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Seniors: Enjoy your golden years with these tax credits and benefits

The Canada Revenue Agency (CRA) wants seniors to get the tax credits, deductions, and benefits they are eligible for.

Here are 11 of the most common credits and benefits for seniors.

  1. Pension income splitting – If you receive a pension, you may be eligible to split up to 50% of your eligible pension income with your spouse or common-law partner.
  2. Guaranteed income supplement – If you receive the guaranteed income supplement or allowance benefits under the old age security program, you can renew your benefit by filing your return by the filing deadline.
  3. Registered retirement savings plan (RRSP) – Deductible RRSP contributions can reduce your tax bill. You have until December 31 of the year in which you turn 71 to contribute to your RRSP.
  4. Registered disability savings plan (RDSP) – This savings plan can help families save for the financial security of a person who is eligible for the disability tax credit. RDSP contributions are not tax deductible and can be made until the end of the year in which the beneficiary turns 59.
  5. Goods and services tax/harmonized sales tax (GST/HST) credit – You may be eligible for the GST/HST credit, a tax-free quarterly payment that helps your offset all or part of the GST or HST you pay. To receive this credit, you must file an income tax and benefit return every year, even if you did not receive income. If you have a spouse or common-law partner, only one of you can receive the credit. The credit will be paid to the person whose return is assessed first. 
  6. Medical expenses – You may be able to claim the total eligible medical expenses you or your spouse or common-law partner paid for you, your spouse or common-law partner, or you or your spouse’s or common-law partner’s children who were born in 1999 or later, provided the expenses were made over any 12-month period ending in 2016 and were not previously claimed. This can include amounts claimed for attendant care or care in an establishment.
  7. Age amount – If you were 65 years of age or older on December 31, 2016, and your net income was less than $83,427, you may be able to claim up to $7,125.
  8. Pension income amount – You may be able to claim up to $2,000 if you reported eligible pension, superannuation, or annuity payments on your tax return.
  9. Disability amount – If you, your spouse or common-law partner or your dependent has a severe and prolonged impairment in physical or mental functions and meets certain conditions, they may be eligible for the disability tax credit (DTC). To determine eligibility, you must complete Form T2201, Disability Tax Credit Certificate and have it certified by a medical practitioner. Canadians claiming the credit can file online whether they have submitted the form to the CRA for that tax year or not. 
  10. Family caregiver amount – If you are caring for a dependant with an impairment in physical or mental functions, you may be able to claim up to $2,121 when calculating certain non-refundable tax credits. Non-refundable tax credits reduce your federal tax. If the total of the non-refundable tax credits is more than your federal tax, you will not get a refund for the difference.
  11. Public transit amount – You may be able to claim the cost of monthly or annual public transit passes for travel within Canada on public transit in 2016.

 

For more tax questions or additional information, contact any member of our tax team.

This information was made available at: http://www.cra-arc.gc.ca/nwsrm/txtps/2017/tt170117-eng.html

Changing your marital status may impact your taxes and benefits

Did you recently get married or enter into a common-law partnership? Did you separate or divorce? Were you recently widowed? It is important to inform the CRA about changes in your marital status to make sure you receive the right amount in benefit and credit payments. When your marital status changes, your benefit and credit payments are directly impacted. The CRA will recalculate your benefits and credits based on:

  • your updated family net income
  • the number of children you have in your care and their ages
  • the province or territory in which you live

Your benefit payments will be adjusted the month after the month your marital status changes. 

How do you tell the CRA that your marital status has changed?

You can tell the CRA about your new marital status and the date of the change by using one of the four options: 

When do you have to tell the CRA?

If you recently got married, divorced, became widowed, or entered into a common-law partnership, you must tell the CRA about the change in marital status by the end of the month after the month your status changed. For example, if your status changes in March, you must tell the CRA by the end of April.

If you have become separated, do not notify us until you have been separated for at least 90 days

What if you changed your name?

If you changed your name, let the CRA know as soon as possible. Call us at 1-800-959-8281, so we can update our records. 

 

For more tax questions or additional information, contact any member of our tax team.

This information was made available at: http://www.cra-arc.gc.ca/nwsrm/txtps/2017/tfsk5-eng.html

Seven ways your family can save at tax time

Raising a family can be expensive, but there are many benefits, credits, and deductions that can help your family with costs during the year. They could even lower the amount you owe at tax time! However it is important to file on time if you want your credits.

