Keep your tax records for 7 years.
If you are audited, CRA can back-review your personal income tax returns for three years, or more. Without documentation (as far back as seven years may be requested) such as copies of returns, RRSP contribution slips, medical receipts, support for self-employed revenue and receipts, all preparatory source documents, and T-slips, CRA can summarily assess your taxable income. Do your taxes right, and keep the proof. Avoid paying for past income tax, penalties and interest.

Be detailed in your record-keeping.
Perhaps you have deducted legal fees. CRA may investigate whether they were for personal use or for business use. So long as you can support these deductions with proper documentation, such as a detailed receipt, you'll not create a tax liability. CRA is less interested in your income documentation.

Families should file together.
Filing all family members' tax returns together, allows everyone to maximize the best use of credits or transfer of unused credits from each other's tax return (for spouse, common-law partner, children, certain relatives if they live with you), such as medical expenses which can be claimed on a family basis.

Use the Internet if you expect a tax refund.
Where you have money owing on your tax return, you can file early and make your payment by April 30. If CRA owes you money, they will pay you quicker if filed on the Internet. Where you give them deposit information, money can be deposited right into your bank account. Another advantage is that you will not need to photocopy and send receipts with your tax return. But caution, the downside is that you are more likely to be contacted for a formal review to verify income and expenses not previously articulated by sending a paper return (you may need verification for up to seven years). Discuss this with your accountant.

Reducing a cumulative net investment loss.
What if you have claimed cumulative investment expenses greater than your investment income, reducing your access to the capital gains exemption? Use dividend income to reverse this excess claim and free up access to the capital gains exemption again.

Minimize tax on your fund investments.
Where you earn more than $60,000 income, the tax rate on capital gains is then lower than taxation on dividends. Thus, a higher-income earner should have more capital gains in their non-registered portfolios than interest or dividend generating investments.

You can deduct money borrowed to invest outside of an RRSP during the year. If these investments were inside an RRSP, management expenses, and interest charges on the loan would not be deductible. Therefore, purchase your RRSP with cash assets, and borrow for unregistered investments.

Register for the Child Tax Benefit (CTB).
You can qualify for the CTB by registering any new children, or for a child that moves in with you (for example where he/she previously lived with the other parent, in a separation). List all the children in chronological order, because you can claim a maximum of $7,000 in child care expenses for each child younger than seven; $4,000 for each seven and older, but not yet seventeen on December 31 of the tax year. The purpose of the CTB payments (received tax-free) is to improve the child’s quality of life.

Maintain child support deductibility.
Where a child support payment is now deductible, do not create an adjusted, amended, or new agreement or you will lose your deductibility (anytime after April 30, 1997). If you make this mistake, the payee will get your payments free of tax, while you take no further deduction.

Compare leasing a car to buying.
If you lease a car, you can deduct the entire amount, up to CRA’s maximum (currently $800 plus taxes per month), while considering any tax restrictions relative to your employment, business-use, or an percentage attributed for personal use. When the lease is up, you own nothing, and return the car. If your lease payment is less than $800 before taxes, you may want to renogotiate the amount to that limit with the leasing company to take full advantage of the deduction. This is advisable if you intend to keep the car anyway.

When you purchase, you can write off the interest on your car loan, and you can deduct the capital cost allowance over time. Once the loan is finished, you will own the car. Perhaps do both: lease for the initial period, and buy the car at the end (either with cash or borrow, and write off the interest and the capital cost allowance). This may work well if you have gone way over your mileage and own the leasing company a significant amount upon bringing the car back. Let’s say the car is worth $32,000 to buy at lease-end, but you never planned to buy it – until you find out that you owe $15,000 for the extra kilometers driven. Thinking creatively, you do the math (in terms of car value), and consider the option to buy the car.

If you buy it out, you attribute the $15,000 due for mileage, back into the buy-out equation, purchasing it for a net $17,000 (taxes not considered). If you take the car back to the leasing company, and buy a new car worth $30,000, you will need to pay out a total of $45,000 ($30,000 plus the $15,000 liability) to pay off the lease-end liability, plus buy the new car. View car buying and/or leasing as total expended as you make your financial decisions. It takes time to calculate the best planning, but in the end you’ll be ahead. By buying an extended warranty, a used car bought out at the lease-end could have the maintenance security of a newer car.

Also, when you buy the car, you will not be accountable to the leasing firm for any damage. Where damage exists, you might be forced to have it fixed via your insurer thus increasing your premiums. If you own the car, repairs can possibly wait until you have the extra cash in hand.

Should I use a personal vehicle for work?
If you use a personal vehicle for work, your employer may be able to pay you a tax-free allowance. A reimbursement rate up to 41 cents for the first 5,000 kilometers, and 35 cents on the remainder (depending on province). The reimbursement can make it easier than claiming gas and other bills on your tax return to recuperate your costs.