Tax season is upon us! Once again, it's time to dig up receipts stained by coffee, T4s, and any RRSP contribution receipts. I am not a very organized person, so my receipts and any tax related slips are never in the best condition. However, I don't lose them very often, because my strategy is to just put whatever I receive in my purse. You may think "Yikes! What will you do if you lose your purse?". That is a genuine concern on my part as well, but it seems to be the only way I can keep track of important financial documents.
At this point, I have all my pay stubs, my palm pilot, and donation receipts in my purse; in addition, I have a lipstick and lip balm, which come in handy if I can't find a pen.
Most likely, I will be receiving a small tax refund this year, and I have begun to think what to do with that money.
I can....
Re-invest in RRSPs
Spend the tax refund on a distance education course that can increase my web skills
Pay for my fiance's Open Water Certificate scuba diving course in March
Purchase additional stocks or mutual funds
Put the refund in a GIC (term deposit) for 5 years
Pay for our trip to Fiji in April
Do absolutely nothing and leave it in our savings account
Donate 10% to a charity
Purchase gold bullion bars since they are now eligible investments for RRSP
I like the idea of reinvesting the money back into RRSPs, either in mutual funds or gold bullion bars. The US deficits is growing, and the economy is at a slowdown, and teh US dollar is weakening and all these factors will push up the market value of gold. The Millenium Bullion Fund is Canada's first and only mutual fund that holds physical silver, platinum, and gold bullion. Even better, it is the only one that is RRSP eligible. I will have to look more into this.
I have also taken the action of contributing more into taxes next year. With two full-time jobs, I am doomed at tax seasons. Then, I started to think about the opposite end of the spectrum. What if I do the opposite and pay less in taxes?
The idea behind this thinking is giving taxes to the government is like giving the government an interest free loan for the year. They hold the money and then give back what is owed to me after tax season. If one is good at financial management, the otherwise withheld taxes can actually be invested early in the year. A tax refund is basically your overpayment to the government, and it's money that should have been yours in the first place. If you are interested in a tax reduction, you can fill out a request to the Canada Revenue Agency and have less taxes deducted from your pay cheques, so you can have money earlier to reinvest. As far as I know, this can also be done through the IRA,
