Seven ways your family can save at tax time

Raising a family can be expensive, but there are many benefits, credits, and deductions that can help your family with costs during the year. They could even lower the amount you owe at tax time! However it is important to file on time if you want your credits.

Check out these potential savings:

  1. Canada child benefit (CCB) - The CCB is a tax-free monthly payment made to eligible families to help them with the cost of raising children under the age of 18. The CCB might include the child disability benefit and any related provincial and territorial programs. You could get up to $6,400 annually for each child under the age of 6 and $5,400 annually for each child aged 6-17. Apply for the CCB in one of the following ways:
  2. Child care expenses – Did your kids attend daycare or a child care program in 2016? You or your spouse or common-law partner might be able to claim what you spent on eligible child care in 2016.
  3. Working income tax benefit – If you are a working family or individual with a low income, you might be eligible for this refundable tax credit intended to provide tax relief to low-income Canadian workers. Eligible individuals and families may be able to apply for advance payments.
  4. Child disability benefit– You might be eligible for this tax-free benefit if you care for a child under the age of 18 who is eligible for the disability tax credit.
  5. Goods and services tax/harmonized sales tax (GST/HST) credit – The GST/HST credit is a tax-free quarterly payment that helps families and individuals with low or modest incomes offset all or part of the GST and HST that they pay. If you are eligible, you will receive your tax-free payments in January, April, July and October. The amount of your payment will depend on your family income and the number of children you have in your care. A family could get up to $552 per year, plus an additional $145 annually for each child.
  6. Children’s fitness tax credit – Claim eligible fees paid in the year for registration or membership for your or your spouse’s or common-law partner’s child in a prescribed program of physical activity. For 2016, the maximum eligible fees in the year is reduced from $1,000 to $500, but the additional amount of $500 for children eligible for the disability tax credit has not changed. Therefore the maximum credit is reduced to $75 ($150 for a child eligible for the disability tax credit).
  7. Children’s arts tax credit - Claim eligible fees paid in the year for the cost of registration or membership of your or your spouse’s or common-law partner’s child in an eligible program of artistic, cultural, recreational or developmental activity. For 2016, the maximum eligible fees in the year is reduced from $500 to $250, but the additional amount of $500 for children eligible for the disability tax credit has not changed. Therefore the maximum credit is reduced to $37.50 ($112.50 for a child eligible for the disability tax credit).

 

For more tax questions or additional information, contact any member of our tax team.

This information was made available at: http://www.cra-arc.gc.ca/nwsrm/txtps/2017/tt170214-eng.html

 

Six things to avoid at tax time

These tips from the Canada Revenue Agency (CRA) could save you time and money! At tax time, avoid the following six things:

1. Not doing your taxes

Even if you have not received income for 2016, you should still file your income tax and benefit return. You may be eligible for a refund, credits and benefits such as the Canada child benefit and the goods and services tax/harmonized sales tax (GST/HST) credit. To get your benefit and credit payments, you have to file a tax return every year so that the CRA can calculate the amount you should receive.

If you have a modest income and a simple tax situation, you may be able to get help doing your taxes at a free tax preparation clinic near you. Find out more at cra.gc.ca/volunteer.

2. Not reporting all your income

Make sure you report all your income. You should have received most of your slips, such as T4 slips, from your employer, payer, or administrator by the end of February. If you have not received, or have lost or misplaced a slip for 2016, ask the issuer of the slip for a copy. If you register with My Account you may have access to electronic copies of your slips. If you are still missing information, use any documents you have and enter estimated amounts.

Sold your principal residence in 2016? Starting with sales in the 2016 tax year, you are required to report basic information (date of acquisition, proceeds of disposition, and address) on your income tax and benefit return when you sell your home to claim the full principal residence exemption.

If you file your return online, you can save time by using Auto-fill my return, available through some certified tax preparation software. This secure service will automatically fill in certain parts of your return with information the CRA has on file. To use Auto-fill my return, you must be fully registered for My Account. For more information, go to cra.gc.ca/auto-fill.

If you already filed your return but did not report income from a slip, you can change your return by using the “Change My Return” feature in My Account or by filling out Form T1-ADJ, T1 Adjustment Request, and sending it to your tax centre.

If you want to correct earlier mistakes and put your tax affairs in order, you can make a voluntary disclosure through the CRA’s Voluntary Disclosures Program. The program gives taxpayers a second chance to correct their taxes.

3. Making a claim you’re not entitled to

Various non-deductible amounts, such as funeral expenses, wedding expenses, loans to family members, a loss on the sale of a home designated as a principle residence, and other similar amounts, are sometimes claimed in error.

If the CRA determines that a taxpayer has made a mistake or made a claim to which they are not entitled, their return is adjusted. See the reasons for the most frequent adjustments at cra.gc.ca/commonadjustments.

4. Missing out on tax credits, benefits, and deductions

The Government of Canada has credits, benefits, and deductions that may apply to your tax situation. Before filing your return, go to cra.gc.ca/getready to learn about the new and existing tax measures that could help you save money. Some certified tax software programs offer suggestions on credits, benefits, and deductions you can apply for, based on the information you enter.

5. Filing late

If you have a balance owing and do not file your return on time, the CRA will charge you a late-filing penalty. The penalty is 5% of your balance owing on the due date of your return, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. Even if you cannot pay your balance owing by the filing deadline, you can avoid the late-filing penalty by filing on time.

If you cannot pay the amount you owe by the due date, it is best to contact the CRA before then. The CRA will work with you to resolve your tax debt or other government programs debt. You may qualify for a payment arrangement or taxpayer relief.

6. Not keeping receipts and records

Keep your receipts and documents for at least six years after you file your return. If the CRA chooses to review your return, you will need to send your receipts to the CRA to support your claims.

 

For more tax questions or additional information, contact any member of our tax team.

This information was made available at: http://www.cra-arc.gc.ca/nwsrm/txtps/2017/tt170209-eng.html

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