Tax Tips: Make the CRA pay you

Over the next few weeks, most Canadians will have to face their tax bill. However, there are some changes and credits that may help your clients pocket some extra savings.

While there are basic credits available to Canadians on an annual basis, there are always some changes made to lesser-known credits each year that could add up in savings for those who are eligible.

“With the right strategies and knowledge of this year’s available tax credits it may be possible to reduce your [clients’] tax bill,” says Myron Knodel, director of tax and estate planning at Investors Group. “By understanding what new credits exist and how to use them, you can turn the tables on the tax man and lessen [their] tax burden.”

More importantly, it is crucial for clients to have all of the information well in advance of the tax deadline. By urging them to plan ahead, you can help reduce stress and increase savings.

“It’s important to know what you’re eligible for when filing, but don’t confuse last minute tax prep dash with real tax planning [since] proper planning includes taking the right financial steps throughout the year to reduce the taxes [paid],” Knodel adds. Listed below are a few changes and credits that may help your clients save:

• The children’s art tax credit offers guardians up to $500 per child against eligible fees for arts programs.
• The available contribution room for TFSA investment rose by $5,000 on Jan. 1, 2012 and now stands at $20,000.
• Fees for examinations to obtain professional status or to be licensed or certified in a profession or trade that amount to at least $100 now qualify for the tuition tax credit.
• Adoption expenses can be claimed up to $11,128 for an adoption finalized in 2011.
• There is no longer a limit to the maximum medical expense claim for a dependent relative (other than for a spouse, common-law partner or a minor child).