A baker's dozen of our top tax tips for 2010
TORONTO, April 7 /CNW/ - Ernst & Young is serving up practical tips to help save you money this tax season.
1. Rewarding renovations. If you undertook any home renovations,
remember the one-time home renovation tax credit. Projects undertaken
between January 27, 2009, and January 31, 2010, are eligible for the
credit, up to a maximum of $1,350.
2. Home, sweet home. If you bought your first home after January 27,
2009, you are entitled to a $750 credit.
3. Turn your losses into gains. Capital losses can be applied against
capital gains. Your net capital losses for 2009 can be carried back
three years and applied to net gains in any year from 2006 to 2008.
If you incurred business investment losses, you can claim them
against any income in the year, not just capital gains. And if you
have net capital losses from prior years, you can apply them to
reduce taxable capital gains realized in 2009.
4. Share the love... and your income. If you received eligible pension
income in 2009, up to 50% can be reported in your spouse's or
common-law partner's tax return.
5. Helping others pays off. If you gave to charity in 2009, 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 or
claim at once for the higher-rate credit. If you've donated stocks,
bonds or mutual funds, additional tax benefits exist.
6. 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
7. Keeping it in the 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 tax reductions. Make sure you
look into the possibilities.
8. Who's 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.
9. Check your files - twice. Some old receipts may still have value in
your 2009 return. Receipts for charitable donations and medical
expense receipts could be of particular interest.
10. Moving on up? If you moved in 2009 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.
11. 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 older teens can
also mean a refundable tax credit or GST credit.
12. 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 2009.
13. 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 2009 Personal Tax Returns offers more detail on these suggestions and ideas. Of course, it doesn't hurt to get started on 2010 tax savings now. Look into how you can take advantage of a tax-free savings account this year. RRSPs are also a great way to optimize tax-deferred investment income.
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