Divorce and separation is a very difficult and crucial time in one’s life. Significant life changes, tough decisions and a mix of emotions is experienced during this time. Dealing with taxes could be added stress during such hard times. To ensure financial stability and to make informed wise decisions, it is essential to understand how taxes come into play during divorce and separation. This comprehensive guide will break down everything you need to know about handling taxes during such times.

1. Asset Division, Tax Implications, and Consideration of Tax Credits and Deductions:

Dividing property during a divorce or separation is an important part of reaching an agreement. However, it is important to understand the tax implications of transferring assets between spouses and how changes in marital status affect eligibility for tax credits and deductions.

• Transfer of Fair Market Value: When property, investments or businesses are transferred between spouses as a share of Divorce Agreement, the fair market value of the event is considered. This means that the assets are valued at their market value at the time of transfer. For example, if a family home is given to one spouse, its fair market value must be determined to assess the potential tax implications.
• Capital Taxes: Disposal of property at fair market value can result in a capital gain or loss for the other spouse. or both spouses. Capital gains tax is applied when the property is sold or transferred at a price higher than the adjusted acquisition cost. In case of divorce or separation, capital gains tax may apply if the fair market value of the transfer exceeds its original purchase price.
• Tax planning strategies: It is important to participate in tax planning strategies in order to minimize tax liabilities related to the distribution of assets. This may mean structuring the transfer of assets in a tax-efficient manner or taking advantage of available exemptions and deductions. Consulting an accountant near them can help people navigate these complex issues and optimize their financial outcomes.
• Changes to tax credits and deductions: Changes may affect various tax credits and deductions, such as dependent or child care expenses. in marital status or guardianship agreements. For example, individuals may be eligible for the Canada Child Benefit (CCB), eligible dependent credit, or child care expense credit based on their guardianship arrangements and financial obligations. It is important to review and update your tax returns so that these changes are accurately reflected and tax credits may be claimed.

Understanding the tax implications of property division, alimony payments and marital status changes is important to achieving financial stability during divorce or separation. . separation By considering factors such as fair value transfer, capital gains tax and changes in tax credits and deductions, individuals can optimize their financial performance and minimize their tax liability. Seeking professional guidance and accessing emotional support resources will ensure that people can navigate this difficult time with confidence and resilience. Remember you are not alone and help is available every step of the way.

2. The Impact of Support Payments

The payment of financial support, including spousal and child support, is an integral part of many divorce agreements. However, the tax treatment of these payments may differ depending on who pays and receives them.

• Spousal payments are usually taxable income for the payer and taxable income for the recipient. It is important to keep accurate records and report these payments correctly to the Canada Revenue Agency (CRA).
• Remittance payments, on the other hand, are not tax deductible for the payer and are not considered taxable income for the recipient. This difference is very important to understand when negotiating grants.

3. Tax Credits and Deductions

Changes in marital status and custody can affect various tax credits and deductions. Understanding how these changes affect tax benefits is critical to maximizing financial support during and after divorce or separation. Here's a closer look at the main aspects.

• Canada Child Benefit (CCB): CCB is a tax-free monthly payment to eligible families to help cover the costs of raising children. The amount of compensation is based on, among other things, income, number of children and parental rights. After a divorce or separation, changes to the custody can affect each parent's CCB amount. Information must be updated with the CRA to ensure compensation is assessed and paid.
• Other tax credits and deductions: Changes in marital status or custody. For example, individuals may qualify for the dependent credit or child care deduction based on their care arrangements and financial responsibilities. It is important to check and update your tax returns to accurately reflect these changes and claim tax credits.

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4. Seeking Professional Guidance

Tax complexities during divorce and separation can be overwhelming. Seeking advice from tax professionals and legal advisors can provide invaluable support and ensure compliance with tax laws and regulations.

• Tax professionals: Can help individuals understand their tax obligations, optimize support arrangements and minimize tax liabilities.
• Specialized tax legal advisors: Family law can provide guidance on the tax consequences of divorce settlements and ensure that financial agreements meet legal requirements.

5. Emotional Support and Community Resources

In addition to professional guidance, emotional support and community resources can play an important role in dealing with divorce and separation.

