Tax Time: Tax Deductions & Credits For 2010

by Tax Guy - Burlington Accountant on March 2, 2010 Print This Post Print This Post

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!

QuickTax Platinum Giveaway

I have a single copy of QuickTax Platinum that I will give away on Saturday March 6, 2010.

This contest is over.

Maximize your refund with TurboTax. Get Your QuickTax Now.

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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{ 12 comments }

Wai Fong Liu March 2, 2010 at 1:43 pm

It sounds great to have a free copy to try with.
Why not to try it and to get the maximum credit may be I missed before.

Paul P March 2, 2010 at 2:37 pm

I have used Quicktax standard before. It has never found any deduction I didn’t expect since my taxes are usually quite simple. I’m getting into investing now and would be curious to see if the Platinum is worth the extra cost for working with capital gains and losses.

The Rat March 2, 2010 at 7:41 pm

Count me in for the draw!

I have never used tax software and have up to this point used more of a traditional approach. I gather and keep all pertinent documents and sit down with my accountant once a year before filing.

But that doesn’t mean I’m not receptive to trying new things! Who knows, maybe I will try Quicktax one day.

Cheers!

Chavdar March 2, 2010 at 11:06 pm

I am in too. I sent my netfile last year using tax software but there were no hints or advices, just stright data entry and links to CRA web site. I will be happy to try QuickTax!

Simon March 5, 2010 at 10:11 am

I use tax software before (Quick Tax and UFile). They haven’t turned up any unexpected deductions or credits, but I keep hoping.

The Rat March 5, 2010 at 10:35 am

This is an awesome thread BTW–great tips.

Felix Berube March 5, 2010 at 4:14 pm

I use tax software but found if one does not know how to use it they may not be doig themselves a favor.

Joe Helten March 5, 2010 at 6:13 pm

First comment but I read this blog pretty often. Thanks for the tips!

Erin D March 5, 2010 at 6:22 pm

I love tax software! I used to work as a tax preparer in the days where doing the returns by hand was typical, so I love the ease of use of the tax programs (and I LOVE that I don’t have to sit there with a calculator). The feature that optimizes your refund is fantastic!

Nandu August 25, 2010 at 12:58 pm

I am going to work on a “Draw and Commission” basis, i.e. “they give me small “Draw” of $300 every week and then, I get commision for each sale, with Commisssions being paid in arrears bi-weekly at a rate of $500 per unit sold with 50% of the total being applied to any previously outstanding draw”.

Can you explain me what this means; and can I subtract my direct expenses (automobile to get sales and lunch for client, etc) from the “Draw”, i.e. that effectrively reduces my gross income for the purpose of calculating taxes?

Tax Guy August 25, 2010 at 3:30 pm

The commission you are paid (not the draw) is taxable income. The draw is only an advance that is repaid.

In terms of deductions, salespeople may have certain deductions which I explain here.

Joan Epp December 28, 2010 at 8:37 am

I have never used tax software before. I’m a recent widow. He left me the farm, I have a career, 3 teens and right now I employ a very expensive accountant. I’m interested but not sure it’s easy or efficient enough to do what I need it to do. Taxes are like a big mystery that’s being unravelled day by day to me.

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