Tax Time is here.
We should all be completing our returns…why?
When we hear that it’s tax time again, many of us wince at the thought. But, there are many benefits to completing your tax returns. Here are some you should be thinking about:
For the Employee: To verify that your employer has deducted CPP, EI Benefits and Income Tax properly and to qualify for the Working Income Tax Benefit (WITB). You can also claim things like union or annual membership dues (line 212), or moving expenses if you moved more than 40 km to work or run a business (line 219).
For Parents: To qualify for benefits for your children. First of all there is the Canada Child Benefit that is a tax-free monthly payment to eligible families to help with the cost of raising children under 18 years of age. The CCB might include the child disability benefit and related provincial or territorial programs like the Ontario Child Benefit. You can also claim child care expenses. Learn more about child and family benefits.
For Students: To qualify for HST/GST credits. These payments are based on your previous year’s income. Students can claim a textbook tax credit and tuition fees. Even if you do not qualify this year for some of these credits, you may be able to carry them forward for future years or use them to build RRSP contribution room.
For Seniors: To qualify for the Guaranteed Income Supplement. If your income is limited, you could qualify for a top up of your Old Age Security cheque. You may also benefit from Pension Income Splitting and reduce your tax debt.
For Everyone: To qualify for the Goods and Service Tax Credit (GST). For this benefit you have to apply every year. Ontario also has combined the provincial sales tax, energy and property tax credits into an Ontario Trillium Benefit. This payment will be made to you monthly effective, July 10, 2019, based on your income or as a single payment at the end of the benefit year, June 2020. The Climate Action Incentive is a new refundable credit available as of January 1, 2018. It is intended to offset the Federal Carbon Tax that begins April 1st, 2019 increasing the cost of gasoline and residential heating. It applies only to certain provinces, including Ontario. For more information, check out Schedule 14, Climate Action Incentive. In addition, to qualify for credits on your medical expenses, donations, etc., you need to do taxes.
There are other credits that may apply to your circumstances, like the Home buyers’ amount (line 369) for first time home purchasers. Make sure you check out the Ontario Guide for any benefits that may apply to you.
And, completing your tax return is the law… and if you don’t file, CRA will charge interest and penalties. Even if you currently can’t pay what is owed, you need to complete your tax return.
Check out CRA’s website for detailed information on the above.