Personal Tax Credits

You are probably trying to get over the fact that there are only 3 weekends left of skiing… I am too!

This is a reminder, not a gentle one, that your personal tax returns are due by the end of this month, on April 30th.

For those of you who haven’t filed them yet, you have 4 weekends left or 3 if you will be participating in the Powder Pedal Paddle Relay Race!

Here are few non-refundable tax credits, and if applicable to you, they can help reduce your taxes payable.

Medical Expenses
The expenses you incurred for yourself, your spouse and children under the age of 18 can be claimed. They usually include prescriptions, dental work (teeth cleaning, etc), eye exams, glasses, contacts, orthotics, physiotherapy, massage therapy, chiropractic and naturopathic visits. You can claim expenses for medical services as long as they were provided by members of a regulated profession. The premiums paid to insurance companies such as Blue Cross and Manulife, for example, are also eligible.

You can claim the mileage for medical treatments that are more than 40 km away from your home. If you travelled to Cranbrook to see a doctor, you can claim the mileage. If you travelled to Vancouver, Lethbridge or Calgary to see specialists, and you had to stay overnight, you can claim the related mileage, meals and hotel expenses. To claim overnight expenses, the medical treatment available needs to be more than 80 kms away from your home. Don’t forget to record the date of your appointments and name of your doctors and to keep this information with your tax documents.

Unfortunately, these expenses can only be used as a credit if they exceed 3% of your net income. Hold-on to these receipts, you may be able to use them next year. Any unclaimed receipts for a 12 month period ending in the tax year can be used. You could submit your receipts for the period of September 1, 2010 to August 31, 2011 in next year’s tax return for example. Add up your receipts for different time periods and see if it is possible to exceed the 3% of your net income.

Usually, these expenses are claimed on the tax return of the spouse with the lower net income. In some cases, it can be beneficial to move the expenses to the spouse with the higher net income, if the other spouse does not have enough tax payable to offset the medical expenses tax credit.

Children Fitness Expenses
The credit is available for children who are under the age of 16 at the beginning of the tax year. Expenses up to $500 can be submitted and you can receive a tax credit of up to $75 (15% of $500 or 15% of your expenses). You cannot claim the cost of the equipment purchased. This credit is only for the cost of the programs. To qualify, the programs must be ongoing either a minimum of eight consecutive weeks with a minimum of one session per week or in the case of children’s camps, five consecutive days.

Donations
You can claim them for the current year plus any unclaimed donations made in any of the previous five years or unused donations can be carried forward up to five years. If you have a low income for a year, keep your receipts and use them for a year when your income is higher. If your combined donations with your spouse exceed $200, they can be claimed on one tax return.

The CRA website is the best resource, of course. You may also find www.taxtips.ca helpful. Have fun!