Tax Tips
If the following expenses are incurred by December 31, they will be eligible for tax deductions:
- moving expenses,
- child care expenses,
- safety deposit box fees,
- charitable donations,
- political contributions,
- medical expenses, and
- alimony.
Canada Employment Credit
If you had employment income, then you are eligible to claim the Canada Employment Credit. Even if it was just a summer job, you still qualify for the credit.
Public transit amount
You can claim the tax credit for transit passes on your taxes. Only monthly or longer passes qualify. Only you or your spouse (or common law partner) can claim the cost of transit passes. Keep both your receipts and passes to claim the credit.
RRSP contributions
- You have until February 29, to make tax deductible RRSP contributions for the previous tax year.
- Beginning in 2007, the last day you can contribute to your RRSP is December 31st of the year you turn 71.
- Eligible Registered Retirement Savings Plan (RRSP) contribution amounts are noted on the previous year's personal income tax return assessment notices.
- Consider contributing to a spousal RRSP to achieve income splitting in the future.
Seniors — maximums below apply to the 2009 tax year.
- A OAS recipient, whose net income exceeds $66,355, will lose all, or part, of their old age security. Calculation of re-payment is based on 15% of the excess over this amount, to a maximum of the total amount of OAS received.
- Senior citizens will begin to lose their income tax age credit if net income exceeds $32,280. The age credit will be eliminated, if net income exceeds $61,187.
- See Pension Income Splitting - this was effective with the 2007 tax year
Children
Every child under the age of six is eligible for the new $100-per month Universal Child Care Benefit - no matter what your household income. Register your child with Canada Revenue Agency, if you haven't started receiving your monthly cheques. See the Canada Revenue site for application details.
Children's Fitness Tax Credit
The Federal Government has announced the guidelines for the Children's Fitness Tax Credit that starts in 2007. See the link for Children's Fitness.
Education Amount
- You can claim this amount for each whole or part month for the tax year in which you were enrolled in a qualifying educational program.
- Students, who are eligible to claim the Education Amount, can now claim the Textbook Tax Credit for each month they are enrolled in an eligible program. It is $65 a month for full-time students and $20 for part-time.
Tradespersons Tool Credit
Those who bought eligible tools in excess of $1,000, can claim the Tradespersons Tool Credit. The maximum claim is $500 and you will need a Form T2200 certified by your employer. Electronic communication devices and electronic data processing equipment are excluded.
Self-employed individuals
Will be allowed to deduct Health and dental premiums for the year for Private Health Plan provided they meet certain criteria.
New for 2009!
The Home Renovation Tax Credit
The new Federal Budget announced in January 2009 is giving homeowners a tax credit for fixing up their principal residences.
The credit is calculated as 15% of renovations in excess of $1,000. If you spend $6,000 on renovations, you will get a credit of $750 ($5,000 x 15%). The maximum credit is $1,350 on renovations of $10,000 or more.
The renovations must be of an enduring nature and be integral to the dwelling. Examples provided by the government include:
- Renovating a kitchen or bathroom.
- New carpet or hardwood floors.
- A new deck or fence.
- A new furnace or water heater.
- Painting the interior or exterior of your house.
- Resurfacing your driveway.
Expenses include the cost of building materials, labour, equipment rentals and the cost of getting permits.
Types of things you cannot claim include:
- Repairs or maintenance performed on a yearly or more frequent basis (such as furnace or carpet cleaning).
- Furniture or appliances such as a new stove or fridge.
- Tools or equipment that will retain a value beyond the renovations.
- Financing costs.
A residence will generally qualify if it is eligible to be your principal residence or the principal residence of a family member at any time between January 27, 2009 and February 1, 2010. If you own a condominium, you can claim your share of expenses incurred in respect of common areas as well as expenses in respect of your own particular unit.
You can only claim for work done or supplies purchased before February 1, 2010. You cannot claim for agreements to do work or buy supplies that were entered into before January 28, 2009. The credit must be claimed on your 2009 tax return (even where the work is done in January 2010).
Additional information is available on the Canada Revenue Agency website.