Your Essential Tax ListBrian Jang ON December 10, 2019
Don’t be like so many others when tax time comes around: disorganized, panicked, and scrambling to find everything you need. Do yourself a favour and prepare in advance, making use of a checklist. Even if you don’t have much to keep track of, there are basic items common to everyone that need to be included on your tax return.
Before getting started, you should have all the basics on hand. And easily accessible. This includes your personal information (name, address, and social insurance number), as well as copies of the last year’s return and notice of assessment. If you are in Quebec, you will need a 4-digit code to file your return online. Outside of Quebec, this is no longer necessary; all you will need is your SIN and birth date.
For many, the tricky part of preparing for tax time involves gathering all the relevant slips and paperwork. In order to file your taxes, you need to be sure that you have copies of all your tax slips. Some might arrive by mail, while others are available online. The slips most issued are employment income (T4), investment income (T5), pension income (T4A), and amounts for education, tuition, and textbooks (T2202A).
Common Tax Deductions
Here are some of the more common deductions that you are likely to encounter:
- RRSP Contributions
If you have been contributing to a Registered Retirement Savings Plan, your financial institution should provide you with a tax slip. Your RRSP contributions should be claimed on your tax return.
- Medical Expenses
Though these are often overlooked, you are permitted to claim medical expenses for a period of 12 months ending in the current tax year. Keep all of your medical receipts. The CRA may require a copy of these receipts even after filing. Any expenses that surpass the CRA limit (the lesser of $2,171 or 3% of your income) become a credit on your return.
- Childcare Expenses
You can deduct your childcare expenses. If you are supporting the child by yourself, you may claim the expenses for the period that the child was living with you. If another person eligible for claiming this amount is living with you, then generally the claim is made by the person with the lower net income.
- Amount for Children’s Fitness
You are able to claim fees related to the cost of registration and membership for your child, or the child of your spouse or common-law partner in a prescribed physical activity program.
- Amount for Children’s Arts
You may claim fees paid for the registration and membership in a prescribed artistic program for your child or the child of your spouse or common-law partner.
- Business Expenses
Those who are self-employed are able to deduct certain business expenses. The maximum amount deductible depends on whether it is a capital expense or current-year expense. The CRA website provides a list of allowable expenses. Personal expenses are not permitted; therefore, you will need to deduct only the business portion of expenses from your business income.
- Additional Business-Related Expenses
These expenses can include such things as meals, lodging, and parking.
- Public Transportation
If you purchase a monthly pass for public transit, or other long duration passes, you are able to deduct them.
- Income and Expenses Related to Rental Property
Both the eligible expenses and the income related to rental property are deductible. You may also be able to claim the Capital Cost Allowance (CCA) based on the depreciation of the rental property.
- Charitable Tax Credit
You can deduct donations made to charitable organizations. See the CRA website for details on the amount that may be deducted and how it is calculated.
- Union Dues/Professional Dues
You can deduct the annual membership dues for trade unions and associations of public servants. You may also deduct professional board dues, insurance premiums for professional or malpractice liability, and party or advisory committee dues.
- Moving Expenses
You are able to claim eligible moving expenses if you move to a new home for work or run a business in a new location. You may also claim moving expenses if you have moved in order to take courses as a full-time student in a post-secondary program in a college, university, or other educational institution, provided your new location is at least 40 kilometres closer to the place of work or learning.
Taking the time now to prepare a checklist will help you ensure that your tax return goes more smoothly, and that nothing is missed.