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Alison's Money Rule
Last minute tax tips
Posted April 10, 2012
Originally Published April 3, 2012
Pay yourself first by double-checking all your tax deductions and credits.
There’s a very good reason why death and taxes often occupy the same sentence. Neither is appealing to contemplate. While death can sometimes be delayed there’s no avoiding the latter at this time of year.
As sure as April follows March every year there is a stampede to file returns once Easter and Passover indulgences have been digested. Your friend in these last minute situations is, in my opinion, the best tax book available for consumers. Essential Tax Facts: Simple tips for preparing your taxes so you can build wealth (2012 edition), by Evelyn Jacks, tax expert and founder of the Knowledge Bureau in Winnipeg.
Jacks points out that taxpayers leave thousands, sometimes hundreds of thousands of dollars on the table over their lifetimes by paying too much tax. It’s tough these days to increase your income. But being vigilant about every penny sent to Ottawa and your provincial government is something everyone can do.
Here are some of the changes Jacks highlights for 2011:
1. Children’s Arts Tax Credit – similar to the Fitness Tax Credit, parents can claim (or share the claim) for up to $500 if the child is enrolled in a broad range of artistic, environmental or cultural activities.
2. Tuition Tax Credit – Examination fee. This is claimable for examinations and pre-requisite study materials purchased in order to achieve a recognizable license or professional status.
3. Study abroad. The study period has been reduced to 3 weeks from 13 for students in full-time programs at Canadian universities and colleges. So if you are off to Italy to study Michelangelo’s David for 3 weeks as part of your degree, you can claim the tuition and education amount and withdraw Education Assistance Payments from an RESP.
4. Sharing an RESP with a sibling. Transferring from one RESP to another will not trigger repayment of the government Canada Education Savings Grant as long as the sibling receiving the funds is under 21.
5. Money from babes. The Canada Child Tax Benefit, Universal Child Care Benefit and GST credit can now be split 5050 between parents (for payments received after June 2011), assuming they live with the child.
One of Jacks’ top tax tips is a recommendation that couples (married or common-law) file taxes jointly to maximize credits and deductions including medical expenses and amounts for public transit, children’s fitness and arts and the new home buyer’s credit.
On the TV show Million Dollar Neighbourhood, a review by H&R Block found that nearly a third of tax filers made at least one error on their return.
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