Are you an investor?
You may be able to claim deductions for:
Interest - If you've borrowed money that you're using to earn income from a business or property, such as common shares bought on the stock market, the interest you pay is generally deductible.
Carrying charges - You may also be able to deduct carrying charges you pay to earn investment income, such as charges for the management and safekeeping of your investments; safety deposit box fees; accounting fees for recording investment income; and fees for investment counselling.
RRSP contributions - If you made an RRSP contribution by March 1, 2009 and you have enough RRSP deduction room, you can claim the deduction on your 2008 income tax return or carry it forward, if doing this will benefit you more.
Small business investment losses - If you or your company invested money in an unsuccessful "small business corporation" and you now have a capital loss on shares of the corporation or debt it owes you, the losses may qualify as "allowable business investment losses". Unlike other capital losses, this type of loss can be used to reduce income other than just simply capital gains, such as employment or investment income.
Are you a commuter?
Commuters' tax credit - If you kept your monthly or certain eligible weekly transit passes for travel on local or commuter buses, subways and trains, remember to claim the new transit pass tax credit on your 2008 personal tax return. You may be able to claim the credit for monthly passes used by your spouse or child under 19.
Are you a business owner?
Self-employment expenses - If you're self-employed, make sure you take advantage of all the business-related expenses that you can claim to reduce your taxes. These include automobile expenses, parking fees, business association fees, entertainment costs, cell phone bills, depreciation on your computer and salaries paid to assistants, including family members. Remember that in most cases, you can deduct private health care premiums as a business expense instead of as a medical expense.
Are you an employee?
Employment tax credit - If you are employed, remember to claim the employment tax credit on up to $1,019 on your 2008 tax return to help cover your work-related expenses.
Do you have a family?
Child care expenses - If you have qualifying child care expenses, you may be able to deduct $7,000 for each child under seven and $4,000 for each child aged seven to 16. The expenses have to be made to allow you or your spouse to work, carry on business, attend school or carry on grant-funded research. Usually, the lower-income spouse must claim the deduction. If the lower-income spouse is a full-time student, however, the higher-income spouse may be entitled to deduct part of the child care expenses.
Children's fitness tax credit - If you have a child under 16 enrolled in an eligible fitness program, you may be able to claim a credit on up to $500 of related expenses paid in 2008.
Charitable donations - If you're married, don't claim charitable donations separately - combine them and claim them on the higher-income spouse's return. The receipts can be in either spouse's name.
Pay your spouse's tax bill - If you earn income in a higher tax bracket than your spouse, consider paying your spouse's tax bill with funds from your own separate bank account. This will leave your spouse with more funds of his or her own for investments, on which he or she will pay a lower rate of tax than you would.
Transfer your credits - If claiming certain non-refundable credits has reduced your federal tax owing to zero without using up all the credits, you may be able to transfer the unused amount to your spouse. Credits for tuition fees, education amounts, the age amount (for people over 65) pension income credits or disability credits can be transferred to your spouse's return, as long as you've used as much of them as you could.
Are you a student?
Transfer unused credits - If you're a post-secondary student and you are not able to use your tuition, education and textbook credits in 2008 (because you have no tax to pay) you can normally transfer up to $5,000 in combined federal credit amounts to your spouse or to a parent or grandparent. You can carry forward any unused and untransferred tuition, education and textbook amounts and claim them against your taxable income in any later year.
Did you move during 2008?
Moving expenses - Moving expenses are often overlooked as a deduction. If you started working at a new location of employment or started a new business in 2008 and you moved to a home that is 40 km closer to your new work location than your old home was, you may be able to deduct many of your moving expenses, providing that the expenses were not reimbursed by your employer.
Do you have medical expenses?
Medical expenses - If your family has medical expenses totalling more than 3% of your net income (or more than $1,962 if your net income is over $65,400), you may be able to claim a federal tax credit for all qualifying expenses above the threshold. Keep in mind that you can claim your expenses for any 12-month period ending in 2008 on your 2008 return. The list of qualifying expenses is long - check the CRA web site for more information.
Can't afford to pay your tax bill?
Reduce late filing penalties - File your return on time even if you can't pay the balance owing. Doing this will eliminate the 5% late-filing penalty, though you will still have to pay interest on your balance. If you can't file your return on time but you know you owe taxes, making a payment by April 30, 2008 will help reduce late-filing penalties.
If you are self-employed and have June 15 filing deadline, you should still pay your estimated tax owing by April 30 to avoid late payment interest charges.
Market Information
2009 Tax Free Saving Account ((TFSA):Any Canadian can open a TFSA if they''ve filed a tax return and are 18 years of age or older. A TFSA lets you invest without being taxed on interest or investment earnings. Initially, you annual contribution room is $5,000 in a calendar year. In future years, government may increase the annual amount in $500 increments to recognize the impact of inflation. Unused contribution room gets carried over to the next calendar year.There is no limit to how much contribution room can be carried forward. If you take money out of your TFSA, you don''t lose the contriution room - you get it back in the following calendar year. Your contribution room for the next calendar year will increase to reflect the amount of your withdrawal. While you can hold more than on TFSA across a number of financial institutions, you''ll need to be careful not to over-contribute. Total contributions across all accounts can''t exceed your accumulated contribution room. Each year you''ll be assessed a 1% penalty on the amount you exceed your accumulated contribution room. Unlike an RRSP, you don''t deduct your TFSA contributions from income on a tax return. However, the earned interest or growth won''t be taxed. And money you take out of your TFSA won''t affect federal income-tested benefits and credits. TFSA contributions are made with after-tax dollars, so you can help your spouse or adult children in setting up their TFSAs. The interest they earn on this gift isn''t taxable to you or them. CRA Reference:http://www.cra-arc.gc.ca/gncy/bdgt/2008/txfr-eng.html
