Preparing for tax season early can prevent unexpected issues for Quebec residents. Financial expert François Gagnon emphasizes the importance of timely actions, such as maximizing contributions to the CELIAPP and organizing medical receipts. Understanding available tax credits, especially for caregivers, and wisely utilizing TFSA contributions are crucial. Additionally, reporting capital gains and losses by December 31 is essential for accurate tax filings. Early planning and organization can lead to a smoother tax season ahead.
Get a Head Start on Your Tax Return
Although tax season may seem far off, now is the perfect time to begin preparing your tax return. Delaying these preparations can lead to unexpected challenges for many Quebec residents come March, especially if essential transactions such as withdrawals, deposits, claims, or contributions are overlooked before the crucial December 31 deadline.
“The objective is to be ready for spring,” shares financial expert François Gagnon during an interview. “Certain tax credits have a cutoff date of December 31.”
“While our focus is currently on enjoying the holiday season, we must also prioritize tax planning,” he emphasizes.
To help you navigate the upcoming tax season without any surprises, here are five valuable tips from Mr. Gagnon.
Maximize Your Contributions to the CELIAPP
“For younger individuals, the CELIAPP is an excellent savings tool that combines features of both the RRSP and TFSA, enabling tax-efficient savings. You can contribute a maximum of $8,000, but it’s critical to do so by December 31,” advises Gagnon.
“If you wait and make your contribution on January 2, you will miss out on the opportunity to deduct it from your 2024 tax return. Timing is essential!”
Organize Your Medical Receipts
“I frequently encounter clients in March who have misplaced numerous receipts. This is why early planning is key,” notes Gagnon.
“When you collect your last prescription of the year, request a comprehensive receipt for all medical expenses from the pharmacy or obtain a detailed report from your insurer. This proactive approach ensures you don’t overlook any expenses that could be claimed.”
Understand the Tax Credit for Caregivers
“Many people believe that government assistance is lacking, but that’s simply not the case. There is a wealth of support available, though claiming some credits may require a bit more diligence,” Gagnon explains.
“For instance, if you care for a relative dealing with a degenerative condition or illness, you may qualify for the caregiver tax credit, especially if the individual applies for the disability tax credit. This process can streamline your claim,” he adds.
“People with diabetes, particularly those with type 1, can automatically qualify for the disability tax credit. Ensure your doctor completes the necessary forms, as this could lead to significant savings.”
Utilize Your TFSA Wisely
“Unlike the CELIAPP, which has a December 31 deadline, both the RRSP and TFSA allow contributions until March 31 of the following year,” Gagnon states.
“The TFSA contribution limit for this year is $7,000, which adjusts annually. If you intend to make withdrawals, do so before December 31, as any withdrawals will affect your contribution limits for the next year. For instance, withdrawing $2,000 means you could potentially contribute up to $9,000 next year if the limit increases to $7,000.”
Claim Your Capital Gains and Losses
Remember, you have until December 31 to report any capital gains or losses for the year 2024. However, it’s crucial to calculate these figures three business days in advance to ensure accuracy.
For more detailed guidance, check out the video linked above.