Tax Credits and Deductions for families

The tax deadline is looming close (April 30). You only have nine days to get your taxes completed and submitted to the government. If you are like me, you might be doing your taxes on your own, with the help of a tax program like QuickTax. I use the EasyStep method of doing my taxes, which is like a mini interview with an accountant (I would assume, since I have never actually had an interview with an accountant).

Unfortunately, sometimes you can still miss things. Somehow, last year, I forgot to put my daughter down as a dependant. I included her in my 2007 tax return, but not for 2008. I am pretty sure I had put her in, but somehow the questions confused me and I removed her. Maybe I thought I could only claim the child tax credit if my husband and I were separated or divorced. Anyway, I only realized I had claimed I was childless for 2008 while doing my taxes for 2009. Fortunately, you can have your return adjusted for two previous years, so hopefully we will be able to recoup the money we didn't get back last year.

Here is a list of some credits and deductions you might be able to claim.


TAX CREDITS
(this amount is subtracted from your tax owing, and is usually a percentage)

Child tax credit (line 367): You can claim $2,089 for each child under the age of 18 who lives with you. This tax credit started in 2007.

Eligible dependant amount (line 305): This gives single parents who are supporting children a tax break equivalent to that enjoyed by taxpayers who support a spouse.

Child fitness tax credit (line 365): You can claim to a maximum of $500 per child under 16, the fees paid in 2009 that relate to the cost of registering your or your spouse's or common-law partner's child in a prescribed program of physical activity.

Medical expenses (line 330): You can claim medical expenses paid in any 12-month period ending in 2009 and not claimed for 2008. Your total expenses have to be more than either 3% of your net income (line 236) or $2,011, whichever is less.

Transit pass tax credit (line 364): You can claim the cost of monthly public transit passes or passes of longer duration such as an annual pass for travel within Canada on public transit during the year.

GST/HST credit: To receive this credit, including any related provincial credit, you have to apply for it, even if you received it last year. Your credit is based on the number of children you have and your net income added to the net income of your spouse or common-law partner.

Home renovation tax credit (line 368): This is only good for expenses incurred after January 27, 2009 and before February 1, 2010. You don't include your receipts, but you need to have them in case CRA asks to see them. There is a 15% tax credit for any home improvement expenditure above $1,000 and up to $10,000.

Tuition (T2202A): Students of any age can reduce their income taxes by claiming eligible education expenses. Parents can claim their children's expenses. Credits can also be carried forward to the next tax year.

TAX DEDUCTIONS:
(this amount is subtracted from your gross income)

Child care (line 214): You or your spouse or common-law partner may have paid for someone to look after your child so one of you could earn income, go to school, or conduct research in 2009. The deduction limit is $7,000 for children under 7 and $4,000 for children aged 7 to 16. If your child is eligible for the disability tax credit the limit is $10,000.

TAX BENEFITS:
(this amount is paid to you depending on your income)

Child disability benefit: This applies to families who care for a child under 18 with a severe and prolonged impairment in mental or physical functions.

Canada child tax benefit: This is a tax-free monthly payment for children under 18 and is calculated based on the number of children in your family, the province or territory of residence and the family's net income.

Universal child care benefit: Since 2006, this is a monthly $100 payment for each child under the age of 6, regardless of the family's income. This amount is taxable on the return of the lower income spouse.

Keep in mind, this is not a definitive list. Make sure you check your taxes thoroughly before submitting. You can adjust your past returns through your epass account. I am not an accountant, so don't use me as an excuse if you file incorrectly :).