Canadian tax tips

Tax returns for individuals have to be filed by the end of April. When I have tax-related questions, I like to poke around TaxTips.ca, where an answer is often to be found. And just browsing the site can be educational. I recently asked TaxTips.ca to provide five of their best tips. Here is what they said:

1. Tax returns can be submitted by NetFile now. However, most people have not yet received all their tax information slips. Make sure you have all of your slips before filling, to avoid having to amend your return later.

2. Pension splitting – if one spouse is in a higher tax bracket and has pension income eligible for the pension tax credit, some of it can be allocated, on your tax return, to the
lower-income spouse.

3. If you have a parent or grandparent over the age of 65 living with you, even if they are not dependent on you, you could be eligible for the caregiver amount of $4,095 (federal),
if their net income is less than $18,081. This can also be claimed for other relatives over the age of 17 who are living with you, if they are dependent on you due to mental or physical impairment. Each province and territory also has a caregiver tax
credit.

• tax credits related to children:

• The federal child amount tax credit for children under 18.

• The federal child fitness tax credit, with an additional
credit for disabled children.

4. Tax Shelter Donations Involving “Gifts” – Just a reminder that there are many

tax shelter gifting schemes, for which the donations claimed are being reassessed and denied by Canada Revenue Agency. A “tax shelter number” does not guarantee that the donation amount will be allowed.

5. Has your tax situation changed? If you are an employee, with income tax being withheld from your pay, you should file new Federal and Provincial TD1 forms for 2009 with your employer under some circumstances, such as:

• new baby (you will get the child amount tax credit)

• you turn 65 this year (age amount tax credit)

• you have become eligible for the disability tax credit

• a low-income parent/grandparent over 65 moved in with you, making you eligible for the caregiver tax credit

This will allow you to have your income tax withholdings reduced.

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