Every year, tax authorities make millions of dollars at the expense of taxpayers not claiming all tax deductions and credits available to their family. Some taxpayers may prefer to be conservative but many are simply unaware of the legal strategies available to reduce their family’s tax burden. One thing is sure, this money should be in your pockets instead of the government’s safety deposit box.
While there are numerous tax deductions and credits available, some can be categorized by taxpayer type, such as:
• Tuition tax credits that carry forward
• Tuition, education and textbook amounts
• Interest paid on student loans
• Public transit passes
• Goods and services tax/harmonized sales tax (GST/HST) credits
• Solidarity tax credit in Québec
• Age amount
• Pension income amount
• Pension income splitting with spouse
• Attendant care and medical expenses
• Home-support expenses for seniors
• Senior homeowners’ property tax grant
• Deductibles expenses for salaried employees, commissioned employees or self-employed individuals
• Work-space-in-the-home expenses
• Allowable motor vehicle expenses
• GST/QST rebate on employment expenses
• Annual union, professional and association dues
• Disability tax credits
• Nursing home expenses
• Attendant care and medical expenses
• Carrying charges, including management fees
• Interest expenses on loans used to earn investment (non- registered) income
• Capital and business investment losses
• Capital gains exemption on a principal residence
• Spousal dividend transfer • Foreign tax credit for taxes paid to another country
• Dependent tax credits
• Child care expenses
• Adoption expenses
• Children’s fitness and artistic expenses (will be eliminated as of 2017)
• Tuition tax credit transfers
• Family caregiver amount for children under 18 years of age
Similar to most tax benefits, certain criteria must be met in order to claim these deductions or credits on your tax return. In addition, even if you are eligible, you may not qualify for the entire amount and the tax impact can vary depending on your province of residence.
Tax legislation evolves in a very dynamic political environment. Every year, any tax deduction or credit can be added or canceled. As a result, making sure you are optimizing your family’s tax situation every year can be very complex. A qualified tax professional can help you identify deductions and credits you could claim but can also provide guidance and planning suggestions to make the most of the strategies available to reduce your future tax bill. By paying fewer taxes, your family will benefit from more money to invest, save or spend!
