Now that the RRSP deadline has passed, many Canadians will start preparing their individual income tax returns.
The filing deadline for 2010 is April 30th for individuals and June 15, 2010 for those with self-employment income.
Tax Deductions & Credits Other Than RRSP’s
For most individuals, RRSP’s are their biggest single tax deduction. And while there are strict limits to what an individual with employment income can deduct, you should look carefully for other opportunities to reduce you tax bill.
Other Tax Deductions
Here are some tax deductions that you might want to consider for 2010:
1. Union & Professional Dues – If you are a member of a professional organization such as an accounting or engineering body or if you are a member of a trade union, you can deduct your membership dues on line 212.
2. Childcare Expenses – If you pay to have your child in daycare, after school care or incur other childcare expenses so you can work or go to school, then these may be deducted. There are certain limits to the amount claimed and if you are married, the lower income spouse must claim the expenses .
3. Disability Support Deduction – If you have an impairment in physical or mental functions, you may be able to deduct the expenses on line 215 that you incurred in the year in order to work, go to school, or do research for which you received a grant.
4. Moving Expenses – If you moved more than 40 km from your current location to be closer to your employer, you may be able to deduct your moving expenses on line 219 of your tax return.
5. Alimony Support – If you have to pay your spouse alimony, you generally can deduct this amount from your income. On the other hand, you cannot deduct child support.
If you are making both payments, you might want to check your separation agreement to ensure the two amounts are clearly specified.
6. Interest & Carrying Charges – Did you borrow to invest? If so, you may be able to deduct the interest you pay on your investment loan or margin loan. Make sure that the loan was used to purchase stocks that pay (or may pay) dividends, bonds and other debt, or other types of securities (mutual funds & +ETF’s).
7. Employment Expenses – If your employer required to you pay some of your own expenses, you may be able to deduct these expenses. The rules can be a little complicated so take a look at my article on employment expenses and employee automobile expenses.
Top Tax Credits For 2010
1. The Home Renovation Tax Credit – If you did some renovations in 2009, you may be able to deduct these on your tax return. Take a look at Eligible Tax Deductions For Home Improvements as well as the comments and What You need To Know About The Home Renovation Tax Credit.
2. Pension Income Credit – If you earned eligible pension income in 2009, you are entitled to an additional tax credit of $2,000 (worth $300 of tax!). Find out if you have eligible pension income and then claim this amount on line 314.
3. Tuition & Education Amounts – If you child is attending a post secondary institution and has no or little taxable income, ask them to transfer their unused tuition and education amounts to you.
4. Home Buyer’s Tax Credit – Did you purchase an eligible home in 2009? You may be able to claim the First Time Home Buyers tax credit.
5. Medical Expenses – If you paid for medical expenses for yourself, your spouse, or your children you may be entitled to a tax credit. Claim this credit on the lower income spouse’s return to maximize this credit.
6. Charitable Donations – You get a credit of 15% of the first $200 of your charitable donation and 29% on anything above $200. Combine your donations with your spouse’s and claim them on one return!
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