Are You Self Employed?
Self-employed individuals are able to deduct more expenses than those who are employees; such as, automobile expenses, home office, entertainment and many others. For a complete listing of all applicable expenses see form T2125 on our links page.
Self-employment can fall under many different categories, from professionals to backyard mechanics. There are special deductions and credits available, please contact our tax specialists to see what we can do for you.
Are You Investing?
Investors pay tax on income earned from their investments at different tax rates depending on the type of income. There may be investment management fees or other carrying charges that are deductible from your income as well.
Proper tax planning and a sound financial plan can be of great assistance in minimizing the amount of tax you pay the government. For example, using a Systematic Withdrawal Plan to take income out of your investments is the most tax efficient strategy.
Do You Have Capital Gains?
Capital gains most commonly arise from the sale of capital property, investments (stocks, bonds and mutual funds), rental properties, or a cottage. Capital gains are taxed at 50% of the amount of the gain. Proper planning before the purchase or sale of capital property can help you to reduce the amount of tax that you pay.
Are You Buying a House?
If you are a first-time home buyer, you may be eligible for the home buyer’s tax credit. You might also be able to withdraw up to $25,000 from your RRSP tax-free to help you buy a home. You have up to 15 years to pay this money back. For a complete description of the Home Buyer's Tax Credit please follow the link to the CRA website. www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html
Do You Have Dependents?
A Dependent is defined as (by the CRA):
- your parent or grandparent by blood, marriage,
- common-law partnership, or adoption; or your child, grandchild, brother, or sister by blood, marriage, common-law partnership, or adoption and either under 18 years of age, or mentally or physically impaired.
Notes
Your dependant may live away from home while attending school. If the dependant ordinarily lived with you when not in school, we consider that dependant to live with you for the purposes of this amount.
For the purposes of this claim, your child is not required to have lived in Canada, but still must have lived with you. This would be possible, for example, if you were a deemed resident living in another country with your child.
The caregiver amount may be available to you if the dependent is over 65 years old.
Are You Retiring or Retired?
You may have pension income that can be split with your spouse in order to reduce the amount of taxes paid. This is one of the most beneficial tax changes that has happened recently, almost 500,000 Canadians split income this past tax season. It is important to see your Tax Specialist before and after you retire to ensure your tax planning strategy is best suited for your situation.
Are You Claiming Medical?
The list of medical expenses that one can claim is too long to list here. Follow this link to the CRA website and pages that outline what may be an eligible medical expense. Claiming your eligible medical expenses provides you with a tax credit that can be used to reduce the tax paid.
Are You a Student?
Students can claim tuition fees paid, public transit passes (weekly or monthly), and rent (unless in residence). Income from university and government scholarships/grants/bursaries are tax-free. Unused tuition tax credits (up to $5000) can be transferred to a spouse or parent.
If your question has not been answered please email us, and we will get back to you as soon as possible!