Would you like a little extra money to spend during the upcoming holiday season?
Then let form T1213 be my early holiday gift to you. If you have had quite a few tax deductions and credits so far this year and/or are expecting significant deductions and credits before the end of the year, chances are you will end up with a tax refund next spring or early summer. But there's a way to get your hands on this money now rather than giving Ottawa an interest-free loan (you don't really have to give the government a holiday season gift). Until recently, you could get this form mailed to you by calling a Canada Revenue Agency tax office. Now it's available only electronically at cra-arc.gc.ca.
Very simply, this form allows you to list the deductions and credits you have claimed so far this year or expect to claim before Dec. 31. The tax office then gives your employer permission to withhold less tax from each paycheque now, the total of those "raises" equalling the tax refund you would otherwise receive after you file your 2015 tax return next year.
If you are retired or otherwise pay tax through quarterly installments, you should be able to reduce your final installment by the amount of the expected tax refund. Again, money in your pocket rather than in Ottawa's.
It can take a few weeks to process the T1213 so the sooner you apply the better.
Typical deductions and credits include RRSP contributions (excluding those deducted by your employer from your pay), child care expenses, support payments (documentation required), carrying charges and interest expenses on investment loans, rental losses, medical expenses, donations, employment expenses (you will also need to complete forms T2200 and T777), foreign tax credits, moving expenses (related to moving to take up a new job), tuition, education and textbook amounts, and buying back registered pension plan contributions for past service.
Mike Grenby is a columnist and independent personal financial adviser. Email: [email protected].
