It’s Tax Time Again

During the month of March, the COMPASS blog is providing space for questions and reflections related to taxes. Today we welcome Sandy Crozier to share her reflections. Sandy Crozier is the Director of Stewardship Development for The Free Methodist Church in Canada and a member of the COMPASS Steering Committee.

Sandy Crozier, Stewardship Development Director of The Free Methodist Church in Canada

Sandy Crozier, Stewardship Development Director of The Free Methodist Church in Canada

I am what is known as a “First Generation Canadian”. This means that I was born in Canada – but my parent wasn’t. You wouldn’t think that has anything to do with taxes, but you would be wrong. You see, my mom was Russian, and she had an enormous mistrust of government. Any government. Including ours. In fact her parents also had this same mistrust. They did not ‘register’ her birth for three weeks! This is why my mom had two birthdays – but that is another story. This mistrust of government ran under the surface all year round, but would start to come to a head around tax time each year. There was an uneasiness around the house. Tempers were short. Growing up we knew to stay out of sight around ‘tax time’.

So when it comes to tax time in our home – I have an inherited disposition to panic. But I am happy to let you know that there is hope. In fact, I prepare all our household taxes now. Here are some things I learned along the way that you might find helpful.

Don’t Panic…

Jesus tells us again and again ‘Fear not’. The Bible tells us that “this is why you pay your taxes, for the authorities are God’s servants, who give their full time to governing” (Romans 13:6). They are not out to ‘get you’ (no matter what my mother thought!). If you are prone to panic, then you may want to consider using the services of a tax preparation company, or a tax software that does all the math for you. If you are a single young adult that just needs moral support, then get together with group and have a ‘tax party’ where everyone pitches in for a software package that does 10 claims for one package and get some pizza and have fun!  It will at least make filing your taxes a little less stressful!

Don’t Lie…

As Christians, we are to reflect the image of God in all we do – including how we file our taxes. Plus when you lie or cheat in order to pay fewer taxes, you are stealing from your neighbour.  The taxes that are collected is what is used to provide hospitals, health care (in Canada), schools and special programs for those in need, programs and activities for your family, garbage collection to keep your neighborhoods clean, park lands to remind us of the beauty of God’s creation.

Get Organized and Start Early…

Start a file for all your tax information and receipts early in the year. Keep it in a safe place, but keep it accessible to file and update the information throughout the year. If you take a few minutes every month it will save you hours come tax time. Keep original receipts and write notes with them – trying to recall why you saved this receipt is not always easy months later and under the stress of tax time.

In Canada, if you file electronically, you do not send in the original receipts. But the government can request that you provide the backup for any claim you submitted. However, if you mail your taxes in each year, you must submit all the original receipts. In the United States you do not need to submit original receipts, but if you are going to claim deductions, it is important to keep those receipts in case of being audited. It is highly recommended that you make copies of any documents you submit with your taxes and keep them in a clearly labeled file.

Claim Medical Expenses…

Medical expenses that can be claimed on your tax return include (but are not limited to) prescription medications, dental services, psychologists, physiotherapists, attendant care, and a portion of assisted living home costs. Check out these links for more on potential medical expense deductions in Canada and the United States.

Find out What’s New…

Changes are made every year with taxes. Don’t miss out on an extra refund from the various layers of government because you didn’t know about a new credit. (Check out these links for some of what is new this year regarding taxes and returns in Canada and the United States.)

But err on the side of caution – if you qualify for a tax credit, then claim it but if you can’t prove or validate an expense, don’t.

Be Generous…

Giving simply to get a tax benefit is not why you give – but it can make a difference on your taxes. And if it results in a higher refund, you have more to be generous with. As with any deduction that you might claim, make sure that you have documentation to prove it.

Be On Time…

Always file your taxes on time. Even if you are waiting for documentation, you can always submit an adjustment. Filing late will mean penalties, fines and interest charges if it turns out that you owe money. And make sure you double check your submission before you send it in. The government will not correct your mistake.

So despite my inherit disposition to mistrust the government and panic, tax time can be healthy. It allows us to account for the year and steward all that God (and the government) have for us.

Take a deep breath. Pray. And do your homework, stay organized and know what credits/deductions/options are available to you. Get help if you need it and double check everything. Be like the men of Issachar who understood the times and knew just what to do (1 Chronicles 12:3).

This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.

1 thought on “It’s Tax Time Again

  1. Pingback: This Week’s Links « Timothy Siburg

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