While the deadline for filing income taxes has passed for the United States, in Canada we have until April 30th to file. Honestly, I have never filed my taxes this late – we always get a refund, and usually a decent one (several hundred up to a couple of thousand dollars). I file as soon as we have all our paperwork in order, and our money is usually in the bank by the third week of March.

This year, unfortunately, for several reasons, we are not getting our usual refund. Why not?

1) Bruce & I both picked up a couple of small side hustles last year, so we have to pay taxes on those earnings.

2) We no longer have (tax deductible) child care for our youngest son.

3) I did not contribute as much as usual to my RRSP (Registered Retirement Savings Plan).

4) My son moved in with his dad, so I could no longer claim him as a dependant.

5) We had significantly less charitable donations last year to deduct.

I’m sure there may have been one or two other reasons that contributed to this, but in the end, the only thing that saved us from owing almost $1000 between us was a property tax deduction that we normally wouldn’t have been able to claim (it related to our new house). Because of that, although Bruce still owes a little, I’m getting just enough back to cover the amount he owes. Net result? ~$0, give or take $20.

I know that many people argue that a large tax refund is nothing more than an interest free loan to the government, which is true. But as someone who struggles to save, I like getting a nice fat cheque once a year – it either goes to reduce debt or to allow us to purchase something bigger than we need.

The other half of that is that owing money is a budget hiccup when you don’t expect it. The amount Bruce owes is small – less than $150. We could have covered that even if I wasn’t getting money back. But originally we owed almost $1000 – that would have been really hard to come up with, and would probably have led to us taking on more debt to pay for it.

So what are we doing to make sure we don’t owe next year? Well, a few things:

1) I’ve changed my deductions at work. I had claimed 3 dependants, but now I’ve changed it to zero. This means I pay more now, but it will give me a cushion at tax time next year.

2) This year I am doing automatic charitable contributions every pay period, so I will have that deduction next year.

3) When Bruce & I look at side hustles, we are setting aside a portion to cover taxes to be safe.

I’m sure other things will crop up over the next 12 months, but I have no intention of owing a large amount of money next year. We’ll see if my planning works.