your chances at receiving tax refunds.
What is a tax refund?
A tax refund is a refund of taxes assessed on your return for the year. It is issued by the Canada Revenue Agency after your return is filed and assessed. You can get a tax refund if you paid taxes throughout the year that end up being greater than the income tax that was deducted. The amount of the refund will depend on the amount you paid in taxes.
When you file your taxes, you’re required to supply the Canada Revenue Agency with your T4’s for the year, and any other tax forms you need to declare. If your taxes are filed, then you may be able to get a refund, or at least even if you end up owing, you still could receive other benefits like gst, child tax , etc. However, not filing your taxes, you will not be eligible for a tax refund, and most if not all other benefits will be withheld.
How to reduce your tax refund
One of the most common questions Canadians ask themselves when filing their taxes is “How much of my tax refund can I claim?” In order to find out, it’s important to be aware of what you’re allowed to claim. On your tax return, you will find a line that contains the different tax credits you are eligible to claim. These credits vary for individuals, they are based on the number of children you have, income you make, where you live, etc.
Utilizing this information to calculate your tax refund is a crucial step. In order to figure out how much you are entitled to claim, you’ll need to first calculate how much you paid in taxes. You can do this by subtracting your income from the total number of paid taxes. If you had a tax refund, then you’ll need to subtract that from your income. This will show you how much you need to pay before you can start claiming credits.
What are the average Canadian tax refunds?
The average Canadian tax refund amount is $998- $2,895. That’s why it is important to know how to reduce your tax refund. If you are eligible for certain credits that help reduce your taxes then, your tax refund will increase.
What can you do with your tax refund, besides spending it?
You’ve just got your tax refund and this is a great opportunity. However, what should you do with it? There are a few other things you can do with your tax refund, here are a few suggestions. The first thing you can do is make investments that will increase over time. The second thing you can do is set up a retirement plan, Registered Retirement Savings Plan. You can also just put it in a savings account. One of the best options when receiving a tax refund is to pay off any outstanding debt you may have.
If you have been looking for a new tax refund software, you may have noticed that the Canadian tax refund software market is becoming very competitive. We hope you enjoyed our post about how to reduce your tax refund. Following the advice from this article, you should be able to reduce your tax refund and find a refund software that will help you get the most out of your money. You can learn more about how to reduce your tax refund by visiting our website at Canadian Tax Refunds. Thanks for reading, we would love to hear from you!