Top questions to help Canadians prepare for their 2015 filing
CALGARY, Dec. 15, 2015 /CNW/ - Before holiday celebrations get underway, it's always good to take a few moments to prepare for tax season. Tax preparation isn't as stressful as many Canadians think but it is something many Canadians struggle with. During last year's tax season, 1 in 5 Canadians said that they scrambled to meet the deadline.
H&R Block Canada wants to help Canadians avoid the stress of tax preparation and get ahead of their 2015 filing season preparations by asking themselves a few simple questions.
Do you know when to file?
You can begin preparing your return once your T4s and other slips have arrived. Your T4s have to be mailed by February 28. But don't wait too long – April 30 (or in this year's case…May 2) arrives a lot faster than you think. Which brings us to our next question...
Are you ready?
The sooner you prepare, the better off you'll be come April 30. Don't know what to organize? Start with your income slips like T4 slips, T4E slips for employment insurance benefits and stock transaction slips. Then, bring together supporting documents like bills, tuition and education receipts, transit pass receipts, childcare expenses, political contribution receipts and other major life expenses. Do it in small, but productive chunks and don't wait for your T4 to arrive to start getting organized.
How much did you really make in 2015?
You know your salary income, but make sure you know what else qualifies towards total income. Did you cash in some of your RRSP? Did you make money from the sale of your home? Did you rent out your apartment? Use your car for a ride-sharing service? Rent your tools to folks in your neighborhood? Know your income, what needs to be declared and whether or not any tax has been withheld.
There are many ways your kids can help you at tax time, but parents often don't know about them all. Childcare, sports and physical activities and university tuition are just a few credits to take advantage of. Just remember that, for programs like the fitness and arts tax credit, the activity doesn't have to be completed in 2015 – it just needs to have been paid for in 2015 so you can claim it on your 2015 return.
Did you take care of yourself?
Medical expenses are often some of the most missed credits each year, so familiarize yourself with the eligible expenses list to know what can be claimed and deducted. You can claim medical expenses for any 12-month period ending in 2015 on your 2015 tax return.
Are you taking care of loved ones?
The Disability Tax Credit is a major tax credit that can help offset costs if you or a family member are suffering from an illness or experiencing a disability. The tax system also accounts for caregivers. So, if you are living with a parent 65 or older or an infirm dependent, then there may be as much as $6,701 in additional credits you can claim. These are some of the lesser known tax deductions available, so take time to learn how they might help you.
Do you have a stock portfolio?
If you lost money in the market this year, capital losses can be deducted to reduce your tax liability. If you're facing a big capital gain, you may want to review your portfolio now to see if you can take a loss to offset your gain and reduce your liability. No matter how you approach it, the transaction needs to happen on or before December 24 to qualify for your 2015 tax return.
Did you make any charitable donations?
You receive a 15 percent federal tax credit for your first $200 of donations and 29 percent for any amount over. Once you add in provincial credits, your tax savings can be between 40 and 50 percent. The First Time Super Donor Credit can be a good program if it's been a while since you last contributed to your local charity, or if it's your first time.
Finally, Canadians should remember that, effective January 1, 2016, the marginal tax rate on middle-class incomes decreases from 22 per cent to 20.5 per cent, while a new tax bracket of 33 per cent comes into effect for Canadians earning more than $200,000 per year. This will result in tax savings for anyone making more than $45,282, to a maximum of $679 for people making $90,563 or more. But anyone making in excess of $216,975 will be paying more. These changes will not impact 2015 returns.
In addition, the Tax-Free Savings Account (TFSA) contribution limits will be rolled back from $10,000 to $5,500 for 2016. The $10,000 limit for 2015 will not be changed and taxpayers who contributed less than this will be able to carry forward the balance.
About H&R Block Canada
H&R Block Canada has more than 50 years of Canadian tax return experience. Headquartered in Calgary, Alberta, the company serves Canadian taxpayers in 1,200 offices across the country. H&R Block Canada, Inc. is a subsidiary of H&R Block, Inc., a diversified company with subsidiaries providing a wide range of financial products and services. Additional information about H&R Block Canada is available at 1-800-HRBLOCK or visit www.hrblock.ca.
SOURCE H&R Block Canada Inc.
For further information: Miriam Sherkey, Ketchum Public Relations, 416-355-7410, [email protected]