By Money Mentors, Special for USDR.
It’s that time of year again. The Canada Revenue Agency (CRA) is expecting you to mail in your annual income by April 30, 2015. From there, they will assess your tax return which will then qualify you as income tax receivable, or income tax payable. Being up to date on your taxes is something Money Mentors wants to educate Albertans on. Its value and importance is something we should all take the necessary time to become literate in.
The CRA website now hosts many new updates, including ways to better your return. Some do not begin until 2015 season, but for now, anyone filing a 2014 tax return should ensure they know everything there is to know. Here are some ways to increase your chances of a return:
1) RRSP’s and TFSA’s
There are more than a few reasons to invest in these two savings funds. Did you know the amount of money invested into these accounts yearly can end up giving you a nice tax break? RRSP’s will reduce your tax payable amount and as for TFSA’s, you will not have to pay taxes on earnings within this account.
2) Charitable Donations
Along with submitting all T4 slips, charitable donations are another great way to save money when filing your taxes. These donations will be more beneficial if the amount donated is over $200.00. A way to see an even larger return on investment would be to compile receipts, (they can be saved up to 5 years) and returning all at the same time. Be sure these donations are going to legitimate establishments and that you have a proper receipt.
3) Medical Expenses (Includes more than you think!)
Although it may not save huge bucks, every penny counts on a tax return. Many people don’t realize that depending on allergies, you can even save money on food costs. For instance, someone who is gluten free and has been prescribed to avoid certain foods could have a tax break. The government has a list of all medical expenses that are eligible. Check out the list here.
4) Public Transit
You might not enjoy taking public transit every day, but I bet you’ll love that you can keep these receipts and get some return on your investment. Keep in mind that the transit passes must be for unlimited travel use, which means 10-day passes or single rides do not count.
5) Child’s Art/Fitness Amount
How many of us have kids that are involved on a sports team or are taking guitar lessons? We often pay an arm and a leg, which is why it is important to keep the receipts for these extra-curricular activities on hand. This fitness and art tax credit is for any child under the age of 16 and allows for up to a claim of $1000.00 per year.
6) Childcare Expenses
Do you work full time and send your children to a daycare? This is one more area that the government wants to consider during tax season. As an eligible expense, submitting these receipts can save you money on your 2014 taxes. Added bonus: these claims will increase by $1000 for each age group starting on your 2015 taxes.
7) Job-Hunting Expenses
If you are currently looking for a new job, there can be tax breaks in this area of your life as well. Although a little more frugal, keep your receipt costs for travel to interviews, printing of resumes, and any other costs needed. Three things to note: the new career you are looking for must be in the same field as your current employment, you cannot do this after a substantial break between jobs, and new grads do not opt for this.
8) First Homes
As a new homebuyer, you can save a large amount of money on your taxes. For first time buyers, there will be a nonrefundable tax credit, usually of $5,000, that may be claimed in the tax year of the purchase.
Additional Tip: Students! Always keep receipts that are from the purchases of text books, school supplies, and more. You can benefit in a large way by including these when filing your taxes. For more information on taxes and the do’s and don’ts, go to the CRA website.
Money Mentors is the only Alberta-based, not-for-profit credit counselling agency. Through a number of services, we help families and individuals recover from financial crisis and move forward. From credit counselling and money coaching to retirement planning and community financial literacy, we are contributing to a healthier financial future for the entire province.