TORONTO, April 26 /CNW/ - With the hours ticking down to this year's tax
deadline, Ernst & Young suggests asking yourself the following key
questions. Some will save you time, some will save your nerves and —
best of all — some may even save you money.
What are you carrying in your back pocket? From unused RRSP contributions to interest on student loans, you may
have carry-forward balances to use as deductions or credits for 2010.
Check your prior year return, notice of assessment or online Canada
Revenue Agency account to find out.
Do you care to share? If you received eligible pension income in 2010, up to 50% can be
reported in your spouse's or common-law partner's tax return. You'll
generally reap the greatest benefits when one member of the couple
earns significant pension income while the other has little or no
income. But evaluate all options, as there are sometimes exceptions to
that rule (often when the "clawback" of old age security is involved).
How are you helping the community? If you made charitable donations last year, read up on the federal tax
credit. This will help you decide if you should accumulate donations
made over a few years to claim at once for the higher-rate credit.
Don't forget: if you've donated mutual funds, stocks or bonds,
additional tax benefits may apply.
What's the best medicine? You should claim all the family's medical expenses on the lower-income
spouse's return. Don't forget, you may also be able to claim dependent
relatives' expenses. Just ensure the individual who is making the claim
has sufficient tax to absorb the entire credit.
Are you giving yourself enough credit? Be it child fitness, public transit, tuition or adoption expenses — a
range of family-related tax credits exist. Do your research and make
sure you're taking advantage of everything available to you.
Who's the boss? Self-employed Canadians can claim a host of business-related expenses,
including association fees, home-office expenses, salaries paid, car
and parking costs and more. Review the list so you don't miss out.
Don't forget: if you claim home-office expenses, you're likely better
off not to claim the depreciation on the home-office portion of your
house. Although this will give you a deduction in the current year, you
will lose some of the capital gains protection available from the
Could what's old be new again? Don't toss those old receipts in the shredder just yet. Some may still
have value on your 2010 return — especially receipts for medical
expenses and charitable donations. Even if you discover a claim that
could only be made in a previous year, you can file a T1 Adjustment
Request. You can go back as far as 10 years to claim previously
overlooked refunds — including this year, if you've already filed for
2010 but overlooked something.
Time to make a move? Anyone who moved to start a new job, business or post-secondary
education in 2010 might be able to claim certain expenses. Take a look
back at the costs — from lodging and meals in transit, to the price of
your moving company — and find out what applies.
What makes a house a home? If you bought a house in 2010, you could qualify for a credit if
neither you nor your spouse owned a residence from January 2, 2006, to
the date of purchase of your new home. Anyone who bought a house to
better meet the needs of a family member with a disability might also
be eligible, regardless of home ownership history.
Are you forgetting someone? If your children earn money from small or part-time jobs, filing a tax
return establishes room for future RRSP contributions. Filing returns
for teenagers can also mean a refundable tax or GST credit, and the
ability to make immediate or later tax-free savings account
contributions. University students should always file tax returns and
report eligible tuition, education and textbook amounts to establish
credits they can use in a future year.
Why not 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. But even if you file electronically, always keep
Are you going to make the deadline? Missing the tax filing deadline can cost you in penalties and interest
charges. Even those who expect a refund should still aim to meet the
filing deadline, just in case a tax liability arises. Last but not
least, for business owners and their spouses, the return deadline is
June 15, but any taxes owning must be paid by the April 30 deadline.
For more detail on these ideas and suggestions, please visit http://www.ey.com/CA/en/Services/Tax/TaxMatters or http://www.ey.com/CA/en/Services/Tax/Tax-MYPT.
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