Tax Planning: Maximizing Deductions and Credits for Families, Slides of Finance

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Tax Planning for You and Your

Family

2 – Tips for Claiming Tax

Deductions and Credits

Topics

Taxes, credits and deductions:

• Calculating your tax balance due or refund owing
• Deductions versus credits – what’s the difference?
• Transferring credits between spouses

Personal, spousal and dependant credits:

• Spousal/partner and wholly dependent person credits

Children:

• Child tax credit
• Child tax benefit
• Universal Child care expenses
• Child care expenses
• Children’s fitness tax credit
• Children’s art tax credit
• Adoption expense tax credit

Students:

• Tuition fees tax credit
• Education amount
• Textbook tax credit
• Transfer of unused student credits
• Tax exemption for scholarships and bursaries
• Tax credit for interest on student loans
• Other tax breaks for students

People with disabilities

• Disability credit
• Disability supports deduction
• RRSP withdrawals under the Home Buyers’ Plan
• Caregiver credits
• Registered Disability Savings Plans

Marital breakdown – Child and spousal support

payments

Other commonly available credits

• Medical expenses
• Political contributions
• Public transit passes
• First-time home buyers
• Other credits

Other commonly available deductions

• Legal fees
• Northern residents
• Other deductions

CPP and QPP contributions, EI and GST

• CPP contributions and EI premiums
• EI clawback
• GST/HST credit
• GST/HST rebates

Be Sure To Note – Definition of Spouse –

Income Tax Act

On page 20

• Common-law spouses are treated as spouses if they

are two people who ‘cohabit in a conjugal

relationship’ where either they have had a child

together, or they have cohabited for a least 12

continuous months at the time the determination is

made.

• Common-law & unmarried same-sex couples who

meet this criteria are treated identically to legally

married couples for all purposes relating to income

tax.

Be Sure To Note – Medical expenses

On page 32

• It pays to collect medical expenses over more than

one tax year , and then using them (not great from

a time value of money point of view…but you have

to realize that there are threshold and income

eligibility tests you must hurdle before they make

any positive impact on your taxes)

• Because of the 3% of net income threshold test…it

is best to combine all the family medical expenses

on one return and use them on the lower-income

spouse’s return , provided that the spouse has

enough tax to pay to use up the credit.

Be Sure To Note – Claw Backs

Page 36

• The Tax Act continues to be modified over time, to include

clawbacks of various kinds

• EI clawback if you have received benefits, but your income

has exceed the threshold of $55,250 in that taxation year)

• Other clawbacks now include OAS. (see chapter 20, section

20.3.2 - $67,668 through $109,764 net income threshold

range)

Be Sure To Note – Rebates

Page 37

• This text addresses GST/HST credits and rebates
• Credits are income tested (low income taxpayers are eligible)
• HST rebates…for employees who can claim deductions on

employment expenses.