Evelyn Jacks: Don’t pay more taxes than necessary

You may not be able to control the economy but you can control the amount of income taxes you pay.

The growth of wealth in your lifetime will occur naturally if you do some of the right things. But the capital you accumulate — your savings — can fall victim to the eroding effects of inflation and economic uncertainty if you aren’t careful. Fortunately, under our system of self-assessment, it is your legal right to arrange your affairs within the framework of the law to pay the least possible taxes. So, to secure your own future and that of your heirs, be tax-efficient and protect earnings and savings.

This is very important because — even though you may not see your financial affairs this way — your provincial government may consider you “rich” for income tax purposes and you’ll be in line for the new, “high-income surtaxes” on withdrawal of savings as a pension or on money that’s left unspent.

So, when you complete your tax returns, be tax-efficient. If you discover you have overpaid your taxes, you can request adjustments to prior filed federal T1 returns within 10 years after the end of the taxation year being adjusted. Adjust your tax return by following these instructions:

• If you think you missed claiming something on a previously filed return, call your tax practitioner to make an adjustment, or do it yourself using form T1-ADJ, available on the CRA’s website.
• You can also make an electronic adjustment on the CRA website. Log on to “My account” and choose the “Change my return” option.
• Have supporting documentation available in case of audit.
• Never file a second tax return.

It’s Your Money. Your Life.  File a tax return each year on time to recover tax refunds and preserve wealth. You can even recover “gold” from prior years by adjusting previously filed returns. Many taxpayers miss claiming all the deductions and credits to which they are entitled. Be sure you’re not one of them.

Evelyn Jacks is the best-selling author of Jacks on Tax, Your Do-it-yourself Guide to Filing Taxes Online and Essential Tax Facts, Secrets and Strategies for Take-Charge People, available at www.knowledgebureau.com and better bookstores.