"Be sure to reduce your tax bite by taking advantage of every tax credit available to you starting with these common 2017 tax relief strategies. " Sergiu Hirtescu, Consultant, Investors Group
· Basic Federal personal tax credit – raised to $11,635.
· Spouse/equivalent to spouse and/or eligible dependent credit – for an eligible partner and/or dependent with a net income of less than $11,635.
· Canada Caregiver Credit – new for 2017, replaces the previous caregiver tax credit, infirm dependent tax credit, and family caregiver tax credit. Credit value is determined by the relationship to the dependent being claimed, their income, and eligibility for other tax credits.
· Disability credit – transfer unused portion to a supporting relative. Many other credits are enhanced for someone with a disability.
· Medical expenses credit – generate the largest credit by combining expenses on the return of a lower earning spouse and/or by choosing the most advantageous 12-month period for unclaimed expenses ending in the current taxation year. Personal health insurance plan premiums including those for travel insurance may also be eligible. Check the extensive list of eligible expenses at www.cra-arc.gc.ca.
· Charitable donation credit – maximize by combining donations on one tax return or carrying forward to utilize higher credit rate for contributions over $200. Claim previously unclaimed donations from any of the five preceding taxation years.
Boomers and older
· Age credit – for those over 65 with a net income below $84,597. Transfer unused portion to supporting spouse.
· Pension income credit – claim up to $2,000. Transfer unused portion to eligible spouse.
· Pension income splitting – may be advantageous to allocate up to half of your qualifying pension to a lower income spouse.
· Childcare – claim day-care/other childcare expenses that allow you or your spouse to work or take a training course. Typically must be claimed by lower-earning spouse.
· Adoption expenses – claim up to $15,670 for an adoption finalized in 2017. Credit can be split between adoptive parents.
· Claim eligible tuition fees and interest on student loans – the supporting parent, spouse or grandparent of a student may be able to claim all or a portion of the tuition amount when transferred to them up to a maximum of $5,000.
· Although the education and textbook credits were eliminated effective January 1, 2017, unused education and textbook amounts carried forward from years prior to 2017 may still be claimed.
· Company pension plan contribution – deductible within limits.
· Public transit credit – claim the costs of monthly passes/electronic payment cards, but only those for public transit services up to June 30, 2017.
· First-time home buyers’ credit – $5,000 claim for certain homebuyers who acquired a qualifying home.
Now that you’ve checked every box on your tax credit list, check with your professional advisor for other strategies that could further reduce your tax bite.
This article, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.
Sergiu Hertiscu may be contacted at [email protected] or 416-895-6561