If you look at how much tax you’re paying now and think ahead, you could save some extra dollars down the line.
“If you will have excess tax deductions or non-refundable tax credits in 2009, request reductions in your payroll income-tax withholdings early in 2009,” says Chartered Accountant Ruby Lim, Senior Manager at PricewaterhouseCoopers LLP in Toronto.
Employees claiming tax deductions or non-refundable tax credits (that will result in a refund of income tax) can complete Form T1213 to request reduced payroll tax deductions. This may apply to employees claiming deductions for registered retirement savings plan (RRSP) contributions, childcare expenses, support payments, employment expenses and/or carrying charges and interest expense on investment loans. It may also apply to employees with non-refundable credits for charitable donations and tuition fees.
“Alternatively, employees with non-employment income can request to increase the amount of payroll income tax withheld. This will avoid tax owing for the year that may trigger interest expense and/or penalties,” advises Lim.
Brought to you by the Institute of Chartered Accountants of Ontario.
The Institute of Chartered Accountants of Ontario is the qualifying and regulatory body of Ontario’s 33,000 Chartered Accountants and 5,000 CA students. Since 1879, the Institute has protected the public interest through the CA profession’s high standards of qualification and the enforcement of its rules of professional conduct. The Institute works in partnership with the other provincial Institutes of Chartered Accountants and the Canadian Institute of Chartered Accountants to provide national standards and programs that are used as examples around the world. </em>
