Tax Treasures: Top Five things that taxpayers fail to claim

The tax season is over and most of us have filed our taxes for year 2014.  When it comes to doing taxes, a lot of us are always short on time or lack information on what can be claimed. Therefore now is a good time to sit back and revisit your taxes and see if there is something that you missed that could have saved you money. A Canadian taxpayer can file an adjustment to their tax return any time for tax returns filed in last 10 years. So if you missed something, there is always an option of filing an adjustment on your returns.

The following are a few things that taxpayers generally fail to claim:

Moving Expenses:

A taxpayer can claim moving expenses if he has moved and established a new home in order to work or run a business at a new location. Eligible moving expenses include car/truck rentals, fuel costs, meals and lodging expenses and other expenses that are incurred during the process of moving. The minimum qualifying distance is 40 kilometers in order to claim moving expenses.

Parents and Grandparents:

A taxpayer can claim a caregiver amount if he has his or his spouse’s or common law’s parent or grandparent living in the same dwelling and the taxpayer is providing in-home care to the dependent parents or grandparents. The parent or grandparent has to be above 65 years of age.

Tuition Expenses:

If a taxpayer has gone to an education institution for an academic course and paid fees in the tax year, he can claim an education amount. This amount can also be transferred to a spouse, designated to a parent or carried forward for use in future years if the student did not make taxable income during the year. It is very common that students do not make taxable income while they are studying and therefore fail to understand the importance of claiming their tuition expenses. While the tuition expenses can be carried forward for any number of years, they have to be claimed in the year the tuition was paid and school was attended.

RRSP contributions:

It is fairly common knowledge that any money contributed to RRSP accounts reduces taxable income. However as we know that RRSP year starts from March and runs into the first 60 days of the next year, all financial institutions issue two tax receipts for each RRSP account. The first is for contributions in the “remainder of the tax year” and the second receipt is for “First 60 days of next tax year”.  A lot of  taxpayers who have set up an automatic monthly or biweekly contribution end up missing the second receipt as they file the taxes in February or simply miss the second receipt. This generally happens if the taxes are filed without professional help.

Charitable Donations:

If a taxpayer or taxpayer’s spouse or common law partner made a gift of money or other property to certain charitable institutions, he may be able to claim a no refundable tax credit. The maximum donation claim can be up to the limit of 75% of the net income of taxpayer. Also the donations can be carried forward up to five years.

So if you or your spouse have missed any of the above, it is highly recommended that you should see a professional such as Softron Tax and get your return assessed again.

Lets do it Right !!

Ontario Budget 2015: Promises, Few good steps and a Mountain of Debt

The Ontario 2015 budget was presented last week and while a few new projects were announced, the highlight of the budget remained the high deficit which currently sits at $8.5 billion. While the projections have been made for a balanced budget by 2018, the government plans to achieve most of it through spending cuts. However the budget proposes increase in spending in some key areas like infrastructure and public transit.

Following are the key points of the 2015 provincial budget:

  • OSAP Reforms for Students: The students will not have to deduct the value of their car or the part time work income when they apply for the Student loan. Also the maximum OSAP cap will be indexed to inflation for the future. The government will also be allowing to apply for OSAP grants and loan separately. This means that students can apply for grants while still having a choice of not taking on the debt for their education
  • Winning with winter tires: The government will make it mandatory for the insurance companies to give a discount to the drivers that use winter tires. Also the insurance companies will not be allowed to increase the premium for minor accidents that do not cause any serious injury
  • In the works….: The new projects that were announced in the budget include building of 8 new schools (six elementary and 2 secondary) and a new mega court for the GTA merging the provincial court houses which will consolidate operations for Ontario court of Justice and Superior court of justice The government will also be spending $11.9 billion on infrastructure development which is part of the $130 billion spending plan over 10 years.
  • The Promises: A few measures were announced in the budget where the details were limited. The Ontario Pension Plan will be established in January 2017 but the details on how it will work are yet to be announced. Similarly a plan to build a high speed train between Toronto and Windsor was announced with no time line or commitment.
  • Caring for the Sharing economy: The government renewed its commitment to support and help business like UBER which promote the sharing economy by helping them comply with the regulations
  • Power to the Nurses: A major step was announced where the nurse practitioners would be able to refer patients to the specialists. This is great news for Northern Ontario and some rural areas where primary care is provided by nurse practitioners as opposed to general physicians.

The government will also continue with the wage freeze in the public sector. However it remains to be seen that how the government will achieve the $4 billion deficit reduction projected for this fiscal year. A $2.8 billion “other programs cut” has been announced with no details and some revenue will be generated by selling off assets.