• Support groups and counseling services can provide a safe space for people to work through their feelings and connect with others. like their experiences.
• Community organizations and online forums can provide valuable resources and information about legal and financial issues related to divorce and separation.

Conclusion

Understanding the tax implications of property division, support payments, and marital status changes are essential to achieving financial stability during divorce or separation. By considering factors such as fair value transfer, capital gains tax and changes in tax credits and deductions, individuals can optimize their financial performance and minimize their tax liability. Seeking professional guidance and accessing emotional support resources will ensure that people can navigate this difficult time with confidence and resilience. Remember that you are not alone and help is available every step of the way.

If you need help completing and filing your return, meet with a tax professional at Filing Taxes. We take the time to listen and strategically analyze your complete financial picture to deliver tax planning that fits your life today and tomorrow. Our team will work with you to help you understand the solutions available to you and chart the best path forward.
To learn more feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step toward proper management of your finances.

Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.

What is CRA Voluntary Disclosure?

The Canada Revenue Agency (CRA) Voluntary Disclosures Program (VDP) is a legal avenue that allows Canadian taxpayers to rectify previous errors or omissions in their tax filings. It presents an opportunity for individuals and businesses to come forward and voluntarily correct their tax affairs before the CRA initiates any action or audit regarding the misinformation or incomplete information. This proactive approach to compliance may result in relief from penalties or prosecution that would typically accompany later detection by the tax authority.

When Voluntary Disclosure Is it Useful??

If you have made errors on prior year tax returns or if you have not filed when you should have, you may be worried about how to handle this situation. While it is not a crime to owe taxes, Canadians are legally required to file their tax returns on time and to provide accurate information. If you fail to do so, you could face serious financial and legal consequences. You could even potentially face tax evasion charges. The Canada Revenue Agency (CRA) takes these situations very seriously.

However, the CRA Voluntary Disclosure program is designed to favor honesty and integrity within the Canadian tax system, potentially offering different levels of relief depending on the nature of the disclosure and the taxpayer’s history. The CRA assesses several factors to determine the extent of relief, which may include waiving penalties and interest, on a case-by-case basis. Engaging in the VDP reflects taxpayers’ willingness to adhere to tax laws and can result in a clearer financial standing with the CRA moving forward.

What aspects are to be included in a Voluntary Disclosure?

• It must be, as the name suggests, voluntary. This means that you must initiate the process before you become aware of any compliance action that the CRA may be taking against you. If the CRA has already contacted you regarding your prior returns, you are unable to apply for voluntary disclosure.
• The information provided must be at least one year past due for income tax applications and, for GST/HST applications, at least one reporting period past due. If your return is less than a year overdue, you can simply file it as normal, though you may have to pay a penalty for missing the deadline.
• The information provided must be complete. This means you must correct all errors and provide all information that is missing. You cannot submit a partial correction.
• There must be a penalty involved, meaning that the information provided will result in taxes or penalties likely being assessed. The voluntary disclosure program cannot be used to get yourself a refund.
• You must include payment of the estimated tax owed when you file.

If your disclosure satisfies these terms and is deemed appropriate by the CRA, you will still have to pay the taxes owing plus interest in part or in full. However, you will not be referred for criminal prosecution, and, in some cases, you could receive relief from penalties. However, how the CRA will treat your case will depend on the particular circumstances of the disclosure filing.

Working with an experienced professional accountant in Toronto is critical at this time to give you the best chance at having your disclosure application accepted

How CRA Voluntary Disclosure Works

It is split into two tracks to differentiate those who want to correct unintentional errors from those who attempt to intentionally avoid their tax obligations.

 the type of relief you could receive will greatly depend on the track into which your case is placed.

• The VDP General Program is designed for taxpayers who made unintentional errors and wish to correct them. If you are placed into this program, the CRA will provide partial interest relief for years preceding the three most recent years of returns, you will not be charged penalties associated with the issue that was corrected, and you will not be referred for criminal prosecution relating to the information you disclosed.
• The VDP Limited Program is in place for situations where the agency believes that there was an element of intentional conduct to avoid your tax obligations. In these situations, you will not be referred for prosecution and you will not be charged gross negligence penalties. However, you still may be charged other penalties associated with the situation and you will also be charged applicable interest.

