D. Smith: Tax deductions for year-end tax filing
Are you maximizing your tax return? Many Canadians miss out on tax deductions each year. When you miss available tax deductions or credits, you are paying too much tax.
Here are some of the most common tax deductions and tax credits.
Children’s activities are covered under the children’s fitness credits and the children’s art credit may cover tutoring and music and language classes. You can claim to a maximum of $500 per child the fees paid in 2013 relating to the cost of registration or membership for your or your spouse's or common-law partner's child in a prescribed program of physical activity.
You can claim to a maximum of $500 per child the fees paid in 2013 relating to the cost of registration or membership for your or your spouses or common-law partner’s child in a prescribed program of artistic, cultural, recreational, or developmental activity.
You can deduct eligible moving expenses if you move and establish a new home to be employed or carry on a business at a new location, or if you move to study courses as a student in full-time attendance at a university, college or other educational institution that offers courses at a post-secondary school level.
To qualify, your new home must be at least 40 kilometers (by the shortest usual public route) closer to the new place of work or educational institution.
You can claim an amount of $5,000 for the purchase of a qualifying home made in 2013, if both of the following apply:
you or your spouse or common-law partner acquired a qualifying home; and
you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer).
Public transit is tax deductible on monthly (or longer) transit passes.
Medical expenses cover a variety of medical expenses as long as incurred in any 12 month period that ended in 2013. The lower income earning spouse should claim these expenses. An often missed expense is hearing aid batteries to claim under the medical expense deduction.
Age amount credit is available to those age 65 or older on Dec 31, 2013 when your net income is less than $80,256.
The pension income credit is available to those age 65 or older if you receive eligible pension, superannuation, annuity payment or RRIF income. If you qualify to claim the pension income amount, you may be eligible to report up to one-half of that pension income on your spouse’s return, saving you tax as a couple if your spouse or common-law-partner is in a lower tax bracket.
Split CPP income if you and your spouse are at least 60 years of age and one or both of you receive CPP benefits. You can save tax by shifting income from a higher income spouse to a lower income spouse.
For 2013 and subsequent years, if you have a dependent with an impairment in physical or mental functions, you may be eligible to claim an additional amount of $2,040.
Sharpen your pencil, check for all available tax deductions and credits and get your tax return filed before the deadline of April 30, 2014.
The CRA website http://www.cra-arc.gc.ca links you to the guides, schedules and other forms.