I remember February 29th as being a very important date to me. I would make an appointment 2 weeks in advance, get all dressed up and head to the bank. I would meet with an “advisor” telling them what my intentions were and they were very happy to help me. I threw down a few thousand dollars that I had in my savings and then walked out with a tax receipt and a smug look on my face thinking I had beat the system. In a month or two I would be getting a fat cheque from the Government. Hello free money! Boy was I wrong…

Now that I’m financially aware, my thoughts on tax time have changed big time. I no longer hold February 29th in mind because I no longer make extra contributions. I value my money way too much to let the government latch onto it with their “We’ll get you …later” tax program.

Don’t get me wrong, I still use RRSPs but I like to think that I’m just being more smart with my money. My work has an RRSP program where they will match up to $1.50 an hour to anything I contribute through the program. I contribute the maximum amount that they will match and I leave it at that. They have it set up so that the money I would normally get back at the end of the year is equally distributed to me on each paycheque. That means instead of the Government holding onto my money throughout the year, making interest and spending it on God only knows what, I get to spend or invest MY money right away.

I have heard a lot of people ask their employer to take extra money off each month so that they get a large sum back when they file their taxes. I’ve never heard of anything so ridiculous and asinine in my life! Why would anyone give the Government their own hard earned money when it could have been used to pay down debt or used to make interest or dividends? It sounds very silly to me!

This year I have to pay taxes on some capital gains as well as for contributions from my company’s stock purchase program. In the past I would contribute more money to my RRSP so that I would not owe any taxes to the Government but I’ve decided to face the music now so that I won’t have to pay the piper later. With the capital gains I chose to fight fire with fire and used some capital losses to negate them. As for the stock purchased through my company I still have to pay taxes on money I have never received. Yes I still own the shares but it sure hurts paying taxes on money that is stuffed away and that I only see it on my computer screen.

Taxes are a fact of life. RRSPs allow you to differ taxes until your older but don’t be fooled, the Government will get its money one way or another, now or in the future. I prefer to rip the bandage off quickly rather than face a long drawn out event that I know will happen eventually. Paying extra taxes is a sign of victory, not defeat. It means you are making money and last time I checked, making money is a good thing.

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