Search This Blog

Tuesday, April 16, 2013

Get More Money Back from your this year Income Tax Return (Extra Refund for vacation)

Income Tax Return Extra Refund in 2013


This is my third blog on personal income tax information. In this blog you find how to get more money on your tax return.
For the last 5 years I am filing my tax return using free software. There are 4 benefits of doing this.
 1. Saving of $150 when I could do it myself
2. I didn’t have my own business so I couldn’t deduct my accountant expenses
3. You care about your own money the most (using an accountant is kind of akin to hiring a financial adviser, right?)
4. This is good challenge
 

Tip 1-If you contribute to Charity (wait until you amount $200)


Did you know that the rate at which you're able to claim your charitable donations nearly doubles for amounts over $200? For that reason, you should not claim less than $200 in charitable donations in any year. Instead, if you want to optimize your tax situation, carry forward charitable donations (for a maximum of 5 years) and claim them all in a year where your income is higher. You can even combine your donations together with your spouse/common-law partner and claim them all on the return of the higher-income spouse, maximizing the credit.
 

Tip 2-If you have Transit Passes

Keep your Transit Passes: You can get a tax credit of 15%.  If you’re a student, keep your monthly pass because you can deduct the cost you pay for it on your taxes.  If you have a monthly transit pass you can claim those as well (don’t lose them or throw them away! They’re worth something even after the transit pass expires).  The transit passes have to provide detailed information (e.g duration of use, transit authority, amount paid) and are good for a Federal Tax Credit.
 

Tip 3-If you have extra money contribute to RRSP


On your Notice of Assessment, you'll find your maximum contribution limit for your RRSP. To maximize your tax advantages, it's usually best to contribute the full amount (for yourself and/or your spouse/partner). But beware! Contributing over your allowed amount may result in actually owing taxes. If you over-contribute, you'll likely need to complete a T1-OVP to calculate the excess contributions and to determine whether you'll pay a 1% tax on those excess contributions.
Do you know when to carry forward RRSP contributions and when to claim them?
Just because you contribute to an RRSP in 2008 does not mean that you need to deduct those contributions on your 2008 taxes. If your income in a tax year is low, consider carrying forward your contributions to a future year when your income may be higher. During low-income years, it's a good practice to contribute to your RRSPs - even if you're not going to deduct them - because any investment income you earn is sheltered from taxation.
 Contribute to your RRSP before March 1: The RRSP deadline is March 1– so hurry up fill yours! You can find how much you’re allowed to contribute on your Notice of Assessment (you know, that form that sent with that cheque?
 

Tip 4-If you have medical expenses

 

Most people know they can claim payments to a doctor, dentist, nurse, hospital and prescription medications and medical devices. But did you know you can claim:
•Laser eye surgery
•Batteries for a hearing aid
•Incremental costs of special foods for those with Celiac disease
•Certain amounts for attendant care/care in an establishment for a spouse or dependant
•Certain expenses for modifications to your home to accommodate a person with a disability
Did you know...?
•To claim medical expenses, they must exceed 3% of your net income
•To maximize your family's claim, you should claim all medical expenses for yourself, your spouse or common-law partner and your dependants (under 18) on one tax return
•It's usually better for the spouse with the lower income to claim medical expenses - but, if the lower-income spouse already has enough tax credits/deductions, claim them on the higher-income spouse's return or carry them forward
•If you have to travel more than 40km to get medical treatment not available locally, you can claim your travel costs as medical expenses - and more than 80km of travel lets you claim accommodation costs, too

Tip 5-If you have family (getting tax credit)


