Key Tax Credits to Review

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Key Tax Credits to Review

As everyone begins to assemble their tax documents to complete their 2021 income tax returns, there are some tax credits you will not want to overlook.

Be sure to bring any expenses to your accountant. Here is a helpful list.

Carry Charges

If you have a fee-based investment account, the fees to manage your non-registered investments may be tax-deductible. See the CRA Website.

Home Office Expenses

From the CRA website

If you worked more than 50% of the time from home for a period of at least four consecutive weeks in the year due to COVID-19, you could claim $2 for each day you worked at home during that period, plus any other days you worked at home in the year due to COVID-19.

The temporary flat rate method can be used in 2020, 2021, and 2022, and you can claim up to a maximum of $400 in 2020 and $500 in 2021 and in 2022.

Everything you need to know about claiming home office expenses on your tax return

Home Buyers’ Amount

From the CRA Website

You can claim up to $5,000 for the purchase of a qualifying home in the year if both of the following apply:

  • you (or your spouse or common-law partner) acquired a qualifying home
  • you did not live in another home owned by you (or your spouse/CLP) in the year of acquisition or in any of the four preceding years (first-time home buyer)

Medical Expense Tax Credit

From the CRA Website

You may be able to claim some of the money you spend on medical expenses on your income tax return. Some common medical expenses include:

  • prescription drugs
  • personal health plans
  • medical treatments not covered by provincial plans
  • hearing and vision aids
  • mobility aids
  • some renovations for mobility related aids

See the CRA website HERE for a full list of expenses.

You can claim medical expenses for you and your spouse/CLP for any 12-month period that ends in that tax year.

Disability Tax Credit

From the CRA Website

If you or your spouse/CLP have a severe and prolonged impairment and meet certain conditions, you may be eligible for the Disability Tax Credit (DTC). For example, Alzheimer’s would qualify for the Disability Tax Credit.

To determine eligibility you must complete Form T2201, Disability Tax Credit Certificate and have it certified by a medical practitioner.

In 2021 the disability amount was $ 8,662; therefore, this would reduce your tax owing by $1,299.30 (15% tax credit).

If you or your spouse/CLP live in a nursing home, you may want to apply for the Disability Tax Credit. If you or your spouse/CLP live in a retirement home, you may wish to review to see if you qualify.

The Canadian Caregiver Credit

From the CRA Website

If you support your spouse/CLP who has a physical or mental impairment, you may be eligible for the Canadian Caregiver Credit.

The maximum you can receive in 2021 is 15% of $7,348 as a credit. ($1,102.20). There is an income threshold you will have to review.

Jack Lumsden, Financial Advisor

Home Accessibility Expenses

From the CRA Website

These are renovations that allow the individual to be more mobile and functional within the home, and/or reduce the risk in gaining access to the home.

To qualify for the home access credit, you must be age 65 and eligible for the Disability Tax Credit.

A maximum of $10,000 per qualifying individual can be claimed per dwelling. You will need supporting documents, and be sure to review which expenses may be eligible.

Seniors’ Home Safety Tax Credit

From the Ontario.ca Website

The Ontario budget proposes that starting in 2021, a refundable tax credit is available that is worth up to 25% of $10,000 of eligible expenses to make homes safer and more accessible.

You must be age 65 by the end of 2021 or live with someone who is.

The improvements would have to be towards the principal residence, and there is no income test to receive.

Sample examples:

  • grab bars and related reinforcements around the toilet, bathtub, and shower
  • wheelchair ramps
  • stair lifts
  • elevators
  • renovations to permit first floor occupancy or a secondary suite for a senior

Be sure to review what may qualify before starting renovations.

Summary

The following link to the CRA web site has all the deductions, credits and expenses you may be able to claim.

To save on tax, be sure to review all your expenses with your accountant and CFP® professional.

For more information, you can refer to Preserving Wealth: The Next Generation - The definitive guide to protecting, investing, and transferring wealth by Jack Lumsden, MBA, CFP®

Jack Lumsden, Financial Advisor

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Jack Lumsden, MBA, CFP® Financial Advisor, Assante Financial Management Ltd.

This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see me for individual financial advice based on your personal circumstances. The information provided is for illustrative purposes only. Commissions, trailing commissions, management fees and expenses, may all be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. Please read the Fund Facts and consult your Assante Advisor before investing.

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