“It’s tax season! Yey! It’s time to get my refund”
That’s what we always hear from people when it comes to filing their tax returns. But the million dollar question is… are you sure you are claiming all the tax credits you are entitled to, or worst, claiming the tax credits that you are not entitled to.
If you didn’t claim a tax credit when you filed your taxes, there is no way Canada Revenue Agency (CRA) will contact you to claim it. CRA would be like…”claim it or you lose it”.
If you claimed a tax credit that you are not entitled to, CRA will hunt you down and get the tax refund back from you. Ouch!. You may not want to pay CRA back the $2,000 tax refund that they gave you three years ago.
The way to avoid these mishaps is to have a qualified accountant prepare your taxes. It’s better to pay a couple hundred bucks now with an increased tax refunds or paying interest and penalties years later for incorrect tax returns being filed.
Here are some tips for you for 2010 year:
Public Transit Passes amount. You can claim the cost of public transit passes for travel within Canada. You can claim the cost of transit passes for yourself, spouse, and/or your dependent children who are under 19 years of age on December 31, 2010. Do not include the receipts and passes when filing your return. You should keep then on hand in case the CRA asks to review them.
First-Time Home Buyer’s Tax Credit. If you are a first time home buyer in 2010, you are eligible to receive a non-refundable tax credit of $5,000 which generates a maximum of $750 tax savings/refunds. Each family receives one tax credit, if you are married or living common-law, you claim only one tax credit.
The new home that is acquired must be the one that you or your spouse intends to occupy as the principal place of residence no later than one year after the acquisition.
Children’s Fitness Tax Credit. The Government of Canada is supporting families through a non-refundable tax credit to parents who pay to register their children in prescribed programs of physical activity. Under the Children’s Fitness Tax Credit, you can claim up to $500 per year for eligible expenses paid for each child, as long as the child is under the age of 16.
To be eligible, the program that are held once a week must last a minimum of eight weeks. The programs must be supervised, suitable for children and include a significant amount of physical activity that involves cardio and one or more or balance, flexibility, muscular endurance or muscular strength. Examples would be dance classes, soccer games, ballets. The organization will determine the fee amount that is eligible for the credit. Make sure you get a receipt.
Tuition and education tax credit. You can claim any tuition fees paid in 2010 that are over $100. If you didn’t work when you were a student, or had very little income, you don’t need to use all of your tuition and education amount when you file your taxes for 2010. You can carry forward the unused part and claim it in the future. You can also transfer the unused portion to your spouse or parents.
RRSP. It is one of the best tax planning strategies out there. Contributing money to an RRSP can lower your income for tax purposes, so you pay less in taxes.
Also, the income earned in your RRSP is not taxed until it is withdrawn. The RRSP deadline for tax year 2010 is March 1, 2011.
Express Tax & Accounting specializes in preparing personal and corporation tax returns and bookkeeping services. Its office is located in 714 Sargent Avenue, Winnipeg. They can be reached at 880-8192. They provide fee tax and accounting consultation for free. Services are available in English, Tagalog and Ilocano.
