Author Archives: Allan

Tax Tip #10- Work from home and save

Did you know that under certain conditions, if you are self-employed and use part of your home to run your business, you can deduct a corresponding part of the operating costs of your home? For example, if your home office takes up 20% of your total floor space, you can deduct 20% of your home maintenance costs, such as heating, electricity, and cleaning materials.

Any expenses that are directly related to the business, such as supplies and travel, are also deductible. Your home office can be a segregated area, or a room in your home that is devoted entirely to your business.

Source: Canada Revenue Agency http://www.cra-arc.gc.ca/menu-eng.html

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Tax Tip #9 – Donations

Did you know that if you make donations to registered Canadian charities, you can claim them as a non-refundable tax credit on your tax return?

Total donations of up to $200 will give you a federal tax credit of 16% of the donation. Donations that are more than $200 will give you a federal tax credit of 29% of the donation amount that exceeds $200. The provincial and territorial amounts may vary.

With proper tax planning and advice, married couples or common-law partners can pool their donations and claim them on one return. As well, donations do not have to be claimed in the year they are made. They can be carried forward for up to five years.

Source: Canada Revenue Agency  http://www.cra-arc.gc.ca/menu-eng.html

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Tax Tip #8 – Claim your child care expenses

Did you know that you may be able to claim your child care expenses your income tax return? To qualify, you must have incurred the expenses in order to work or attend school. When there are two parents, the parent with the lower net income usually has to make the claim.

If your child is under the age of seven and you qualify, you may be able to claim up to $7,000 a year. For each child over the age of seven but under the age of sixteen, you may be able to claim up to $4,000. There is no age limit for a disabled child and you may be able to claim up to $10,000.

What payments can you claim?

You can claim payments for child care expenses made to:

  • Caregivers providing child care services
  • Day nursery schools and daycare centres
  • Educational institutions, for the part of the fees that relate to child care services
  • Day camps and day sports schools where the primary goal of the camp is to care for children (an institution offering a sports study program is not a sports school)
  • Boarding schools, overnight sports schools, or camps where lodging is involved

You are even able to claim advertising expenses and placement agency fees paid to locate a child care provider.

Source: Canada Revenue Agency  http://www.cra-arc.gc.ca/menu-eng.html

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Tax Tip #7 – Fast Cash

Did you know that if you file your income tax return electronically, you may get your refund within eight business days? If you file electronically and use direct deposit, you will get your refund even faster!

Filing electronically is convenient and environmentally friendly. If you use EFILE we receive an immediate confirmation that your return has been accepted and you have no mailing costs. You don’t need to send any receipts unless the Canada Revenue Agency asks for them.

If you want the government to deposit your refund directly into your bank account, we will send a request for direct deposit to the Canada Revenue Agency.

For more information on electronic filing and direct deposit please get in contact with us.

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Tax Tip #6 – Student tax credits

As a student enrolled in an institution offering post secondary education, you may be able to claim your tuition and education amounts on your tax return.

You can claim an education amount up to $400 for each month you attended school and up to $65 per month for textbooks.  If you have unused tuition and education tax credits, these credits can be carried forward to the next year.  You can also choose to transfer up to $5000 of unused credits to a spouse or parent.

These amounts are for the Federal credits. The provincial and territorial amounts may vary. Other amounts are available for part-time students.

For more information on how filing your tax return will benefit you as a student, please refer to “Keeping the Taxman at Bay“, published by Allan Fefergrad, CGA.

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Tax Tip #5 – Claim those investment expenses

If you have investments, you may be able to claim related carrying costs and investment expenses. Carrying costs include fees such as a safety deposit box rental or fees paid to an investment advisor.  You can also claim interest expenses on the money that you borrow to for certain investments.

You can deduct interest and carrying charges incurred to earn income from securities, bonds and other investments, if they are earning investment income. The requirement of earning income generally means that the investments should be paying interest or dividends.

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Tax Tip #4 – What’s new?

The following are some new changes affecting your 2011 Personal Income Tax Return:

  • Children’s arts amount
  • Volunteer firefighters’ amount
  • Allowable amount of medical expenses for other dependants
  • Canada Child Tax Benefit (CCTB)
  • Canada Pension Plan (CPP) contributions
  • Students tuition credit
  • Investment tax credit
  • Exploration and development expenses
  • Split income of a child under 18

Please refer to the attached press release from the Canada Revenue Agency. http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/whtsnw-eng.html

Please contact us to discuss how these changes will benefit you.

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Tax Tip #3 – Newcomers to Canada

Are you a new resident of Canada? If yes, then you will find these tax tips very interesting.

If you are a newcomer to Canada, you can be authorized to receive payments such as the Canadian Child Tax Benefit (CCTB) or the goods and the services/harmonized sales tax (GST/HST) credit. To receive these credits, you must report your income from all the sources, including money earned worldwide and within Canada. Like all the Canadians, you have the right and the responsibility to file your income tax every year.

Source: Canada Revenue Agency  http://www.cra-arc.gc.ca/menu-eng.html

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Tax Tip #2 – RRSP Contributions

A Registered Retirement Savings Plan (RRSP) can help you save for retirement, an education or even buy your first home.  You have until February 29, 2012 to contribute to your RRSP so that you can reap the benefit of a tax deduction on your 2011 tax year.  To retrieve your RRSP deduction limit for 2011, please refer to your 2010 Notice of Assessment.  You can also use the new online service offered to you by the CRA named “My Account”.

My Account lets you obtain the information on your RRSP contribution limits, contribution requirements for the Home Buyers Plan and contribution requirements for the Lifelong Learning Plan.  You can also receive information on your Child Tax Benefits and your GST/HST payment information.

For more information on RRSP, visit http://www.cra.gc.ca/rrsp or log on to My Account at http://www.cra.gc.ca/myaccount.

Source: Canada Revenue Agency  http://www.cra-arc.gc.ca/menu-eng.html

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Tax Tip #1 – File For Your Children

The income tax filing for your children can be very beneficial to them in the future. For the 2011 tax year, if your child has income of less than $10,527 there is no tax to pay.  However, by producing an income tax return for your child, he/she will reap the benefit of creating RRSP contribution room which can be used in the future.

Also if your child is above the age of 18, they can be entitled to the GST/HST credit.  The only way your child can profit from this is to produce an income tax return.

For more information on payment dates and how the GST/HST credit is calculated, visit http://www.cra-arc.gc.ca/bnfts/gsthst/fq_pymnts-eng.html

Source: Canada Revenue Agency  http://www.cra-arc.gc.ca/menu-e.html

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