This year, add UP your tax savings by using these tips.
Basics
• You are never too young or have too little income — always file a tax return, which can trigger eligible benefits and credits such as the GST/HST credit and Canada Child Tax Benefit, get back tax withheld at source, add to RRSP contribution room, or prove that a student has no income if applying for federal/provincial loans and bursaries.
• Basic personal tax credit – raised to $10,527.
• Spouse/equivalent to spouse and/or eligible dependent credit – for an eligible partner and/or dependent with a net income of less than $10,527.
• Caregiver credit – up to $4,282 for care of an infirm or elderly relative in your home.
• Disability credit – transfer unused portion to a supporting relative.
• 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.
• Charitable donation credit – maximize by combining donations on one tax return or carrying forward to achieve higher tax rate for contributions over $200. Claim previously unclaimed donations for a five-year period.
Boomers, etc.
• Age credit – for those over 65 with a net income below $76,541. 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 half of your qualifying pension to a lower-earning spouse.
Children
• Children's art tax credit – up to $500 per child against eligible fees for arts programs.
• Children's fitness credit – up to $500 per child against eligible fees for a physical activity program.
• Credit for children born in 1994 or later -- $2,131 per child.
• Childcare – claim babysitting/other childcare expenses that allow you or your spouse to work or take a training course. Must be claimed by lower-earning spouse.
• Adoption expenses – claim up to $11,128 for an adoption finalized in 2011. Credit can be split between adoptive parents.
Students
• Claim eligible tuition fees, education and textbook costs, and interest on student loans – the supporting parent or grandparent of a student may be able to claim all or a portion of the tuition, education and textbook amounts when transferred to you to a maximum of $5,000.
Other tax-trimmers
• Company pension plan contribution for 2011 – deductible within limits.
• Public transit credit – claim the costs of monthly passes/electronic payment cards.
File by the deadline to avoid penalties and make sure your calculations are correct so you don't inadvertently overpay. Be sure your expense claims are valid and don't overlook newer credits like the Child Arts, Home Renovation and First Time Home Buyers' credits.
A professional adviser can help you get the max in tax savings.
J. Kevin Dobbelsteyn is a certified financial planner with Investors Group Financial Services Inc. His column appears every Wednesday.