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Registered Disability Savings Plan (RDSP) Income
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If you have received income from an RDSP, the income will have to be
reported on your tax return but it will not be included in your
calculation of GST/HST credit, CTTB tax payments, refundable medical expense
supplement and the Working Income Tax Benefit eligibility.
Senior Homeowners’ Property Tax Grant
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You may be eligible for this, if in 2010 you were
64 or older, owned and occupied and paid taxes in your principal
residence and you meet the income requirements. When completing your
personal tax return, complete Form ON479 and ON-BEN to see if you qualify for the
grant.
CRA Service Complaints Program
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If you have not been able to resolve a problem with CRA, you have the
right to make a formal complaint using Form RC193. Service related
complaints may include undue delays, misleading information, staff
behaviour, mistakes leading to omissions or oversights.
Air Miles
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If you use air miles earned from an incentive program, for personal use
you will be deemed to have received a taxable benefit if those points
were earned as a result of expenditures paid for by your employer. To
avoid this situation, make use of these air miles strictly for business
use on behalf of your employer.
Tax-Free Savings Account
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The 2008 Federal Budget introduced a new Tax-Free Savings Account,
which, beginning in 2009, allowed Canadians who are 18 and older to
save up to $5,000 per year in the TFSA. For tax purposes, investors will
not be allowed to deduct contributions to a TFSA as they do with RRSP’s.
However, investment income, including capital gains earned within the
TFSA will not be subject to tax, even when the funds are ultimately
withdrawn. For additional information, please contact us. The Guaranteed Income Supplement
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The Guaranteed Income Supplement provides extra money to Old Age
Security pensioners with a low income. Because the Supplement is based
on marital status and income, you may qualify now, even if you did not
qualify in a previous year. The Allowance and the Allowance
for the Survivor also provide extra money to eligible low income
individuals aged 60 to 64. Call 1-800-277-9914 for more information.
Get the most from your Canada Pension Plan
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If you had low or zero earnings during the time that you were raising
children who were under the age of seven and born after December 31,
1958, the Child Rearing Provision could help you qualify for a benefit
or have your monthly benefit amount increased. Contact Service Canada at
1-800-277-9914 to see how you qualify.
Penalties for Repeated Failures
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If a person fails to report an amount to be included in income
and has failed to report an amount required to be reported in any of three
preceding years, a penalty may be assessed of 10% of gross income not reported.
This is most often applied when additional slips are found by CRA during their
matching process.
Keep Your Receipts If You E-file Your Tax Return
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CRA may need to see your slips to verify or support income and claims so
keep your tax records on hand to be submitted if requested. During such
a review, CRA may ask for medical expenses, charitable donations,
childcare expenses, moving expenses, spousal or child support payments.
Universal Child Care Benefit (UCCB)
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Since July 1, 2006, you may have been receiving the UCCB, that
is $100 a month for each dependent under the age of 6 years. Remember the UCCB
is taxable to the spouse with the lower net income, but this amount will not be
included in calculating your eligibility for GST/HST or CCTB payments.
Cheque for Your Child
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If your child is under 18, working part or full time,
earning under the basic personal exemption of $10,382 they may be
entitled to a refund of taxes withheld. Even if no tax was withheld,
filing a return will increase your child's RRSP contribution limit for
future years.
RRSP Contributions
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If you don’t have enough cash to top up your RRSP, consider
making a contribution in lieu of cash. However, beware of the tax consequences
when transferring investments to your RRSP. Contact us
if you require more information. No Penalties
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If you have neglected to file prior years' tax returns and
you owe tax, make a complete voluntary disclosure and you will
only have to pay taxes owing plus interest. You will not be charged any
penalties as long as you come forward before CRA has begun any investigation.
File on Time
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Even if you are missing slips or
receipts, file your tax return on time. Use pay stubs, bank statements, or other
records to estimate your income and deductions. If you eventually receive your
slips and they are different from your estimates, file an adjustment and send
the slips at that time. For self employed individuals and their spouses, the tax
filing deadline is June 15th. but any tax owing must be paid by April 30th.
CPP Retirement Pension Sharing
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If your spouse has a limited work history and has limited
contributions to CPP, you may split your CPP Retirement Pension with your
spouse. This pension sharing may result in income tax savings to the spouse with
the higher income.
Foreign Income
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Many local residents have lived
in other countries and may receive some form of income
from that country. Canada has tax treaties with many other countries
that ensure that Canadian taxpayers are not required to pay tax twice on
this foreign income. Each tax treaty details how to properly report
foreign income (from pensions, wages, salaries or interest) on your
Canadian return. For a list of the
countries that have tax treaties with Canada, call International Tax
Services Office at 1-800-267-5177 or visit their website
www.fin.gc.ca.
NEW IN 2011: Ontario Children's Activity Tax Credit
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If you have a child enrolled in activities, such as painting classes, soccer, hockey or music lessons, you can claim up to $500 in eligible expenses and get up to $50 back for each child under 16 for 2010. You can receive up to $100 back for a child with a disability who is under 18. Click here for more information.
