Income Tax Receivable or Income Tax Payable

Income Tax Receivable or Income Tax Payable

We are nearly on the period of the year at which the Canada Revenue Agency anticipates your yearly income statements. Through this, they will distinguish if you have payable on your tax or receivable.

The difference between an income tax payable is that you must repay the Canadian government in about a year, while income tax receivable indicates that you will receive a return of some of the amount you paid to the government. Understanding both instances and how to ensure that you get a return is an action plan that you need to consider. If you prefer to get a return rather than payable, make sure to check the information stated as follows.

Ways To Get A Tax Return

Well of course, most likely you would prefer getting a tax return than payable, to do so, here are some ways that you can take:

RRSP’s and TFSA’s

You might have an idea about how important are RRSP’s and TFSA’s accounts on your finances; however, you should know that the money you set aside every year can assist you in terms of a tax dispute. You are not to pay any taxes on what you earn in your TFSAs. Also, if you prefer, the savings from your RRSP can be subtracted from your taxes.

Children’s Expenses

The government will also take into consideration f you are full time working and sending your children to daycare. You can submit receipts showing the cost of these expenses that allows you to save some money. Besides, if your child is under 16 years of age, there is a tax credit for certain fitness and art class. You can make this claim provided that the amount does not surpass $250 with a limit of $500. Moreover, you should know that special classes such as guitar lessons and soccer fees are also covered.

Medical Expenses

It is true to everyone that medical expenses can take out much of the budget and spending of the household. This is especially true for those who are in a tight budget. Having to spend an additional dollar to medical expenses is considered as an additional load to carry. However, you should know that most of these medical expenses are refundable. You may need to check the list of medical expenses that are covered by the government. Moreover, you should check on DTC or Disability Tax Credit and see if you can save some on this matter.

First Homes

You must be aware that you can’t get a non-refundable tax credit if you buy during the year of tax submission. The amount at stake is usually $5000. You can claim this amount if you can present the required documents.

Charitable Donations

If you’re fortunate to donate any amount which is over $200, you can seek an income tax return. Moreover, if you wish to level up the return amount that you will get, you can compile your receipts for 5 years and have it submitted together. Of course, you have to make sure that your donation is channeled to a verified organization with their charity number attached.

Other Deductibles

Apart from the information listed above, you might need to check if there are still deductible in your tax bill. This is especially helpful if your an individual entrepreneur or a small business owner. There are certain information that you need to know in terms of self-employment and small business taxes. Keeping yourself aware of these things will give you tips on what to do during tax season.