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Most Often Missed Tax Deductions

When preparing personal tax returns over the years, there are certain common deductions that taxpayers too often miss out on:

(1)   Medical Expenses

A lot of people know about medical expenses but too often people underestimate the amount of expenses available to deduct.

Often, people are unaware that, if they travel more than 40km in order to obtain certain medical services, an amount can be claimed for both travel and meals. CRA does not require receipts in order to claim this deduction and allows a standard amount per km and per meal.

Sometimes people are under the impression that, since they have a medical insurance plan at work, that they don’t have enough medical expenses for a claim. The truth is, if they are paying in to a medical insurance plan through payroll deductions, those payments themselves qualify as a medical expense.

In addition, there is a lengthy list of qualifying medical expenses that may apply to your family tax situation.

The bottom line…discuss this deduction with your accountant. You may have a claim and not know it.

(2)   Moving Expenses

If you move 40 km or more closer to a new job, you are likely to qualify for a moving expense claim.

Even if you didn’t keep receipts, there are certain expenses like meals and travel that can be calculated based on a formula allowed by CRA.

The list of qualifying moving expenses is lengthy but well worth deducting if you qualify.

(3)   Childcare Expenses

Childcare expenses are deductible from income where both spouses or spouse, in the case of single parent families, are working or where one spouse is attending school for all or part of the tax year. Childcare expenses can include daycare fees, nursery school, boarding school, hockey school, or summer camp fees.

If both spouses are working, the lower-income earner must claim the deductions.

(4)   Disability Tax Credit

A Federal and Provincial tax credit is available for taxpayers with severe and prolonged mental or physical infirmity. To qualify, a Canadian medical doctor must certify to the impairment on Form T2201.

The impairment is considered severe if it restricts the person in their daily living activities. If such things as walking, speaking, feeding or dressing oneself, for example are affected for a continuous period of at least 12 months, then the infirmity satisfies the purposes of the tax credit.

If you think you or someone you know might have missed this credit, talk to your accountant. In many cases, the claim can be made retroactively and significant tax refunds recovered for past years.

(5)    Carrying Charges

These include a variety of expenses associated with financing charges and investment expenses, such as

  • Interest on loans for investment purposes.
  • Fees paid to financial plans and investment advisors.

If you think you have incurred such carrying charges, talk to your accountant.

(6)   Self-employment Expenses

If you are using your house as part of your business – a home office for example – you can claim a deduction for that part of the home that is used to conduct business activities. If you are a homeowner you can claim a portion of your mortgage interest, property taxes, repairs, utilities, insurance, etc. If you are a renter you can claim a portion of your monthly rent. For each of these expenses you can claim a percentage equal to the percentage of your home that is reserved for business.

Other often-missed business expenses include:

(a)   Tools and supplies (formerly personal) brought into your new business

(b)   The business portion of the cost of your vehicle

(c)   Business portion of telephone, cellular and internet fees

(d)   Certain travel, entertainment and meals directly related to your business

(e)   Reasonable salaries and wages paid to family members who work for you

Talk to your accountant!

The list of possible business expenses and other tax deductions is long and complex. Don’t listen to “coffee shop” talk. Consult a professional tax accountant. You deserve good advice when it comes to your tax return.

Business Plan Templates

If you are looking for business plan templates, the Business Development Bank of Canada has some excellent fillable ones.

https://www.bdc.ca/EN/advice_centre/tools/business_plan/Pages/default.aspx?ref=learnmore

List of CRA Registered Charities

http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html

Student Financing

http://www.canlearn.ca

http://www.scholarshipscanada.com

http://www.studentawards.com

Fund Companies: Prices and Distributions

http://www.fundlibrary.com

Find People & Businesses

http://www.superpages.ca

http://www.411.ca

Foreign Exchange and Currency Converter

http://www.oanda.com/currency/converter/

Canada Revenue Agency

http://www.cra-arc.gc.ca/menu-eng.html

CRA – Online Payroll Deductions Calculator

https://apps.cra-arc.gc.ca/ebci/rhpd/startLanguage.do?lang=English

Online Mortgage Amortization Calculator

https://www.rbcroyalbank.com/cgi-bin/mortgage/mpc/start.cgi

Provincial Budgets

http://www.gov.mb.ca/finance/provincialbudgets.html

GST Netfile

http://www.cra-arc.gc.ca/esrvc-srvce/tx/bsnss/gsthst-tpstch-ntfl/menu-eng.html

PST Netfile (TAXcess)

https://taxcess.gov.mb.ca/MB_xwTapMgr.aspx

Local and Regional Financial Institutions

http://www.accesscu.ca/

http://www.rbcroyalbank.com

https://www.cibc.com/ca

http://www.scotiabank.com

https://www.bdc.ca

http://www.fcc-fac.ca/en/index.asp

AgriStability

http://www.agr.gc.ca/eng/?id=1291990433266