Tax Tips

 

Tax law can be complex. There's much to know to be sure you're doing all you can to get what you deserve. Here are some personal and business tax tips to get you started. We update this information regularly, so check back soon for new tips. 

Personal Tax Tips

  • Charitable Donations - You do not have to claim, on your income tax and benefit return for the current year, the eligible amount of gifts you made in the year. It may be more beneficial for you to carry them forward and claim them on your return for any of the next five years. No matter which choice you make, you can only claim them once.
  • Medical Expenses - Many people don't bother to add everything up because of the income-related threshold: only expenses that exceed the lesser of $2,171 or three percent of net income can be claimed. But what they don't realize is that there's a long list of expenses that qualify, so it's often not too difficult to reach that threshold.Travel expenses even qualify when people need to go more than 40 kilometers to get medical treatment that isn't available closer to home.
    Medical expenses can be claimed by either spouse or partner.
  • Ontario Trillium Benefit 
    You are able to deduct a provincial tax credit relating to rent or property taxes paid by you or for you during the calendar year. Also if you lived in a student residence, long-term care home or if you lived on a reserve and had to pay energy costs.
  • Home Buyer's Plan (HBP)          

The HBP is a program that allows you to withdraw funds from your registered retirement savings plan (RRSPs) to  buy  or build a qualifying home. You can withdraw up to $25,000 in a calendar year.

There are also a number of refundable tax credits that help reduce or eliminate the amount of tax you owe. Excess credits may be paid as a refund after your personal income tax return is assessed, even if you pay no income tax.

Be sure to take advantage of all income-splitting and pension sharing opportunities.


Those 65 and over can spit several kinds of pension income, such as life annuity payments from a company pension plan, RRIF payments and payments from an RRSP or deferred profit sharing plan. Income splitting can save thousands of dollars in tax if income is shifted from someone in a higher tax bracket to someone in a lower tax bracket. 


Tax Benefits for Students
Several credits for students - such as the tuition, education and textbook credits - can be transferred to a spouse or parent once the credits are used to reduce the student's tax payable to zero. The credits can also be carried forward indefinitely so the student can use them later when he or she starts earning money.
 

Volunteer firefighters who perform at least 200 hours of service a year also get a break, courtesy of a volunteer firefighter tax credit. It's worth a maximum of $450.


Business Tax Tips


  • Business Automobiles - You can claim deductions for the business-related use of an auto using either the standard mileage rate method or the actual expense method. You should use the method that will yield the largest deduction.
  • Hiring Your Children - If you have your own business, consider hiring your child to work after school or on vacations. The wages you pay your child for bona fide work are tax deductible.
  • Home office expenses - To qualify for a deduction related to an office in the home, you must have an area of your home used exclusively as your principal place of business. This includes a place of business where you meet or deal with patients, clients, or customers.
  • Profit-sharing plans - Unlike other plans, a profit-sharing plan is flexible. It can be designed so that the employer is not required to make an annual contribution.

This list is far from exhaustive. Call us today to set up a time to discuss your specific situation and needs.