If you haven’t filed your taxes yet, get on it.
According to Canada Revenue Agency (CRA), the average Canadian received a tax refund of $1,400 in 2008. If you’re teed up for a refund, you’ve got plenty of options. You can give, save, pay off debt or spend it. I’d recommendation a little of each.
Take 10 per cent off the top and give it to your charity of choice. Not only will this make you feel good, but the CRA will issue you an attractive tax credit which can be applied to next year’s tax return.
Take 30 per cent and invest it in your RRSP. You’ll receive another tax deduction for next year’s return. Apply 30 per cent to bad debt such as credit cards, car loans or lines of credit. If you’re lucky not to have bad debt, pay down your mortgage instead. Making an extra monthly or bi-weekly payment each year can shave years off your mortgage.
Use the remaining 30 per cent to reward yourself.