Ready, Set, File!
February 09, 2015
For roughly 4,400 of our members, 2014 marked their last year of teaching and the start of their retirement.
If you're among them, the final school bell signalled the start of a new life. Filing your taxes has likely been a distant thought.
Now that tax season is upon us, we're offering you a few tips to avoid any shocks when you file your first tax return as a pensioner.
1. Gratuities don't mean tax-free.
Some of you may have received lump sum payments, or gratuity payments, from your employer. These are considered taxable income, unless they're transferred into a Registered Retirement Plan. Be sure to budget for the applicable taxes, if you opted to keep the cash.
2. More than one source.
You've likely gone from one income stream to multiple income streams. These could include Canada Pension Plan, Old Age Security, re-employment income, or investment income. If this is the case, you may find yourself owing when you file. To avoid this, you can get ahead of the tax collector and increase the amount of tax taken at source from your Teachers' pension.
3. Finding the right split.
If there's a discrepancy between you or your spouse's retirement income, it may make sense to split it when you file. Consult a financial advisor or the Canada Revenue Agency to determine the optimal split, as it's not always 50/50.