Millennials have a different approach to the workforce compared to previous generations.
They are career explorers, trying different things and always developing new skills. Whether they have a desire to travel, want to explore different avenues that play to their strengths, or are going through a life change, millennials generally gravitate towards the new.
And with new come a lot of changes. Some are great and exciting, but there are also practical matters and financial factors to consider before making a change.
No matter how often you decide to switch gears, it’s a good idea to understand how an upcoming shift will affect you financially, and how you can best prepare for that.
Manage the transition
When you start a new job, it can take time to get used to managing your finances in a new way. Maybe youre paid on a different schedule than their previous job, or your take home pay is different.
One thing that can shift drastically is how taxes impact cash flow. When in a career transition, it’s important that you have everything in order and understand any regulations that apply to you in this new job and how you are taxed.
For example, it’s pivotal that you understand how your Canadian Pension Plan and Employment Insurance are affected. When you start a new career, the contributions you make to these accounts reset for the fiscal year. This does not mean that your contributions disappear, just that the amount you put into it automatically resets to the minimum.
If your previous employer had a retirement savings plan, stock purchase plan or other employee benefits plan, make sure you understand what is required when you leave the company. Employers may require you to transfer funds out to your own savings plan or allow you to stay in the current plan. Understand your rights and obligations under the plan, as each one has its own complexities and requirements.
You’ll want to know exactly what your new position qualifies you for in terms of deductions. If you’re a freelancer or consultant, you should look into deductions for expenses you incurred while on the job. If your new job requires you to relocate more than 40 kilometers so you can be closer to work, you can deduct some moving expenses.
Youll also need to make sure you understand the benefits that come with your new job. Your medical benefits and savings plans could be drastically different than in your old position, so it is important that you explore these plans and find the answers to any questions you may have. And make sure you sign up for these programs as soon as you can so you can take full advantage during your time with that job.
Use the proper tools
These financial matters may seem complicated, but never fear. There is a plethora of products offered by TurboTax, which can help guide you through the transition and ensure you’re getting the most out of your tax return.
TurboTax Free can help you easily fill out your federal taxes and Quebec taxes, if that’s where you reside simply and properly. Its all laid out so that you can understand exactly what personal information you need to input, and which slips need to be filled out.
With the Auto-Fill My Return tool, you take the information from forms like your T4 and RRSP and import it automatically into the right place on your return. Then it’s easier for you to fill out the rest. This makes the whole process painless and quick, and you’ll know you’ve filled everything out correctly.
The TurboTax Free Suggested Slips tool asks simple questions about you, then suggests the forms that you should fill out for your particular situation. This eliminates the worry and confusion surrounding all those various forms.
An added bonus is that you can use these tools on the go. TurboTax has multiple offerings that work on different devices, so you can be sure that you’ll find one that is right for you.
With a variety of great tools and features, it’s no wonder that TurboTax is Canada’s top selling tax software and has helped Canadians fill out some 27 million returns since 2009. Check out the product list and see how TurboTax can help you this tax season.
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