As many of us are putting together the necessary documentation for the 2013 tax season, now is a perfect time to have a look at some of the most relevant tax credits can that can be claimed. These credits can be beneficial to both you and your family, so it is important to understand how each one works and which credits may be applicable to you.
Public Transit Credit
If you live in a major metropolitan area, you may very well have purchased travel passes for a subway, bus or train. You can claim this back by referring the Public Transit Amount on any Canada Revenue Agency tax return. Still, remember that you will have needed to apply for a transit pass that had given you unlimited journeys to claim this credit. You can find out further information in regards to this credit by directly visiting the CRA online portal.
Tax Credit for First-Time Home Buyers
Did you purchase a home during the 2013 tax year? If you, you may be eligible for up to $5,000 Canadian dollars in tax credit. There are some criteria that should be met, however. First, the home that was purchased would have to have qualified for this credit (you may wish to check with the CRA for this stipulation) and the house will need to be the first home that you have resided in during the past five years. For example, if you have bought your first home after having lived in an apartment for the past decade, this type of credit is worth having a look into. This is also simply abbreviated as HBTC.
You may be able to claim up to five hundred dollars with this tax credit opportunity. Perhaps your daughter of fifteen years went to regular dance classes or you had enrolled your sun into a sports programme. If your child was under sixteen (eighteen if he or she had a disability), you could be eligible for this credit. In fact, children with disabilities can be able to receive an even greater amount. Once again, consult the CRA website for more details.
If makes sense to mention this opportunity alongside the children’s fitness category. As with the Children’s Fitness, the child must be under sixteen years of age (or eighteen for a disabled child). The CRA defines this type of credit as a “prescribed program of artistic, cultural, recreational or developmental activity).
Any Medical Expenses?
You have the ability to claim a variety of medical costs for yourself, your partner, a common-law partner and any children that are dependent (17 years of age or younger). Some of the most common costs that you can claim will include (but are not necessarily limited to) psychologists, assisted care, prescription drugs, dental treatments, physiotherapy and any at-home care that has been given by a professional. Also, it is important to note that these expenses can be claimed if they are found to have exceeded 3% of your income or they total more than $2,152 dollars. The best way to determine this credit will be to pool all expenses together and thereafter, to file them on an individual tax return. A good tip is to file these costs on the return of whichever person earns the lowest income. If the expenses do not equate to the aforementioned amounts, it is best to hold off filing. Keep all of the receipts and you will be able to subsequently file at the end of the 2014 tax year.
First and foremost, you should realize that if you have been making donations for several years, you will be unable to apply for this type of credit. Still, you can enjoy other benefits from these actions. This is due to the fact that in Ontario, the credit that any individual will receive when donating over $200 dollars is exactly 40.16%. As with the medical expenses, all donations should be grouped together and filed at once if you and your spouse have both contributed (it is not important whose name will appear on the donation receipts). It is best to claim this credit on the return of the person that is paying the highest tax rate. Also, keep in mind that the maximum amount for this limit is 75% of total income. Again, you can always “roll over” these donations to the 2014 tax year if you are unable to claim for the 2013 return. Make certain that the charities that you have donated to are certified by the CRA. You can also take a look on the CRA website to learn more about how to file and which situations will qualify for tax credits.
Above all, remember to keep your documentation updated and available. This will make the entire process of claiming tax credits easy and streamlined. You can always refer to the website of the Canada Revenue Agency or speak with us for more details at www.capitaltaxltd.com