TAX TIP #1

File your income taxes on time in order to avoid the late filing penalties. Individuals must file their tax returns by April 30th of the following tax year (self employed individuals and their spouses have until June 15th, but any tax owing must be paid by April 30th). Even if you don’t plan on or are unable to pay your taxes, you should still file on time to avoid the penalty. If you are missing slips use other items to estimate your income and you can adjust your tax return when you get the slips at a later date.

TAX TIP #2

Contribute to your RRSPs to lower your overall tax bill. Eligible RRSP contributions can be made during the calendar year or within 60 days of the calendar year end. The RRSP contribution deadline for amounts to be deductible on your 2008 tax return is March 1, 2009. You can find your 2008 RRSP contribution limit on your notice of assessment from your 2007 taxes. Just remember every RRSP withdrawal will create taxable income in the year of the withdrawal (which will hopefully be at a lower tax rate).

TAX TIP #3

Individual tax payers are able to claim a tax credit for NON-REIMBURSED medical expenses. Fees paid to private health plans are considered deductible medical expenses. Medical expenses can be incurred on the taxpayers own behalf, their spouse or common law partners or the children of the taxpayer. You can claim medical expenses for any 12 month period that ends in the tax year. If your married or in a common law relationship it may be beneficial to claim the medical expenses on the person with the lower income.

TAX TIP #4

In most cases deductible child care expenses must be claimed by the spouse or common law partner with the lower net income. Deductible child care expenses are those expenses that are paid for the care of an eligible child in order to allow a parent to earn employment income, carry on a business or attend an educational institution. An eligible child is a child of the taxpayer, their spouse or common law partner or a child who is dependent on the taxpayer, or their spouse or common law partner who is under the age of 16. Day and overnight camps and sports camps may be considered deductible child care expenses. Consult your certified general accountant to see what deductions you are eligible for.

 

DON’T FORGET ABOUT

  • claiming donations made by both spouses or common law partners on one tax return since there is a larger credit for donations made over $200.
  • deducting your safety deposit fees for the year.
  • claiming the disability tax credit, if a qualified person (ex. Your doctor) can certify that you have a severe and prolonged mental or physical impairment which restricts your ability to perform basic activities of daily living. To qualify for the tax credit form T2201 (disability tax credit certificate) must be completed and submitted to the government.