The end of the year is just around the corner. For many employees, company benefits follow the calendar and roll over January 1st. Have you taken advantage of all your company benefits have to offer? Here are some tips to get most from your employee benefits.
Most company health insurance packages have yearly limits that reset at the end of the year. Whether its medical or dental benefits, consider maximizing your limits before December 31:
- Book a cleaning or checkup with your dental centre. Don’t forget about your spouse and kids too.
- Schedule an eye exam and/or order new glasses or contacts before December 31st.
- If your doctor has recommended a chiropractor, physiotherapist, or massage therapist, and you’ve been putting it off, go now. You may require a course of treatment that exceeds the yearly limit so get started before year end to use this year’s limit up.
Don’t forget that any co-pay that’s out of pocket for you may qualify as a medical expense at tax time. Be sure to keep any receipts. If you pay part of your medical insurance premiums, claim that too.
If your company matches your RRSP contributions, check to see what limits, if any, apply. If you’re below the limit, consider maximizing your contributions before year-end. Not only are you beefing up your retirement fund with the additional matching, your extra contributions further reduce your net income at tax time.
From clothing allowances to higher learning, do you know all of the benefits your company has to offer? Check your employee handbook or consult with the company benefits officer to find out any benefits you may have overlooked. Yearly limits may be in effect so be sure to investigate before the end of the year. These benefits may include:
- Reimbursements for steel-toed footwear, prescription safety glasses, or other personal protective equipment.
- Tools allowance for those with trades including power saws for forestry employees or hand tools for carpenters, mechanics, etc.
- Uniforms allowance if your employment requires special clothing.
- Reimbursement for tuition. Check into online courses which can start at any time during the year.
- Bursaries/scholarships available for your children. Many times these benefits roll over at the end of the year.
- Laptop/cell phone upgrades.
- Public transit pass reimbursement.
- Matching programs for charitable donations.
Does your employer offer any other benefits you haven’t used? Depending on the size/type of your company, you may be missing out. Many larger companies offer discounts with partners. With the holiday season upon us, it’s worth investigating.
Update Your Tax Profile
The amount of income tax that’s deducted from your paycheque plays an important part in determining your tax bill (or refund). Changes to your personal tax profile have an effect on your bottom line at tax time. Next year, are you planning to
- Pick up a second job?
- Start a freelance business or side gig?
- Purchase a rental unit or rent out part of your home?
If you answered yes to any of these questions, your tax situation will change. Fill out a new Form TD1, Personal Tax Credits Return (available from your employer) to reflect your new tax profile. By adjusting the amount of tax deducted throughout the year, you could avoid a hefty tax bill next year. Other life changes that could affect next year’s tax return include
- Changes to your marital status.
- Starting or finishing university/college.
- Eligibility to claim certain credits such as tuition transfers, childcare expenses, or caregiver amounts.
If you’re not sure what changes to make to your Form TD1, the Canada Revenue Agency has a handy tool to help. Use CRA’s tax deduction estimator to determine what changes (if any) you need to make.
References & Resources
Jennifer is the Social Care Manager for TurboTax Canada. When she’s not helping customers on Facebook, Twitter, and TurboTax’s community forum AnswerXchange, Jennifer is busy researching the latest tax changes.
Jennifer has been preparing tax returns for over 30 years and enjoys holding tax seminars for seniors in her hometown of St. Vincent’s, Newfoundland.