If you are supporting one or more individuals, you may be eligible to claim tax credits for them. You can often claim credits for your spouse/partner, children, infirm adults (if you are the caregiver) or certain other relatives living with you. Plus, you may also be eligible to receive a transfer of any unused credits they have on their personal income tax returns.
Additional family tax tips include:
•Donations & medical expenses: These can be claimed on a family basis, so you can receive maximum tax advantages if you file your family's tax returns at the same time
•Tuition & education amount transfers: Students often don't need to claim all of their tuition fees in order to reduce their taxes to zero - so consider transferring an unused portion of these amounts to a parent (the student does not have to live with the parent in order to do this)
•Camps/Boarding schools: You can often claim up to $175/week for a child under 6 years of age, $250/week for a child with a disability and $100 for any other eligible child
•Caregiver amount: You may be able to claim all or part of the Caregiver amount if you had a grandparent or a mentally/physically infirm dependant who is over 18, lives with you and had a net income of less than $18,081
List All Your Children
You can claim a maximum of $7,000 in child care expenses for each child younger than seven and $4,000 for each child older than seven but not yet seventeen on December 31 of the tax year. To receive the maximum claim for child care expenses paid, list all children in chronological order. No child care expenses this year? Still list all your children - you may be eligible for government assistance programs like the Canada Child Tax Benefit (CCTB) and the GST/HST credit.
Have You Registered for the Canada Child Tax Benefit?
In order to qualify for the Canada Child Tax Benefit (CCTB), you need to register any children you have and make sure that both you and your spouse/common-law partner file income tax returns every year. CCTB payments are tax-free.

Tip 6-If you have RESP

 

Contributions to a Registered Education Savings Plan (RESP) are not tax deductible. However, any earnings on that investment are sheltered from taxation and not subject to tax until withdrawn when the recipient begins post-secondary education.
Limits for contributing to RESP’s
•There is no annual limit for RESP contributions (prior to 2007, the annual limit was $4000)
•The lifetime RESP contribution limit is $50,000

Tip 7-.If You Plan your borrowing (business & investments)

 

Because interest paid on a business or investment asset loan is tax deductible, use borrowed money to purchase business & investment assets, and use your personal cash to purchase personal use assets, such as a house or vehicle. In order to deduct the interest cost, the direct use of the borrowed funds must be to purchase business or investment assets. If you are self-employed, borrow to invest in your business, not to purchase investment assets such as stocks or bonds.

Tip 8-If you Move to another province

 

The provincial tax rates you are subject to are based on those of the province where you live as of December 31 of that calendar year. If you are moving to a lower provincial tax rate province, move before the calendar year is up in order to be eligible for the lower rates in the year of filing. Likewise, if you are moving to a province with higher tax rates, wait - if you can - until after December 31 to qualify for one more year of lower tax rates.
Remember that it is the province in which you reside on December 31, not necessarily the province where you are employed, that determines your provincial tax rates.

Tip 9-If you have Student Loan


If you are repaying your student loans, you are likely paying interest. But there's good news: You can claim your interest paid on those loans. (Wouldn't getting a bigger refund be a great way to pay down your loans?) Also, you can carry forward student loan interest for up to 5 years. So, if you paid student loan interest in 2004 or in subsequent years and did not claim it on a previous tax return, you can claim it on your 2010 taxes.

Tip 10-.If you paid tuition

 

If you paid tuition to a specified educational or training institution during the tax year, you are eligible to claim a credit for your tuition fees paid. This not only applies to post-secondary education taken towards earning a degree but also to employment training courses not provided by your employer. Taxpayers are also eligible to claim an education credit for each month spent as a full-or part-time student.
If you’re a recent you can wait to claim your tuition credits for later on, when you’re earning the big bucks.
You can claim:
•Tuition fees for post-secondary education
•Lab expenses
•Library fees
•Examination fees
•Mandatory computer service fees
•Transit passes
•Some textbooks & books included in fees for correspondence courses
•Any GST, HST or PST included with the above
You cannot claim:

•Private tutoring
•Summer school programs
•Supply & equipment costs
•Student association fees
•Social or athletic fees
•Parking fees
•Board & lodging expenses
•Driver's education
•Music, art, drama or dance lessons not associated with a post-secondary educational program
•Camp fees
•Pre-school or play school fees
Carry Forward or Transfer Tuition & Education Credits
If you're a student, you may carry forward unused tuition & education credits to a year when your income may be higher - or you can transfer them to a supporting person (e.g., spouse, common-law partner, parent, and grandparent). NOTE: You can only transfer current-year education & tuition amounts, not balances that you carried forward from a previous year.

No comments:

Popular Posts

new

Related Posts Plugin for WordPress, Blogger...