Select Personal Tax Tips

As we are full-on into personal tax return season, I wanted to give a quick listing of some recent tax topics that I think may have some broader application.  For each noted tax topic, I’ve also provided links to the Canada Revenue Agency website, which has more information available.

1.       If you are married or in a common-law relationship and in receipt of any pension income from a company pension plan or a registered retirement income fund, check to see if a Joint Election to Split Pension Income is to your advantage.  Where the spouse receiving the pension income is making more than the other spouse, this Election may reduce the overall tax burden of the couple my moving some of the pension income off of the higher-income spouse and reporting it on the lower income spouse’s return.  Even where two spouses are making roughly the same amount of income, the Election may allow a second claim of the available pension income tax credit for the spouse not otherwise collecting eligible pension income, thereby creating some tax savings.  The applicable form is T2032.  More information can be found at:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/pnsn-splt/menu-eng.html

2.       If you sold investments in the current year for a net loss (e.g. sale of shares, mutual funds, etc), don’t forget to consider whether you can carry the loss back to offset taxable capital gains in a preceding year.  For net capital losses realized in 2013, you can carry the loss back to either your 2010, 2011 or 2012 tax years.  The Request for Loss Carryback form is Form T1A.  More information is available at:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/lss-ddct/prvs/menu-eng.html

3.       Do you have a dependent who qualifies for the disability tax credit?  If so, if you are the parent or guardian, you may be able to claim the tax credit on your tax return where the dependent lives with you and makes little to no income.  There may also be claims available for the Caregiver Amount, as well as the opportunity to adjust prior year returns to retroactively claim these tax credit.  Your dependent may also qualify for a Registered Disability Savings Plans, which offers government grants that can match or exceed contributions made to the plan.  More information is available at:
http://www.cra-arc.gc.ca/disability/

4.       Check out my Twitter account.  I listed therein several other tax tips and traps that I like to look out for, some of which you might find useful.  They cover medical expenses, donations, child care expenses, and the children’s art and fitness credits.

Feel free to Tweet or email me with some of those tax tips not otherwise mentioned that you found helpful to know about, and I will comment on them via Twitter or in a future blog.

As always, if you need to ask any questions, feel free to contact me at marco@mgfadvisory.ca or 604-789-3888