2009 Tax Return Tips

Hello Bloggers!! It’s everyone’s favourite time of year again: Tax Time!  Although I don’t hear much cheering, I do know almost everyone has to file, and absolutely everyone loves to save money on their returns.  So, here are some great tax saving tips and tax credits that may apply to you to either increase your return or lower your payment to Canada Revenue Agency (CRA).

First off, if you are filling a return and are over 18 years of age, make sure you apply for the GST/HST Credit.  Only one person can claim per married or common law couple, so make sure it’s the person with the most tax owing.  If you have children under 18, you may be eligible for the Child Tax Benefit.  Both you and your spouse must file returns to get the credit, and the credit is paid out in monthly, non-taxable installments.

Then come the deductions from income.  You need to review your own personal situation to see if you qualify for each deduction.  If you have children, you may be able to claim Child Care Expenses, private school tuition fees, and moving expenses if your child moved away for continuing education.  If you made any investments in 2009, you may be able to write off interest expenses for money borrowed to produce income from business, investment or property.  And don’t forget to write off your safety deposit box; it qualifies as an investment expense!   If you moved in 2009 and it brings you at least 40 kilometres closer to work, you may be eligible for the Moving Expense Deduction.  These can include travel costs such as meals, temporary lodging, legal fees and more.  Make sure to review your situation to find exactly which deductions you qualify for.

Next come the non-refundable tax credits.  Remember these are not deductions from income, but are used to reduce federal or provincial taxes payable.   Everyone who earns income in Canada can claim the Employment Amount.  So make sure you do! Some others tax credits apply to children such as the Child Tax Credit for children under 18 and the Children’s Fitness Credit for sports and activities that keep kids active. If you received any dividend payments in 2009, you may be eligible for the Dividend Tax Credit.  Check with your financial advisor to see if you qualify.  Also, if you have a parent or grandparent living with you, you may be able to claim the Caregiver Amount.  There are also several credits for disabled persons, so make sure to talk to your accountant/advisor to maximize those claims.

And let’s not forget charitable donations.  If you gave money to a registered charity in 2009, you may qualify for the Charitable Donations Tax Credit.  Remember some donations receive larger credit amounts, such as any contributions to a Federal Political Party, and you may combine your donations with your spouse or common-law partner to maximize your credits.  Be sure to talk to your advisor or accountant before transferring amounts.  Also, the Home Renovation Tax Credit gives people who renovated a qualifying home a credit of up to $1,350.  This can only be claimed for 2009 so make sure you get those credits this year! 

You may also qualify for the Medical Expense Credit, which can help people cover some of their yearly medical expenses.  There is a threshold based on 3% of your income for the year, so make sure you’re above it! This credit must be claimed by the spouse with the lower net income, with some exceptions, so talk to your advisor to figure out the best strategy for claiming. 

It would be impossible for me to cover in any great detail all of the credits and deductions available to all Canadians. The key is to identify the ones available to you personally, and try to maximize them to your advantage.  I would strongly recommend talking to your accountant or financial advisor before claiming, as some credits and deductions can be complicated to apply in certain situations.  If you would like more detailed information on any of the above topics, feel free to contact me via email and I would be happy to answer any questions you may have.  Some of these topics are also covered in great detail on my blog, so be sure to check it regularly for money saving tips!  

Until next time,

Adam Myers

Financial Advisor

Professionals for Independent Planning, Ottawa Ontario

Email: adam@pfip.ca

Phone: 613-224-5511   X108

www.pfip.ca

Writen by Adam Myers

Financial Advisor, Ottawa Ontario