TORONTO, March 31 /CNW/ - What do your kids, your new home and your
capital losses have in common? They're three of the ways you can save money
this tax season. Ernst & Young is offering practical tips that can help in
this turbulent economy.
1. Turn your losses into gains. Capital losses can be applied against
capital gains. Your net capital losses for 2008 can be carried back
three years and applied to net gains in any year from 2005 to 2007.
If you incurred business investment losses, you can claim them
against any income in the year, not just capital gains
2. Share the love... and your income. If you received eligible pension
income in 2008, up to 50% can be reported in your spouse's or common-
law partner's tax return.
3. Doing good in your community pays off. If you gave to charity in
2008, you need to look into the federal tax credit for donations.
This will help you decide if you should accumulate donations made
over a few years to claim at once for the higher-rate credit. If
you've donated stocks, bonds or mutual funds, additional tax benefits
4. Sometimes less means more. You should claim all the family's medical
expenses in the lower-income spouse's return. But remember - the
individual who is making the claim should have sufficient income to
absorb the entire credit. Dependent relatives' expenses can sometimes
5. We are family. From child tax credits for children under 18 to an
adoption expense credit or the child fitness credit - your family
could be eligible for a host of refunds. Make sure you look into the
6. Are you the boss? If self-employed, you can claim a number of
business-related expenses and reduce the tax you pay. Car and parking
expenses, business association fees, convention costs and home office
expenses, salaries paid to assistants including family members: the
list is long. Exhaust all possibilities.
7. Check your files - twice. Some old receipts may still have value in
your 2008 return. Receipts for charitable donations and medical
expense receipts could be of particular interest.
8. On the move? If you moved in 2008 to start a new job, business or
post-secondary education, you may be able to claim certain expenses
from the cost of moving to travel costs, including meals and lodging
while en route.
9. Don't forget the kids. Filing tax returns for children who had part-
time jobs or have been paid for various small jobs (lawn care,
babysitting) establishes contribution room for RRSPs (contributions
can be made in any future year). Filing returns for teenagers can
also mean a refundable tax credit, or GST credit for certain people.
10. Do you have any carry-forward balances? Check your prior year return
and Notice of Assessment to see if you have any carry-forward
balances that may be used as deductions or credits for 2008.
11. Go high tech. Using income-tax software to prepare your tax return
has many benefits. Return preparation is generally quicker, easier
and less open to mechanical errors. Remember, even if you file
electronically, keep your receipts.
Ernst & Young's Guide to Preparing 2008 Personal Tax Returns offers more
detail on these suggestions and ideas. Of course, it doesn't hurt to get
started on 2009 tax savings now. Look into how you can take advantage of a
tax-free savings account this year. If you're renovating, be sure to save your
receipts. Anyone who spends $10,000 or more between January 28, 2009, and
January 31, 2010, is eligible for a credit of $1,350 against 2009 income
About Ernst & Young
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advisory services. Worldwide, our 135,000 people are united by our shared
values and an unwavering commitment to quality. We make a difference by
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potential. For more information, please visit ey.com/ca.
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