As Benjamin Franklin once mentioned, “Nothing is certain except for death and taxes”. With this said, we would like to share some great tax deductions that Canadians often miss out on. With the right tax strategy, you are able to utilize tax deductions in order to reduce your income and lower your tax bracket. From student loans to old age, there are deductions available for everyone. Find our list below of 9 credits that you may have overlooked:
Age
You are able to claim this deductible if you were 65 years of age or older on December 31, 2012, and your net income (line 236) is less than $78,684. (Line 301)
Spouse or Common-Law Partner
This deduction can be claimed if, at any time of the year, you supported your spouse or common-law partner and his/her net income was less than $10,822. This deduction can only be used for one person for the same year. (Line 303)
Amount for Infirm Dependents Age 18 or Older
As you know, you can claim a deductible for dependents below the age of 18, but you are also eligible for a maximum of $6,402 (including the $2,000 family caregiver amount) for each of your or your spouse’s/common-law partner’s dependent children or grandchildren if that person had an impairment in physical or mental functions, and was born in 1994 or earlier. (Line 306)
Pension Income
You may qualify for a deduction of up to $2,000 if you reported an eligible pension, superannuation, or annuity payment on line 115, line 116, and/or line 129 of your return. (Line 314)
Interest Paid on Student Loans
You may be eligible to claim an amount for the interest paid on your loan in 2012, or the preceding five years for post-secondary education. This deductible is unique to student loans, and cannot be used for a personal loan, line of credit, or a student loan received from another country. The loan must have been received under the Canada Student loans Act, the Canada Student Financial Assistance Act, or a similar provincial or territorial government law. (Line 319)
Keep in mind that you can carry the interest forward and apply it on your return for any of the next five years. If you have no tax payable for the current year, it would be smart to not claim it on your current tax return.
Your Tuition, Education and Textbooks
Claims are based on fees for a calendar year, not the academic year. You are able to be reimbursed for fees as long as the reimbursed amount is included in your income. Only the eligible tuition fees minus the amount received as a tuition reimbursement can be deducted. (Line 323)
For Parents: Tuition, education, and textbooks can also be transferred from a child on Line 324. The maximum amount transferred from a child is $5,000 minus the amounts that he/she uses. Keep in mind that amounts carried forward from previous years can not be transferred.
Public Transit Amount
You are able to claim the cost of monthly public transit passes (or more than a month) for the 2012 year. (Line 364)
Children’s Fitness
You are able to claim a maximum of $500 per child for fees paid in 2012 regarding the cost of registration and membership for your or your spouses/common-law partner’s child in a prescribed program of physical activity. (Line 365)
Children’s Arts
You are able to claim a maximum of $500 per child for fees paid in 2012 regarding the cost of registration and membership for your or your spouses/common-law partner’s child in a prescribed program of artistic, cultural, recreational, or developmental activity. (Line 370)
It is important to take your time while filing your taxes, and make sure you research the tax deductions that qualify for you. As always, we recommend speaking with an accounting professional to review the above-noted tax deductions before strategically engaging in the implementation of any of them. For a full list of Canadian deductions, you can visit the CRA website.
