Tax tips for seniors

The Canada Revenue Agency, along with posting tax tips for families and students, has also posted tax submission tips and hints for seniors.

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With the submission deadline approaching, make sure your clients take advantage of the following the benefits and hints provided by the CRA:

Age amount: If your client was 65 years old or older on December 31, 2011, and their net income was less than $76,541, they might be able to claim this non-refundable tax credit.

Pension income amount: If clients reported eligible pension, superannuation, or annuity payments on their returns, they might be able to claim this non-refundable tax credit.

Pension income splitting: If your client and their spouse or common-law partner split pension income by completing Form T1032, Joint Election to Split Pension Income, they (the pensioner) can claim a deduction for the elected split-pension amount.

Registered retirement savings plan (RRSP): Deductible RRSP contributions may be used to reduce your tax.

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Disability tax credit: If your client had a severe and prolonged impairment in physical or mental functions in 2011 and meets certain conditions, they might be able to claim this non-refundable tax credit.

Public transit tax credit: Did your client use public transport in 2011? They might be able to claim the cost of eligible transit passes or electronic payment cards as a non-refundable tax credit.

GST/HST credit: Low- and modest-income individuals and families may apply for this quarterly payment by completing the application on the first page of their 2011 income tax and benefit return.

In addition, the agency has highlighted the following changes applicable to Canadian seniors in regard to their tax returns:

Canada Pension Plan (CPP): If your client is between 60 and 65 years of age, they receive a CPP or Quebec Pension Plan (QPP) retirement benefit, and are still working, they will now have to contribute to the CPP.

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If they are 65 to 70 years of age, receive a CPP or QPP retirement benefit, and are still working, they will now have to contribute to the CPP unless you elect to stop.

Medical Expenses for eligible dependants: Now, tax filers may be able to claim a non-refundable tax credit based on the cost of medical expenses for any 12-month period ending in 2011.

Also note that if they receive income that has no tax withheld, or do not have enough tax withheld for more than one year, they might have to pay tax by installments.

This can possibly happen if they receive rental, investment, or self-employment income, certain pension payments, or income from more than one job.

For more information, visit the CRA website for seniors at www.cra.gc.ca/seniors.