Check out these potential savings:

  1. Canada child benefit (CCB) - The CCB is a tax-free monthly payment made to eligible families to help them with the cost of raising children under the age of 18. The CCB might include the child disability benefit and any related provincial and territorial programs. You could get up to $6,400 annually for each child under the age of 6 and $5,400 annually for each child aged 6-17. Apply for the CCB in one of the following ways:
  2. Child care expenses – Did your kids attend daycare or a child care program in 2016? You or your spouse or common-law partner might be able to claim what you spent on eligible child care in 2016.
  3. Working income tax benefit – If you are a working family or individual with a low income, you might be eligible for this refundable tax credit intended to provide tax relief to low-income Canadian workers. Eligible individuals and families may be able to apply for advance payments.
  4. Child disability benefit– You might be eligible for this tax-free benefit if you care for a child under the age of 18 who is eligible for the disability tax credit.
  5. Goods and services tax/harmonized sales tax (GST/HST) credit – The GST/HST credit is a tax-free quarterly payment that helps families and individuals with low or modest incomes offset all or part of the GST and HST that they pay. If you are eligible, you will receive your tax-free payments in January, April, July and October. The amount of your payment will depend on your family income and the number of children you have in your care. A family could get up to $552 per year, plus an additional $145 annually for each child.
  6. Children’s fitness tax credit – Claim eligible fees paid in the year for registration or membership for your or your spouse’s or common-law partner’s child in a prescribed program of physical activity. For 2016, the maximum eligible fees in the year is reduced from $1,000 to $500, but the additional amount of $500 for children eligible for the disability tax credit has not changed. Therefore the maximum credit is reduced to $75 ($150 for a child eligible for the disability tax credit).
  7. Children’s arts tax credit - Claim eligible fees paid in the year for the cost of registration or membership of your or your spouse’s or common-law partner’s child in an eligible program of artistic, cultural, recreational or developmental activity. For 2016, the maximum eligible fees in the year is reduced from $500 to $250, but the additional amount of $500 for children eligible for the disability tax credit has not changed. Therefore the maximum credit is reduced to $37.50 ($112.50 for a child eligible for the disability tax credit).

 

For more tax questions or additional information, contact any member of our tax team.

This information was made available at: http://www.cra-arc.gc.ca/nwsrm/txtps/2017/tt170214-eng.html

 

Six things to avoid at tax time

These tips from the Canada Revenue Agency (CRA) could save you time and money! At tax time, avoid the following six things:

1. Not doing your taxes

Even if you have not received income for 2016, you should still file your income tax and benefit return. You may be eligible for a refund, credits and benefits such as the Canada child benefit and the goods and services tax/harmonized sales tax (GST/HST) credit. To get your benefit and credit payments, you have to file a tax return every year so that the CRA can calculate the amount you should receive.

If you have a modest income and a simple tax situation, you may be able to get help doing your taxes at a free tax preparation clinic near you. Find out more at cra.gc.ca/volunteer.

2. Not reporting all your income

Make sure you report all your income. You should have received most of your slips, such as T4 slips, from your employer, payer, or administrator by the end of February. If you have not received, or have lost or misplaced a slip for 2016, ask the issuer of the slip for a copy. If you register with My Account you may have access to electronic copies of your slips. If you are still missing information, use any documents you have and enter estimated amounts.

Sold your principal residence in 2016? Starting with sales in the 2016 tax year, you are required to report basic information (date of acquisition, proceeds of disposition, and address) on your income tax and benefit return when you sell your home to claim the full principal residence exemption.

If you file your return online, you can save time by using Auto-fill my return, available through some certified tax preparation software. This secure service will automatically fill in certain parts of your return with information the CRA has on file. To use Auto-fill my return, you must be fully registered for My Account. For more information, go to cra.gc.ca/auto-fill.

If you already filed your return but did not report income from a slip, you can change your return by using the “Change My Return” feature in My Account or by filling out Form T1-ADJ, T1 Adjustment Request, and sending it to your tax centre.

If you want to correct earlier mistakes and put your tax affairs in order, you can make a voluntary disclosure through the CRA’s Voluntary Disclosures Program. The program gives taxpayers a second chance to correct their taxes.

3. Making a claim you’re not entitled to

Various non-deductible amounts, such as funeral expenses, wedding expenses, loans to family members, a loss on the sale of a home designated as a principle residence, and other similar amounts, are sometimes claimed in error.

If the CRA determines that a taxpayer has made a mistake or made a claim to which they are not entitled, their return is adjusted. See the reasons for the most frequent adjustments at cra.gc.ca/commonadjustments.

4. Missing out on tax credits, benefits, and deductions

The Government of Canada has credits, benefits, and deductions that may apply to your tax situation. Before filing your return, go to cra.gc.ca/getready to learn about the new and existing tax measures that could help you save money. Some certified tax software programs offer suggestions on credits, benefits, and deductions you can apply for, based on the information you enter.

5. Filing late

If you have a balance owing and do not file your return on time, the CRA will charge you a late-filing penalty. The penalty is 5% of your balance owing on the due date of your return, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. Even if you cannot pay your balance owing by the filing deadline, you can avoid the late-filing penalty by filing on time.

If you cannot pay the amount you owe by the due date, it is best to contact the CRA before then. The CRA will work with you to resolve your tax debt or other government programs debt. You may qualify for a payment arrangement or taxpayer relief.

6. Not keeping receipts and records

Keep your receipts and documents for at least six years after you file your return. If the CRA chooses to review your return, you will need to send your receipts to the CRA to support your claims.

 

For more tax questions or additional information, contact any member of our tax team.

This information was made available at: http://www.cra-arc.gc.ca/nwsrm/txtps/2017/tt170209-eng.html

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