Whether an application is processed under the General or Limited Program is determined on a case-by-case basis. Several factors will be taken into account, including but not limited to:

• the dollar amounts involved;
• the number of years of non-compliance; and
• the sophistication of the taxpayer/registrant.

When to Apply for the Voluntary Disclosure Program

As the CRA points out, there are several situations in which it might make sense to apply under the VDP. These include cases where:

• A return for a previous year was not filed and it is now late
• Ineligible expenses were claimed on a tax return
• Required Information returns (for example, Form T1135, Foreign Income Verification Statement) were not filed.
• Income from foreign sources that is taxable in Canada was not reported on a tax return that was already filed.

Who Can Apply for the Voluntary Disclosure Program

To qualify for relief, the CRA says that an application must:

• Be voluntary (i.e., taxpayers must submit their application before the CRA takes any enforcement action against them).
• Be complete (taxpayers must include all relevant information and documentation, and make sure to disclose all taxation years affected). If a taxpayer wants to declare income that goes back several years—2020 to 2024, for example—but they no longer have all the backup to confirm the amounts, they must estimate them as closely as possible.
• As mentioned, involves the application or potential application of a penalty.
• Include information that is at least one year past the filing due date. As Posner points out, this is one element that makes it different from a T1 adjustment. He also notes that the program can be applied to returns going back up to 10 years.
• Include payment of the estimated tax owed.

Limits and Exclusions

Certain exclusions apply, which means not all disclosures will be accepted:

• Disclosures will not be considered if they relate to bankruptcy returns or returns with no tax owing or an expected refund.
• Applications are based on decisions that have already been made by the CRA or the courts.
• Requests that relate only to the determination of a fair market value.
• Situations that involve advance pricing arrangements or roll-over provisions.

The Voluntary Disclosure Program (VDP) allows taxpayers to correct inaccuracies in their previous tax filings. It is critical to follow the proper procedures to ensure compliance and potentially obtain relief from penalties and interest.

1. Preparation and Documentation

Taxpayers must compile all necessary documents that pertain to the tax years in question. This preparation includes gathering relevant financial statements, receipts, and prior tax returns. All information must be complete, meaning every tax year and issue must be disclosed. The taxpayer must not have any omissions or incomplete facts related to the disclosures.

2. Submission Procedures

To initiate the VDP process, taxpayers should submit Form RC199, Voluntary Disclosures Program (VDP) Application, or an equivalent letter containing the same information as the form. The submission must be voluntary before the Canada Revenue Agency (CRA) starts any enforcement action like an audit or investigation regarding the taxpayer’s returns.

• Use Form RC199 for the application.
• Use Form T1135, Foreign Income Verification Statement
• Include all relevant information.
• Make the disclosure voluntarily before CRA action.

3. Assessment and Completion

After submission, the CRA will review the application to determine if it meets the criteria of the program. If accepted, the CRA will process the disclosure and assess any taxes owed. The taxpayer may be granted relief from prosecution and, in some cases, from penalties and interest.

• CRA reviews the disclosure.
• Determines acceptance based on VDP criteria.
• Assesses taxes and considers relief options.

After Disclosure: Compliance Measures

Following a successful voluntary disclosure with the Canada Revenue Agency (CRA), taxpayers must ensure they abide by certain post-disclosure compliance measures to maintain their good standing and avoid future penalties.

Payment Arrangements

After disclosing to the CRA, the taxpayer is typically required to settle the owed amounts. If the taxpayer cannot pay the full amount immediately, the CRA may offer a payment arrangement. This allows the taxpayer to make smaller, scheduled payments over time.

• Initial Payment: An upfront payment may be required to demonstrate commitment to the payment arrangement.
• Instalment Payments: The balance can often be paid through a series of installments, the terms of which must be adhered to strictly to avoid default.

Ongoing Tax Obligations

Post-disclosure, taxpayers must maintain ongoing compliance with tax laws. This involves:

• Accurate Reporting: Ensuring all future tax returns are accurate and filed on time.
• Record Keeping: Maintaining detailed financial records to support claims on tax returns.
• Deadlines: Meeting all CRA deadlines for submissions and payments to avoid further interest and penalties.

It is crucial that taxpayers engage with the CRA’s guidelines to remain in compliance after a voluntary disclosure.

