How Can I Save on My Taxes?

Contents

Claim your deductions

People with higher incomes pay more in income tax. There are expenses you can deduct to reduce your income tax. When you claim a deduction, your taxable income is less.

Here are some examples of when you can claim a deduction on your income tax:

  • I support my spouse .
  • I support a family member who has a disability .
  • I am a single parent .
  • The other parent and I both work full-time and we have childcare expenses.
  • I am a full-time student.
  • I give money to a charity.
  • I am a senior.
  • I have a disability .
  • I run a business out of my home.
  • I had to move to be closer to my job.
  • I have medical expenses not covered by my medical insurance.

To make sure you claim all your deductions, ask for help. Call your community centre, accountant, bookkeeper or tax preparer and see if anyone can help with an income tax return.

Can I get some payments and credits from the government?

Even if you have no income to report or tax to pay, you may be able to get some payments or credits from the government.

There are different kinds of payments and credits. The main ones are:

  • Canada Child Tax Benefit (CCTB) payments,
  • the Universal Child Care Benefit, and
  • tax credits from the provincial government.

To get any of these payments or credits, you must file an income tax return.

Canada Child Tax Benefit (CCTB)

Copyright www.shutterstock.com

The Canada Child Tax Benefit (CCTB) is a tax-free monthly payment for families who need help with the cost of raising children under age 18.

The amount you get depends on how much you make and how many children you have.

You should apply for the CCTB as soon as possible after your child is born or after you become a resident of Canada.

Even if you feel you will not get the CCTB because your income is too high, you should still apply. The government makes the payment based on your income for the previous year.

You will have to provide proof Evidence which establishes or tends to establish the truth of a fact; also, the conclusion of a logical argument. See "evidence" and "premises." of birth with your application if benefits have not been paid for this child before and:

  • your child was born outside of Canada, or
  • your child was born in Canada but is more than a year old.

You apply for the CCTB by completing the form, Canada Child Benefits Application. For details, go the Canada Revenue Agency website.

You may have to fill out an additional form if:

  • you and/or your spouse Under the ''Divorce Act'', either of two people who are married to one another, whether of the same or opposite genders. Under the ''Family Law Act'', married spouses, unmarried parties who have lived together in a marriage-like relationship for at least two years, and, for all purposes of the act other than the division of property or debt, unmarried parties who have lived together for less than two years but have had a child together. See "marriage" and "marriage-like relationship." are not Canadian citizens,
  • you and/or your spouse have become new Canadian citizens within the last 12 months,
  • you and/or your spouse have become residents of Canada within the last two years, or
  • you and/or your spouse have moved back to Canada and re-established residential ties.

BC Family Bonus is a payment from the provincial government to help you with the cost of raising children if your income is low. The BC Family Bonus comes with the Canada Child Tax Benefit. You do not have to apply

for it. The government decides if you qualify for it based on your income tax return.

Universal Child Care Benefit

The Universal Child Care Benefit is a payment for each child under the age of 6 years. This benefit is $100 per month per child. The government pays this benefit to all parents in Canada. You report it as income on your income tax return. You should apply for this benefit as soon as possible after your child is born or after you become a resident of Canada. You apply for this benefit by completing the form, Canada Child Benefits Application. For details, go the Canada Revenue Agency website.

Low Income Climate Action Tax Credit

If your income is low, you may be eligible to receive the BC Low Income Climate Action Tax Credit. This is a payment to help you with the carbon tax you pay.

How much you receive depends on the size of your family and your net family income. For 2013, individuals with a net income The remainder of a person’s annual income after the mandatory deductions have been paid, which may include CPP, EI, income taxes and union or professional dues. For self-employed persons, necessary and reasonable business and operating expenses may also be deducted to determine net income. under $32,219 and families with a net income under $37,589 were eligible for a payment. The maximum annual payment was $115.50 for an individual and additional amounts for spouses and children.

Are there ways to reduce taxable income?

This section describes ways in which people put away money for their future. Get some advice from a financial advisor to see what choices would be best for you.

Registered Retirement Savings Plan (RRSP)

A Registered Retirement Savings Plan or RRSP allows you to delay some of your taxes. You can open a RRSP at a bank, credit union or investment company. You can contribute to your RRSP at any time during the year. You claim the amount of your RRSP contribution as a deduction on your income tax return.

The amount you can contribute is shown on the Notice of Assessment you get from the government each year after you file your taxes. By the end of February of each year, your bank, credit union, or investment company will provide you with a receipt for your RRSP contributions in the previous year. You claim the amount as a deduction on your income tax return.

You do not have to claim your whole RRSP contribution each year on your taxes. You can defer some or all of your contributions. This can be helpful if you do not have enough income in that year to make the best use of the tax deduction.

You do not have to put the full amount in each year. If you do not pay the full amount, you will have unused contribution room for the future. This means you will be able to put more money into your RRSP later on.

If you are working part-time now, you may put less than your limit into your RRSP this year. Next year, if you work full time and have a higher income, you could put in more money.

Registered Education Savings Plan (RESP)

A Registered Education Savings Plan (RESP) is a special savings account that helps you save for post-secondary education. You can open a RESP at a bank, credit union or investment company. The government does not tax this money while it is in your RESP. It can grow tax free. When the money pays for education, the money is taxed in the student’s name. Since many students have little or no other income, they can usually withdraw the money tax free.

Tax-Free Savings Account (TFSA)

  • Any money you make in this account is tax free.
  • Any money you withdraw from this account is tax free.

Source: wiki.clicklaw.bc.ca

Category: Taxes

Similar articles: