Commonly Missed Deductions

 

Student Loan Interest - If you are paying off a Government student loan you can deduct the interest paid on the loan as a non-refundable tax credit, which can be carried forward to following year if not needed in that tax year. Unfortunately, student line of credits do not qualify for this deduction.

 

First Time Home Buyers’ Credit - Did you just purchase your first home? You are most likely eligible for a $10,000 non-refundable tax credit.

 

Moving Expenses - If you have moved 40km or more for new employment or to attend school, you may qualify to deduct moving expenses that have not been reimbursed to you. Deductions can include travel expenses; either the actual receipts for travel, or a CRA (Canada Revenue Agency) travel rate per kilometers and meals, the cost of selling old home as well as purchasing new home, including legal fees, real estate commissions and other incidental costs.

 

Employment Expenses - Your employer MUST complete and sign a Form T2200 Conditions of Employment in order for you to claim these deductions. Any reimbursements will be deducted from the total expenses. NOTE: travel between your home to work is not eligble, only from the place of employment or first stop until last stop before coming home. Please be sure to keep a log of your kilometers traveled during the year, personally and professionally.

 

Medical Expenses - Medical expenses from both spouses can be combined to maximise the medical deduction. The total medical expenses must exceed 3% of the net taxable income. Usually, the spouse with the lowest taxable income claims the medical expenses to maximise this credit. NOTE: A year end printout from your medical insurance company, pharmacy, and other medical service providers will provide concise and complete records for eligable expenses to be claimed.

 Medical expenses often missed: 

• Nursing home expenses

• Premiums paid for medical insurance, including travel insurance

• Doctors examination for work purposes, sick notes, etc

• Home renovations that accessability or safety, including handrails, raised toilet seats, bath tubs, faucets, and more.

• Medical Travel may be eligable. A doctors note is required, in addition these appointments must be referred by physician for services not available within a 40km radius. There are additional claimable expenses when traveling over 80km one way.

 

Disability Tax Credit - This credit must be applied for by completing an application form that is completed by your doctor or specialist and submitted to CRA. This credit is retroactive and transferable to supporting family members.

 

Take care with businesses who offer their services to apply for this credit on your behalf as they charge a large percentage of your potential refund, often with questionable medical professionals completing the application.

 

Dependants making under $11,000 - Do not need to file a tax return as they are non-taxable, however they may have paid more than they should have In federal taxes or EI. When over 18, they may qualify for federal and provinical credits.

 

Single parent must declare the income of all of their dependants regardless of the age or amount in order for the eligable dependant non-refundable tax credit to be calculated correctly.

 

Federal & Provincal Credits: File on time to ensure that you are receiving all your benefits when they are issued. For couples, because all benefits are based on family income, CRA requires that both spouses file their returns to determine the Child Tax Benefit, HST credit and Ontario Trillium benefits, as well as the Guaranteed income supplement.

 

Canada Caregiver Credit: New for the 2017 tax year, you no longer have to reside with the caregiver in order for them to qualify for the caregiver amount. If your income is less than $23,046 and are dependant on your children due to an infirmity, they may be eligible to claim a caregiver amount for you.

 

Spliting Pensions: Couples with eligible pensions can split up to 50% with a spouse or common-law partner. Keep in mind that 50% is almost never the optimal amount to be transferred, so detailed calculations are required to calculate the maximum benefit to this option.

 

Many people are not aware that you are able to split your Canada Pension Plan. You can do this through your My Service Canada account or calling them at 1-800-277-9914. This has the potential to considerably reduce your individual taxable income level, increase your age amount and decrease your taxable payable!

 

Marital Status & Address changes: You are required by CRA to advise them of change of marital status and/or address change within 30 days.

You can advise CRA of these changes in the following ways:

• Log into your My CRA Account, select “Benefits and Credits” and on the right-hand side you will see a link to edit or marital status. Under that is the option to upate the information you have on file which includes your address, direct deposit and other information.
• Call the CRA at 1-800-387-1193
• By mail:
  • Marital status change - Form RC65.
  • Change of Address - Form RC325 Address Change request or a signed letter that includes your Social Insurance number. 

 

Definition of Martial status as per CRA:

• Single - persons not cohabitating with another party for more than a 12 month period
• Spouse - a person who you are legally married to
• Common-law partner -  person who is not your spouse, with whom you are having a conjugal relationship and to whom at least one of the following situations applies:
  • Living together in a conjugal relationship which has lasted at least 12 continuous months; in this case, 12 continuous months includes any period of time you were separated for less than 90 days because of a breakdown in relationship
  • Is the parent of a child by birth or adoption or
  • Has custody and control of your child and that child is wholly dependant on that person for support
• Separated - separated due to a breakdown in the relationship
  • If you were married you do not need to be separated for a 90 day period before being considered separated on/before Dec 31 of current tax year
  • If you were living in a common-law relationship, you need to wait for 90 days from the date of separation to be considered separated. This is due to the 12 month period they allow prior to having to claim common-law.