Taxes done- insert BIG sigh of relief here!

Yesterday I was very thankful for a decision I made about 16 months ago.  That decision was to try and determine how much taxes I will owe through self-employment income and put that amount of money away every month in a high-interest savings account.

In Canada, we pay federal tax, provincial tax and Canada Pension. Each month I took a chunk of money and dutifully transferred it into an account that I only use for parking taxes and savings. This isn’t even in the same bank that I use for my day-to-day banking. When I log into my normal bank accounts, I don’t see it.  I know it’s there, but it’s not a temptation for me. I mentioned the other day, I’ve come to accept that it is not my money, I’m merely parking it for the taxman.

Yesterday we poured over the numbers and came up with an amount owing. We also determined an amount to pay in instalments for this year, for which Canada Revenue Agency will come calling for the first one right away. Then there was the bill to the nice fella who helped do the math.

There is just enough money in this parking lot account to cover off all of my obligations.

I feel so relieved. I can’t express how relieved.

For 16 months I only hoped I was putting away a proper amount of money. I’m not a tax expert. I’m not even good at filling out the form. That’s a long time to be doing something just on faith, and hoping to heck it works out. Did I mention I’m relieved?

What I also learned is that the amount I put away is almost exactly the right amount, and for the year ahead, I’ll simply stay the course.  That’s also good news. It means no budget modification based on yesterday’s assessment. The only thing I actually did adjust was anticipated interest revenue.  Although they call it “high-interest” you know “high” is a relative term these days. The money I collected on the larger balance in that account will basically disappear come April 30th, and it’ll build slowly again from quarter to quarter.  That’s fine – it’s only a few bucks anyway.

Over the last couple of weeks I was secretly hoping I may have tucked away a bit too much money so I could put a few extra bucks toward debt retirement or replace the kitchen floor I’ve come to loathe. But there isn’t enough for either of those things. When I told my daughter that the floor would have to stick around for a while, she said “there’s always next year!”  She’s exactly right! It’s a reasonably small expense, and next year when the debt is gone, I can plan that expense and save for it.

There is a bit more good news from yesterday’s session too. I had forgotten the government would be providing taxpayers with a $1000 cheque for the Harmonized Sales Tax to be introduced in July.  So in July, a month when I pay the mortgage three times instead of two – a month that the mortgage just cripples my budget, I’ll get a little relief thanks to the HST pay out. Most of it will go to debt retirement.

My taxes have been a little black raincloud following me around for the past few months. It’s good to see the clouds clear, see the sun shine and hear the birds sing again! How are things with your taxes this year?

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One response to this post.

  1. That’s terrific that you were able to calculate close to the right amount of taxes! I can’t imagine what a relief that must be to have the money there, ready to pay when they come calling for it ;o)

    We did very well with our taxes…my middle son is classified disabled and since I am single too, I get to claim a lot for him (equivalent to spouse and disability amounts transferred from him). It all went to either debt repayment or towards the closing costs on our new home.

    The $1000 will come in handy for us too…we’ll be putting it into closing costs too.

    Reply

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