Alan Baggett
2014-02-11 12:12:22 UTC
Don't Forget to Take Credit for Your Tax Credits! :CRA SOTW
Most taxpayers leaving money on the table
By Bruce Johnstone, Canwest News Service
REGINA -- Nearly three out of four Canadians are leaving money on the table when they fill out their annual income tax returns, according to H&R Block Canada.
Cleo Hamel, a senior tax analyst with the country's leading tax preparation firm in Calgary, said most Canadians can claim at least one tax credit, but only one out of four actually did on their 2007 tax forms.
"According to a survey we had conducted (in December), three-quarters of the population either didn't take advantage or weren't aware they could take advantage (of new tax credits on the 2007 tax return)," Hamel said in a recent interview.
"How can you leave that kind of money on the table?" Hamel said, adding the survey results were "quite shocking.''
After all, Hamel said the Canada Revenue Agency (CRA) isn't exactly hiding the information on tax credits from taxpayers. "The CRA has put a lot of effort into advertising these credits -- television ads, ads in the paper -- it's amazing."
For whatever reason, Prairie residents were more likely to claim the new tax credits (42 per cent), versus Quebec residents, who were least likely to claim them (18 per cent).
The most popular tax credit was the child tax credit, which was claimed by 18 per cent of survey respondents, followed by the pension income splitting tax credit (16 per cent) and transit pass credit (15 per cent).
The children's fitness credit (14 per cent) and the working income tax credit (11 per cent) were also mentioned by respondents.
New this year are the first-time home buyers credit of $750, the $5,000 increase in allowable withdrawal from RRSPs to $25,000 for home purchases, and the home renovation tax credit of $1,350.
Hamel said the home renovation tax credit can be used for just about any type of repair or renovation job, including painting, building a fence or deck, to replacing a furnace.
"The technical definition (of renovation) is anything that adds value to your home,'' Hamel said. And while $1,350 probably won't cover all or most of the cost of a typical renovation job, every little bit helps.
And do-it-yourselfers can also claim the credit, as long as they show receipts for the materials and supplies used in the project, she added. "It doesn't have to be something that a contractor does. Whatever it costs you in terms of materials, supplies, permits, keep your receipts."
While the uptake on the renovation tax credit should be fairly high, Hamel said taxfilers frequently forget to claim expenses that are less obvious, like health care premiums.
"If you're currently paying a health or dental (plan) premium through payroll deduction, that is included as a medical expense. A lot of people forget about it because it's included on the T-4 (statement of income and deductions),'' she said. "That adds up to a lot of money."
Similarly, receipts for donations to charities can be accumulated over a few years and submitted for an even bigger deduction, she said.
"Unfortunately, (some) people are unable to donate a lot of money. Maybe they can donate $50 or $60 a year. Know how to maximize it? Just save (the receipts) and you can get more money back. You get a 15-per-cent credit on the first $200 and you get 29 per cent for every dollar over $200 that you donate."
As with medical and dental expenses, donations made by other family members can be deducted by one taxfiler to maximize the tax savings, she said.
The Canada employment tax credit is another tax break that has little awareness among taxpayers, H&R Block says.
Only seven per cent of respondents reported claiming the $1,000, non-refundable tax credit. That's like throwing away money, Hamel says.
"If you have a T-4 for employment income, you qualify to get the credit. It translates into $150 in federal tax savings. How many coffees can you buy in a year for $150?"
The transit pass credit is another frequently unclaimed tax break, with only a few rules to follow. "It's got to be a monthly pass or four consecutive weekly passes. Keep those passes and the receipts, and keep them for the whole family."
Even if your child has a subsidized bus pass, the remaining amount can be claimed under the transit tax credit, she added.
The child tax credit, which provides $300 per child under the age of 18, is the most popular tax credit. But the children's fitness credit may get overlooked. "If the kids are in hockey, soccer, or dance, you can claim up to $500."
While each tax credit may not seem like much, taken together they can add up to significant savings.
"If you take each these (tax credits) on their own, it might not be a lot. But when you consider the fact that most families can probably take advantage of a couple of them, it could become significant."
Regina Leader-Post
(c) Copyright (c) The Regina Leader-Post
-----------------------------------------------------------
Miss a Tax Tale Miss a lot!