Rejection of Application

An application may be rejected if it does not meet the CRA’s criteria for a valid voluntary disclosure. This includes ensuring that the application is complete, is submitted before the CRA is aware of the compliance issue, and contains information that is more than one year past due. The CRA’s decision to reject a voluntary disclosure can lead to taxpayers being liable for the full amount of taxes owing, plus interest and penalties.

Subsequent Audits and Investigations

Following a voluntary disclosure, taxpayers may still be subject to audits by the CRA for the years disclosed or other tax years. Such audits can uncover additional discrepancies that were not originally reported, potentially leading to further tax liabilities. Moreover, if the CRA suspects fraud or misrepresentation, a voluntary disclosure will not protect a taxpayer from criminal investigation or charges.

Seek Professional Advice

When considering the Canada Revenue Agency (CRA) Voluntary Disclosure Program (VDP), taxpayers are advised to seek professional advice. The complexities involved in tax disclosures require expertise to ensure the applications are complete and compliant.

Professionals can help taxpayers navigate the nuances of the VDP application, assess the completeness of disclosures, and advise on the implications of the disclosure. A well-selected professional accountant in Toronto significantly increases the chances of a successful VDP application.

You can trust our experienced team to work with you and the CRA to resolve your tax situation. Our years of experience and deep understanding of CRA processes make us the right choice if you are considering applying for the CRA Voluntary Disclosure Program as well as dealing with nearly any tax situation. So, here’s your opportunity to get all your questions and concerns answered. All consultations are completely confidential whether you finally choose us or not. Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step toward proper management of your finances.

Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.

Embarking on the journey of starting a business in Canada is a thrilling endeavor, but it requires careful planning, strategic guidance, and piloting through legal requirements. In this extensive guide, we will walk you through each step of the process, breaking down the intricacies into manageable jobs. Let's explore deeper into each aspect to ensure you have all the information you need to incorporate your company in Canada successfully.

Understanding Business Structures:

Before leaping into the incorporation process, it's important to understand the various business structures available in Canada. Each structure has its own set of pros and cons, so it's important to choose the one that best suits your business goals and expectations.

• Sole Proprietorship: Running a business solo provides complete control, but also entails personal liability for debts. For collaborations, partnerships are an option, sharing ownership and responsibilities. Clear agreements on roles and profit-sharing are essential.
• Corporation: Incorporating a company offers liability protection and potential tax advantages. It separates business from owners, safeguarding personal assets. Though complex and costly, the benefits often outweigh the drawbacks, especially for long-term growth.
• Limited Liability: Incorporating offers shareholders limited liability protection, shielding personal assets from business debts and legal obligations.
• Tax Benefits: Incorporating provides potential tax advantages, including lower rates and flexibility in managing income and expenses.
• Credibility Boost: Operating as a corporation enhances business credibility, attracting investors and fostering valuable partnerships.
• Perpetual Existence: Corporations have perpetual existence, enabling continued operations despite ownership or management changes, providing stability and reassurance.

Step-by-Step Guide to Incorporation:

Now that you grasp the benefits of incorporating your company, let's walk through the process step by step:

1. Choose a Name: Selecting the right name for your company is a significant initial step in the incorporation process. It not only defines your identity but also aids in attracting clients and building memorability. Ensure the name is unique, memorable, and aligns with your brand's identity and values. Verify its availability and consider registering it as a trademark for protection.

2.Choose Your Jurisdiction: In Canada, businesses can opt to incorporate at either the federal or provincial level. Each option offers its own advantages and considerations, so weigh your options carefully before deciding.

3.Federal Incorporation: Allows nationwide operation and provides higher name protection but may involve additional costs and administrative requirements compared to provincial incorporation.

4.Provincial Incorporation: Limits business operations to a specific region but may be more cost-effective and straightforward, especially for local-focused businesses.

Consider factors such as target market, industry regulations, and future expansion plans when choosing the jurisdiction.

5.Draft Your Articles: The articles of incorporation are a legal document outlining vital details of your company, including its name, registered office address, share structure, and director information. It serves as the foundation of your corporation and provides essential information to shareholders, regulators, and other stakeholders. Ensure it complies with jurisdictional requirements and consider seeking legal advice for accuracy and legality.

