Tax Tips & Info


Tax Tip #1 Most 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. If you are not taxable, the credit can be carried forward to following 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 $5,000 non-refundable tax credit. This credit may convert to a $750 cash amount.

Moving Expenses

If you have moved 40km or more for new employment or to attend school, you likely 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

If you incur expenses in the course of your employment, you may be eligible to deduct 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 Also note that travel expenses does not include going to or from home to work, you can only claim from the place of employment or first stop until last stop before coming home. Please be sure that you are keeping a log of your kilometers traveled during the year.

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, however this is not always the case.

NOTE: A year end printout from your medical insurance company, pharmacy, chiropractor, dentist, etc., will provide concise and complete records of the out of pocket expenses that may eligable to be claimed.

Medical expenses that are often missed

  • Premiums paid for medical insurance, including travel insurance.
  • Nursing home expenses
  • Tutoring for students (doctors note to be provided)
  • Doctors examination for work purposes, sick notes, etc
  • Medical Travel to attend specialist appointments may be eligable - A doctors note is required, in addition these appointments must be referred by physician and for services that are not provided within the 40km or 80km radius
    • When traveling more than 40km
      • Kilometers - the distance traveled from home to the appointment location at a rate per km as determined by CRA
    • When traveling more than 80km the following additional expeneses may be claimed.
      • Meals - either with receipts or by using the amount allowed by CRA per meal per person. Meals for a caregiver attending with you may be claimed if accompied with a doctor note stating you require assistance.
      • Parking - parking at local hospitals or doctors appointments are not deductible medical expenses.
      • Lodging - if an overnight stay is required due to the nature of the appointment, the cost of accomidations may be eligable.
  • Home renovations that are required due to infirmity or safety, including handrails, raised toilet seats, bath tubs/shower stalls, faucets, etc

Disability Tax Credit

If you are markedly restricted for a prolonged period of time (over 12 months) in the following areas may qualify you for the Disablity 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 can be a long process, but adjustments can be made to previous returns if they qualify.

  • Walking
  • Speech
  • Vision
  • Hearing
  • Elimination (bowel or bladder)
  • Feeding
  • Dressing
  • Mental functions necessary for every day life
  • Life sustaining therapy

Dependants making under $11,000

Do not need to file a tax return as they will be non-taxable, however they may have paid more than they should have In federal taxes or EI. If they are turning 19 prior to the following July, they will qualify for the HST credit.

Single parent must declare the income of all of their dependants regardless of the amounts in order for eligable dependant amount to be calculated correctly.

Tax Tip #2 - Federal & Provincal Credits

File on time to ensure that you are receiving all your benefits. The CRA year is from July 1 – June 30th, the new credits begin every July. If you and your spouse have not filed by June 15, you will not receive your July credits on time.

Since all benefits are based on a 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

Tax Tip #3 - 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.

Tax Tip #4 - Spliting Pensions

Many people are not aware that you are able to split your Canada Pension Plan. You will need to go to your local Service Canada Center and request to have them split your CPP. This has the potential to considerably reduce your individual taxable income level, increase your age amount and decrease your taxable payable!

Seniors can split up to 50% of eligible pension income with a spouse or common-law partner. Keep in mind that 50% is hardly ever the optimal amount to be transferred, detailed calculations are required to calculate the least overall tax payable. At Rose Tax & Accounting Service, we take pride in ensuring that we are providing our clients with a clear overall picture of your family's unique tax situation, not just focusing on the individual tax returns themselves.

Tax Tip #5 - Marital Status changes

You are required by CRA to advise them of change of marital status

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

  • Log into Mybenefits CRA or MyCRA on your mobile apps page, select “Manage Profile details” or “Personal information” then “marital status”
  • Log into My Account, select “Personal information” then “Change my marital status”
  • Call the CRA at 1-800-387-1193
  • Fill out Form RC65 Marital Status Change and send it to CRA

CRA’s definition of Martial status

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
  • Have 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.  

Tax Tip #6 - Change of Address

CRA does require you to advise them of a change of address, you can do this in the following ways:

  • Log into Mybenefits CRA or MyCRA on your mobile apps page, select “Manage Profile details” or “Personal information” then “marital status”
  • Log into My Account, select “Personal information” then “Change my marital status”
  • Call the CRA at 1-800-387-1193
  • Send of completed Form RC325 Address Change request or a signed letter that includes your Social Insurance number. If you are changing the address for more than one individual you will need to include the additional Social Insurance numbers & signatures

Tax Tip #7 - Common Myths & Misconceptions

Friends mean often mean well, but often listening to their advice on what you are able claim may lead to problems down the road. This is one area that is best to do your research before you go ahead with the claim or leave it to the professionals.

Myth #1 - If I didn’t get a slip I don’t have to report the income. You are obligated to report all income that you make throughout the year – including cash jobs, tips, and income from all foreign sources, even if you have paid taxes on that income.

Myth #2 - I am self-employed, so I can write everything off. If you are self employed, you can deduct reasonable expenses incurred to earn the income. You must determine personal use versus business use in items such as vehicle expenses, cell phone, internet, etc. All vehicle expenses are also dependant upon a log book that is required to be kept indicating all business use of vehicle.

Myth #3 - Employment Insurance, Medical and Maternity leave are not taxable income. Income received from Employment Insurance, regardless if it is regular benefit, medical or maternity leave, is definitely taxable and beware, EI rarely takes enough taxes off unless the client requests extra to be deducted. You will need to contact Service Canada directly to make adjustments to the tax deducted from your benefits.

Myth #4 - My pets are my alarm system or a medical expense because they calm my anxiety. If your children play with the dog or it sleeps in the house, it is not a guard dog and does not qualify. Specifically trained and registered animals which provide assistance for a person who is

  • Blind
  • Profoundly deaf
  • Has a severe and prolonged physical impairment that markedly restricts the use of his or her arms or legs
  • Is severely affected by autism or epilepsy
  • Has severe diabetes

may qualify as a deduction. The cost of the animals care and maintenance, which includes food, registration fees and veterinarian bills are all eligible expenses.

Myth #5 - If I get a Professional to do my taxes they are responsible if there is an error. Since you sign your tax return therefore you are ultimately responsible for the return. However, most responsible tax services will refund you any fees incurred due to an error they have made. Never just sign a return without the tax preparer going over the return with you prior to you signing.

Myth #6 - They will never catch me. You may be right, but in that case, you will be one of the very few lucky ones. CRA is actively investigating non-compliance issues, currently focusing on tax evasion, off shore accounts, the underground community, and incorrectly reporting marital status. They are working in conjunction with Municipal, Provincial and Federal agencies to determine inaccuracies in tax reporting. They have also started using publilc social media accounts, so if you make a post on Facebook stating “Happy Birthday to the best hubby ever!” and you have claimed single on your tax return, you may just have a visitor come a knocking on your door...or if you’ve reported $20,000 net income for self employment and you sport a fancy brand new F150 in the driveway, it will cause some suspicion.