Visit the CRA SOTW Library at http://canada.revenue.agency.angelfire.com
------------------------------------------------------------
Alan Baggett - http://www.taxcollectorsbible.com/ - Tax Collector's Bible
Most taxpayers leaving money on the table
By Bruce Johnstone, Canwest News Service
REGINA -- Nearly three out of four Canadians are leaving money on the table when they fill out their annual income tax returns, according to H&R Block Canada.
Cleo Hamel, a senior tax analyst with the country's leading tax preparation firm in Calgary, said most Canadians can claim at least one tax credit, but only one out of four actually did on their 2007 tax forms.
"According to a survey we had conducted (in December), three-quarters of the population either didn't take advantage or weren't aware they could take advantage (of new tax credits on the 2007 tax return)," Hamel said in a recent interview.
"How can you leave that kind of money on the table?" Hamel said, adding the survey results were "quite shocking.''
After all, Hamel said the Canada Revenue Agency (CRA) isn't exactly hiding the information on tax credits from taxpayers. "The CRA has put a lot of effort into advertising these credits -- television ads, ads in the paper -- it's amazing."
For whatever reason, Prairie residents were more likely to claim the new tax credits (42 per cent), versus Quebec residents, who were least likely to claim them (18 per cent).
The most popular tax credit was the child tax credit, which was claimed by 18 per cent of survey respondents, followed by the pension income splitting tax credit (16 per cent) and transit pass credit (15 per cent).
The children's fitness credit (14 per cent) and the working income tax credit (11 per cent) were also mentioned by respondents.
New this year are the first-time home buyers credit of $750, the $5,000 increase in allowable withdrawal from RRSPs to $25,000 for home purchases, and the home renovation tax credit of $1,350.
Hamel said the home renovation tax credit can be used for just about any type of repair or renovation job, including painting, building a fence or deck, to replacing a furnace.
"The technical definition (of renovation) is anything that adds value to your home,'' Hamel said. And while $1,350 probably won't cover all or most of the cost of a typical renovation job, every little bit helps.
And do-it-yourselfers can also claim the credit, as long as they show receipts for the materials and supplies used in the project, she added. "It doesn't have to be something that a contractor does. Whatever it costs you in terms of materials, supplies, permits, keep your receipts."
While the uptake on the renovation tax credit should be fairly high, Hamel said taxfilers frequently forget to claim expenses that are less obvious, like health care premiums.
"If you're currently paying a health or dental (plan) premium through payroll deduction, that is included as a medical expense. A lot of people forget about it because it's included on the T-4 (statement of income and deductions),'' she said. "That adds up to a lot of money."
Similarly, receipts for donations to charities can be accumulated over a few years and submitted for an even bigger deduction, she said.
"Unfortunately, (some) people are unable to donate a lot of money. Maybe they can donate $50 or $60 a year. Know how to maximize it? Just save (the receipts) and you can get more money back. You get a 15-per-cent credit on the first $200 and you get 29 per cent for every dollar over $200 that you donate."
As with medical and dental expenses, donations made by other family members can be deducted by one taxfiler to maximize the tax savings, she said.
The Canada employment tax credit is another tax break that has little awareness among taxpayers, H&R Block says.
Only seven per cent of respondents reported claiming the $1,000, non-refundable tax credit. That's like throwing away money, Hamel says.
"If you have a T-4 for employment income, you qualify to get the credit. It translates into $150 in federal tax savings. How many coffees can you buy in a year for $150?"
The transit pass credit is another frequently unclaimed tax break, with only a few rules to follow. "It's got to be a monthly pass or four consecutive weekly passes. Keep those passes and the receipts, and keep them for the whole family."
Even if your child has a subsidized bus pass, the remaining amount can be claimed under the transit tax credit, she added.
The child tax credit, which provides $300 per child under the age of 18, is the most popular tax credit. But the children's fitness credit may get overlooked. "If the kids are in hockey, soccer, or dance, you can claim up to $500."
While each tax credit may not seem like much, taken together they can add up to significant savings.
"If you take each these (tax credits) on their own, it might not be a lot. But when you consider the fact that most families can probably take advantage of a couple of them, it could become significant."
Regina Leader-Post
(c) Copyright (c) The Regina Leader-Post
-----------------------------------------------------------
Miss a Tax Tale Miss a lot!
Visit the CRA SOTW Library at http://canada.revenue.agency.angelfire.com
------------------------------------------------------------
Alan Baggett - http://www.taxcollectorsbible.com/ - Tax Collector's Bible