Marital Status
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You must file with the status that exists as at December 31st. If you
are entitled to any GST/HST credit, Universal Child Care Benefit, Canada
Child Tax Benefit or Working Income Tax Benefit you or your spouse or
common-law partner can receive the credit, but not both of you. No
matter which one applies, the credit will be the same. If your marital
status changes Form RC65, Marital Status Change must be completed to
notify Canada Revenue Agency.
Charities
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You can reduce your income by donating to registered charities. You can
claim donations made this year or carry forward any unclaimed donations
up to five years. Married or common-law couples can pool their donations
and claim them on one return. Please be aware of certain charitable
donation schemes being promoted about which CRA has issued warnings. For
more information, visit the
CRA website.
Working Income Tax Benefit
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Low-income and individuals can now claim the Working Income Tax Benefit
(WITB). The annual maximum amount for a single individual with no
dependents is $500 and for families (including couples with or without
children, and single parents) is $1,000. In addition, starting in
January 2008, eligible individuals and families were able to apply for the WITB
advance payment. To see if you qualify, see the
CRA website.
Amount for Children Born 1990 or Later
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You can claim $2,000 for each child who is under 18 years of age at the
end of the year. You may be able to transfer this amount to your spouse
or common-law partner or to claim his or her amount. For details, see
the
CRA website.
Pension Income Splitting
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Eligible individuals may be able to allocate up to half of their pension
income that qualifies for the pension income tax credit to their lower
income spouse or common-law partner. To make this election, you and your
spouse or common-law partner must each complete Form T1032, Joint
Election to split pension income. For more information, go to the
CRA website.
Public Transit Passes
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You may be able to claim the cost of monthly public transit
passes or passes of longer duration, such as annual passes.
Public transit includes local bus, streetcar, subway, commuter train or
bus or local ferry, if applicable. You must keep all such receipts that
you claim in case CRA requests to see them for verification.
Textbook Amount
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If you are a student, you are now eligible to claim an amount for
textbooks if you claim the education amount. The amount is $65 for each
month you qualify as a full time student or $20 for each month you
qualify as part time student. Even if someone else pays these fees, the
student must claim the tuition/education/textbook amount first
on their own return. Any unused portion can be carried forward or
transferred.
It Pays to Get Fit
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Since 2007 you may be able to claim the fees paid for physical
fitness programs for your children under the age of 16. The children’s fitness tax credit provides parents with an annual
credit of up to $500 per child to help cover the cost of physical
fitness or sporting activities. For details to see if the receipt for
your child’s program is eligible, see:
www.cra-arc.gc.ca/fitness. Additionally, new for 2010 is a similar credit for Ontario – the Ontario Children’s Activity Credit. Medical & Dental Expenses
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Save your family
medical and dental receipts for the calendar year. You may have a
medical expense credit. Don't forget you may include premiums paid for private
health insurance and for out-of-country insurance. Call us
for more information! Student Loan Interest Tax Credit
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A 15% federal
tax credit and a 6.05% Ontario provincial tax credit is available on the
repayment of interest on federally or provincially approved student
loans. Students can apply the credit to the current taxation year or up to 5
subsequent taxation years. The credit is non-transferable.
Adoption Expenses
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You may be able to claim a credit for eligible expenses related
to the adoption of a child who is under the age of 18. The maximum claim for
each child is $10,975. Eligible expenses may include fees paid to a licensed
agency, related court costs, reasonable and necessary travel costs, mandatory
immigration and foreign fees.
Union Dues
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Union dues do not necessarily have to be paid to a Canadian
organization. Therefore, employment-related annual dues paid to a trade
union outside Canada, might also be tax deductible.
50% Entertainment Rule
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If through your business, you give out promotional meals and/or
entertainment tickets, vouchers or gift certificates – please note that
a recent CRA Tax Court ruling has deemed these expenses to be only 50%
deductible for tax purposes, not 100%. However, if you provide clients
with tangible gifts (books, flowers, gift certificates to electronic
retailers, etc.) these remain 100% deductible. For more information on
how this may affect you, please contact us.
Tool Expense
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A portion of the cost of eligible tools acquired by you as an employed
tradesperson may be deductible. If, as a condition of your employment as
a tradesperson you spent in excess of $500 on tools purchased, have your employer complete and sign a T2200. Attach a list
of tools and your receipts to the completed T2200 to keep in case CRA
requests to see them for verification.
Child-Care Claims
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Claim payments for child-care expenses if your child is at
home, in a nursery school, day-care, camps, boarding schools, and sports
schools. These expenses may be claimed by you or your spouse if incurred in
order to work, carry on a business or attend school. Claims vary depending on
the age of the child. Ask us if you are unsure.
Do you have Deductions?
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You can claim Safety Deposit
Box fees, carrying charges, investment loan interest, investment counsel fees.
You can claim dues paid to a trade union, an association of public servants,
certain professional boards and other recognized associations.
Interest Expense Deductibility
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If you need to finance your business, consider establishing a
line of credit with your financial institution. The interest incurred on a line
of credit used exclusively to finance business purchases is tax
deductible.
T2200 - Declaration of Employment Expenses
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If you are a salaried or commissioned employee, you may be
eligible to claim certain employment expenses on your tax return. You require a
T2200 completed and signed by your employer in order to claim these expenses.
For eligible expenses, refer to CRA Guide T4044-Employment Expenses.
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