6.File Your Articles: Once drafted, file the articles with the appropriate government authority ( Federal or Provincial) along with the required fees. The process varies depending on federal or provincial incorporation, so follow the instructions provided by the relevant authority.

Federal Incorporation: File articles with Corporations Canada, part of Innovation, Science, and Economic Development Canada (ISED).

Provincial Incorporation: File articles with the corporate registry or similar authority in the province or territory of incorporation.

Ensure compliance with additional documentation and information requirements to avoid delays or complications.

7.Obtain Permits and Licenses: Depending on your business nature and location, you may need permits or registrations from various government agencies. These are necessary to ensure compliance with relevant regulations and laws. Common permits and licenses include:

Business License: Allows operation within a specific jurisdiction.

Building Permit: Ensures compliance with local building regulations.

Health and Safety Permits: Necessary for businesses in certain industries like food service or healthcare.

Professional Licenses: Required for regulated professions such as medicine or law.

Environmental Permits: Necessary for businesses impacting the environment.

Research requirements and obtain all necessary permits before commencing operations to avoid penalties or business closure.

8.Register for Taxes: Register for various taxes at federal, provincial, and municipal levels based on your business activities and location. Common taxes include:

Goods and Services Tax (GST)/Harmonized Sales Tax (HST): Federal tax on goods and services sold in Canada. Businesses meeting revenue thresholds must register and collect GST/HST.

Provincial Sales Tax (PST): Levied by some provinces on the sale or lease of goods and services. Businesses operating in PST jurisdictions may need to register and collect PST.

Payroll Taxes: Deductions from employees' wages for programs like Employment Insurance (EI) and Canada Pension Plan (CPP). Employers must register and remit payroll taxes on behalf of their employees.

Corporate Income Tax: Tax on profits earned by corporations. All corporations operating in Canada must register and file corporate income tax returns annually.

To register for taxes, obtain a Business Number (BN) from the Canada Revenue Agency (CRA) and complete the appropriate registration forms. Understand your tax obligations and deadlines to avoid penalties.

9.Create Your Bylaws: Corporate bylaws are internal rules governing the operation and management of your company. They cover various topics, including:

Shareholder Meetings: Procedures for calling, conducting, and documenting shareholder meetings, including required quorum.

Director Duties: Responsibilities and powers of the board of directors, including appointment and removal of directors, and delegation of authority to officers and committees.

Shareholder Rights: Rights and entitlements of shareholders, including voting rights, dividend entitlements, and transferability of shares.

Decision-Making Processes: Procedures for pursuing significant decisions, such as amending the articles of incorporation, issuing shares, and entering into contracts.

When creating bylaws, consider the unique needs and circumstances of your business and ensure compliance with relevant laws and regulations. Bylaws should be clear, concise, and consistent with the articles of incorporation and other governing documents.

10.Issue Shares: As a corporation, you must issue and provide shares to your shareholders to outline ownership in the company. Shares represent units of ownership and entitle the shareholder to certain rights and privileges, such as voting rights and dividends. When issuing shares, consider factors such as the number of shares authorized in the articles of incorporation, the class and rights attached to each share, and the valuation of the shares. Shares may be issued for cash, property, or services, subject to compliance with applicable securities regulations. Maintain accurate records of share ownership and transactions, including issuance, transfer, and redemption of shares, documented in the corporation's share register kept at the registered office or another designated location.

11.Maintain Records: As a corporation, you are required to maintain accurate and up-to-date records of corporate documents, including the articles of incorporation, bylaws, meeting minutes, and share certificates. These records serve as a legal and historical record of the company's activities and decisions and may be requested by shareholders, regulators, or other stakeholders. Common types of records corporations are required to maintain include:

• Corporate Filings: Copies of all documents filed with government authorities, including articles of incorporation, annual returns, and changes to corporate information.
• Meeting Minutes: Records of proceedings and decisions made at shareholder meetings, board of directors meetings, and committee meetings.
• Share Register: A register of all shares issued by the corporation, including details of shareholders, number and class of shares held, and any share transactions or transfers.
• Financial Records: Accounting records, financial statements, and other financial records providing a record of the company's financial position and performance.

