Your Income Tax Cheat Sheet
Yes, it’s that time of year again when one of life’s two certainties rears its odious head. Yup, tax season is here. At First Foundation, however, we don’t see tax season as a time to complain, but as a time to save money! So, roll up your sleeves, get out your notebook and get ready to jot down these 7 tips for saving money on your taxes.
1. Hire an accountant (if you can)
If you have substantial investments, own a business, or have any financial activities that don’t fit neatly into the box of a salaried employee, consider hiring an accountant to do all the hard work for you. They’ll find things you can write off that you may not have thought of on your own and, most importantly, ensure that your tax return is properly filled out. Most accountants are worth their fee – and sometimes much more – at tax time. If you can’t afford to hire an accountant though…
2. Get CRA-Certified Tax Preparation Software
If you are going to do your own taxes, look for a CRA-certified tax preparation program or online service. The CRA certification means that the Family Tax Cut and other credits are completely up-to-date; non-certified programs may not include important items like the Family Tax Cut. Find out if your program is certified on the CRA website.
The Children’s Fitness Tax Credit has increased from $500 to $1,000 for 2014.
3. Take Advantage of the Family Tax Cut – retroactive for 2014
If you are a two-parent family with one or more children who are under the age of 18, you get to benefit from the Family Tax Cut. The Family Tax Cut lets you transfer up to $50,000 of income to the lower-earning partner. The credit is capped at $2,000. It is also a non-refundable credit, which means it will only offset any tax you may have to pay. See this CBC story on the new program for more information.
4. The Children’s Fitness Tax Credit Doubled for 2014
The Children’s Fitness Tax Credit has increased from $500 to $1,000 for 2014. The only catch is that for 2014, it is non-refundable and is only worth up to $150 per child. This changes to a refundable credit in the 2015 tax year so make sure to save all your receipts for next year’s filing.
5. GST/HST Credit
You don’t have to apply for this credit anymore; it is automatically calculated by CRA.
6. No more safety deposit box credit
You can’t claim expenses for safety deposit boxes for investments as of the 2014 tax year.
7. Make sure you are claiming medical expenses
Canadians can claim medical expenses, some of which may surprise you. Drugs, prescription eyewear, dental work, and many other out-of-pocket medical expenses can be used as write offs on your tax return. In 2014, the government allowed people to write off the cost of medical therapy animals (for patients with severe diabetes) as well as mental and physical therapy for Canadians eligible for the disability tax credit.
People diagnosed with celiac disease who have had a gluten-free diet prescribed by their doctor can claim the difference between gluten-free and non-gluten-free food; this requires careful tracking of receipts and some research into what the usual cost of the food is.
You can also claim travel expenses for medical appointments if you are traveling more than 40 kilometres and the services are not available in your immediate area. If you are travelling more than 80 kilometres for a medical appointment, you may even be able to write off meals and accommodations. If you have a number of medical expenses, it may be worth hiring an accountant to determine what you are eligible for.
Born and raised in Alberta, Tyler is married to Tammy and they have two daughters, Megan & Hallie. When you ask him what takes up most of his time... he…