The Tax Season Effect

As tax season starts to ramp up I begin to notice a serious correlation between people’s moods and tax balances.  I call it the Tax Season Effect!  This is pretty much what happens:

Step1: People do their taxes

Step 2: Program/person tells them their balance

Step 3:   Refund = absolute bliss / Owing = pure disappointment

 And personally I completely understand.  Who actually likes to pay bills?  Like when you open your hydro bill are you anxiously smiling thinking “oh my gosh what could be inside? I can’t wait!”  Chances are probably not, and if you are excited I would like to extend my congratulations – you are a rarity my friend.

 Taxes are a pain in the butt, but maybe I can offer some advice to help you ease the pain.  If you more often than not owing taxes considering the following strategies:

• Make sure to have all your deductions ready: medical expenses, rent/property tax, employment expenses, daycare providers, school credits etc.

• Consider saving money in a RRSP to reduce your taxable income

• Ask your employer to take off extra taxes

• Have a high interest savings account that you make monthly contribution towards a potential tax bill from additional income not taxed such as interest revenue, dividends, capital gains

Any of the above strategies will help you reduce/contribute to your tax balance and hopefully keep you in a better mood.