Maintaining accurate and organized records is essential for ensuring compliance with legal and regulatory requirements, operating with transparency and accountability, and providing evidence in case of disputes or litigation.

12.Open a Bank Account: Finally, it's time to establish a dedicated business bank account to manage your company's finances. A business bank account allows you to separate your personal and business finances, making it easier to track income and expenses, manage cash flow, and comply with tax and regulatory requirements.

Once your business bank account is open, ensure to use it exclusively for business purposes and maintain accurate records of all transactions. This will help streamline accounting and tax reporting, preserve the integrity of your corporate structure, and ensure compliance with legal and regulatory requirements.

Conclusion:

Incorporating a company in Canada is a significant milestone for any entrepreneur, marking the beginning of an exciting journey towards building and expanding a successful business. By following the steps outlined in this guide and seeking professional guidance when needed, such as from an accountant or financial advisor, you can navigate the complexities of the incorporation process with confidence and clarity. From choosing the right business structure to drafting your articles of incorporation, obtaining permits and licenses, and opening a business bank account, each step plays a crucial role in laying the groundwork for your company's future success.

Through effective financial management and the time and effort to properly incorporate your business, you can enjoy the benefits of limited liability protection, tax advantages, and enhanced credibility, paving the way for long-term growth and prosperity. If you have any questions or need assistance, be sure to reach out to qualified accountants near you, or financial experts who can provide guidance tailored specifically to your needs and circumstances. With the right knowledge, resources, and support system, you can confidently navigate the incorporation process and embark on the exciting journey of entrepreneurship in Canada.

If you need help incorporating your company in Canada or completing and filing your return, meet with a tax professional at Filing Taxes. We take the time to listen and strategically analyze your complete financial picture to deliver tax planning that fits your life today and tomorrow. Our team will work with you to help you understand the solutions available to you and chart the best path forward.
To learn more feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step toward proper management of your finances.
Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.

Every year in Canada, millions of dollars in tax deductions and credits go unclaimed. With literally hundreds of tax credits and tax deductions available to eligible Canadian taxpayers, it can be easy to overlook some. In this article, we will discuss some overlooked tax deductions and credits that can save you quite a bit on your tax return.

1. Moving Expenses

If you’ve relocated for work, you may be eligible to claim a wide range of moving expenses for you and your family. Some conditions apply but, generally, if you move to a home that’s at least 40 km closer to your new place of employment, you can claim associated moving costs. Commonly overlooked moving expenses are:

• Travel expenses for your family including vehicle expenses, accommodations, and meals.
• Fees for changing your address on documents or identification such as your driver’s license, vehicle registration, or other legal documents.
• The cost of utility hookups and disconnections.
• The expense of title transfer for your new home.

If you move late in the year, a portion of your moving expenses may have to wait to be claimed. Moving expense claims are limited to the income you earn at the new job that year. If you move in December, there’s not much time to up your limit. Don’t worry. Any unused moving expenses can be claimed the following year.

Eligible expenses include vehicle expenses (fuel), meals, accommodation (hotel), as well as costs related to selling your old home and/or buying a new one.

2. Carryforwards

Carry-forward amounts are tax deductions and credits that you can set aside for future use. For example, if you managed to bring your tax payable down to zero with only a portion of your deductions and credits available, the remainder can be “banked” (carried forward) for use in a future year.

Typical examples of carryforwards are unused RRSP contributions, tuition fees, donations, and losses (capital and business).

Most of these carry-forward amounts can be found on your Notice of Assessment or by visiting your My Account portal on the CRA’s website.

For the most part, the CRA will not apply these carry-forward amounts automatically; it is up to you to use them when needed. Therefore, it is important to keep track of these amounts to make the most of them.

3. Carry backs

Sometimes, you can change the past! For any deduction or credit that you omitted in a previous tax return, you can go back up to 10 years and adjust that return.

Moreover, some of the amounts in your current year's return can be claimed retroactively. For example, if you incurred a capital loss during the year, you can carry back this capital loss to one or all of your three prior years’ tax returns and use it against capital gains earned in any of those years. To do so, you must file a T1A form with your tax return.

4. Medical expenses

Medical expenses can add up quickly in the run of a year. Everything from routine dental visits to prescriptions to doctors’ fees could earn you a credit at tax time.  It’s not that Canadians miss claiming medical expenses altogether, but there are many missed expenses, and some are more often missed than others.

• To get the most out of your claim, it’s usually best to have one spouse claim all the medical expenses for the immediate family (you, your spouse, and kids under 18).

• If you support a dependant, such as an elderly parent, don’t forget to claim those expenses too. These medical expenses are not claimed by you, your spouses, and minor kids. The medical expense credit for other dependants is claimed separately.

• If you’ve had to travel more than 40 km one way to seek medical care, you may be able to claim medical travel expenses for the trip. For longer trips (over 80 km) meals and accommodations may also be claimed.

• renovation or construction expenses - the amounts paid for changes that give a person access to (or greater mobility within) their home because they have a severe and prolonged mobility impairment or lack normal physical development.

• medical services provided by qualified practitioners - service fees paid to authorized medical practitioners.

• Don’t forget about any private insurance premiums you pay throughout the year. Those costs may be eligible medical expenses too.

You can see, many types of expenses are eligible for the medical expense tax credit, and it pays to know what they are.

5. Disability

If you have a medical condition that seriously impedes your day-to-day functions, you could be eligible for the disability tax credit. Your condition would have to be certified by a medical practitioner and confirmed by the CRA.

The practitioner will indicate how long you have had this condition. If it has been several years, you can go back and adjust previous tax returns to claim this credit retroactively.

The disability amount is one of the most valuable Canadian tax credits, worth about $1,500 for an adult and even more for a child. Even if you can’t take advantage of the entire credit — e.g. because your income isn’t high enough — the unused part of this credit can be transferred to a wide range of people.

Those who need life-sustaining therapy, those with a marked restriction in any one of the following categories, or significant limitations in two or more of the categories might be eligible for the credit:

• Walking
• Mental functions
• Dressing
• Feeding
• Eliminating (bowel or bladder functions)
• Speaking
• Hearing
• Vision

6. Union/Professional Dues and Licensing Examination Fees

Most union dues are deducted directly from your paycheck and appear on your T4 (box 44). If you’ve paid any other amounts to a union or professional organization, be sure to keep the receipts for tax time. If you pay insurance premiums related to your profession, keep track of the cost. Doctors, for example, can claim the cost of malpractice insurance.

If you’re required to pass a certification or licensing exam for your profession, that cost may qualify as a tuition expense. Nurses, for example, may claim the cost of yearly licensing fees on Schedule 11 as a tuition amount. If you are reimbursed by your employer for these fees, they are not eligible expenses.

7. Carrying charges

One of the most often overlooked deductions is your “carrying charges,” which can reduce your taxable income. It’s not surprising that these are often missed since the name “carrying charge” isn’t exactly crystal clear. Even if you don’t have very complicated investments, you may have to carry charges that include:

• Some of your investment advisor’s fees on non-registered investment accounts (but not their commissions)
• Fees for some investment advice
• The cost to have someone prepare your tax return but only if you have income from a property or business (if you have just a T4 and a few donations, unfortunately, you can't claim the expense of your tax preparation software)
• The interest you paid on money you borrowed to try and earn investment income

8. Student Loan Interest

Interest paid on a student loan is an often-overlooked credit. This non-refundable credit applies to interest paid on eligible loans – not all types of loans qualify. For example, if you opened a student line of credit to fund your studies, that interest isn’t deductible. Student loan interest can be carried forward for up to five years. If you don’t need the deduction this year, consider carrying it forward.

9. Childcare Expenses

If you pay for childcare so you can work, attend school, or run your business, you already know that these expenses are tax-deductible. But did you know that other expenses also qualify? Along with the usual fees from daycares or in-home providers, most overnight camps and summer day camps are also eligible for the deduction.

10. Employment Expenses

From home office costs to tradesperson’s tools, if you incur certain expenses related to your job, you may qualify for a deduction at tax time. Be sure to obtain a signed form T2200 (Declaration of Conditions of Employment). This form, which is completed by your employer, outlines exactly what types of expenses you can claim as well as any reimbursements you’ve received.

We Can Help Minimize Your Tax Bill and Maximize Your Refund.

Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step toward proper management of your finances and ensure you comply with CRA reporting and payroll deductions.

Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.