Advertisement
Canada markets close in 4 hours 43 minutes
  • S&P/TSX

    22,186.79
    +79.71 (+0.36%)
     
  • S&P 500

    5,254.21
    +5.72 (+0.11%)
     
  • DOW

    39,746.37
    -13.71 (-0.03%)
     
  • CAD/USD

    0.7381
    +0.0009 (+0.12%)
     
  • CRUDE OIL

    82.61
    +1.26 (+1.55%)
     
  • Bitcoin CAD

    96,501.27
    +2,711.87 (+2.89%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,237.20
    +24.50 (+1.11%)
     
  • RUSSELL 2000

    2,127.46
    +13.11 (+0.62%)
     
  • 10-Yr Bond

    4.1940
    -0.0020 (-0.05%)
     
  • NASDAQ

    16,400.27
    +0.75 (+0.00%)
     
  • VOLATILITY

    13.01
    +0.23 (+1.80%)
     
  • FTSE

    7,974.23
    +42.25 (+0.53%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • CAD/EUR

    0.6832
    +0.0027 (+0.40%)
     

Seven unexpected things you can claim come tax time

Seven unexpected things you can claim come tax time

Waiting until the last minute to pay your taxes? Welcome to the club. With so many papers, receipts and questions to wade through every single year, owning up to the Tax Man has become a chore that most of us Canadians like to put off until the last minute – especially if we owe some cold, hard cash. No wonder nearly 35 per cent of us don’t even think of filing until April.

With that April 30th deadline quickly approaching though, it’s time to finally sift through those shoeboxes of papers and T4s and figure out what’s what before we have to pay interest on what we owe, and risk delaying some of the better credits that can come out of tax season like child tax benefit payments or HST/GST cheques.

As you’re going through those crumpled receipts and detaching perforated slips, keep in mind there are a few other potential ways to avoid paying exorbitant amounts to the government each year that you’ve probably never even heard or thought of. But, if you follow the rules, they’re also perfectly legit.

Your Arbonne or Scentsy party

Remember when you decided to invest in selling those amazing beauty products or candle alternatives, and got all of your friends on board too? As it turns out those investments can qualify as a legitimate business expense—provided you actually made more money off the products than you’re claiming in expenses.

ADVERTISEMENT

“In the long run it’s about making a profit,” explains tax advisor Melissa Wenderski from SourcePoint Business Group Inc.

If you have indeed made a tidy little profit for yourself and you want to recoup some of the costs, the traditional small business claims can apply. Think the cost of buying any products at the outset; food for the parties you’ve held to sell the products; transportation to pick up or deliver said products (with receipts outlying your careful mileage, of course), and potentially even some of your home expenses if you had to set up a home office.

Speaking of home offices, most Canadians also aren’t aware of a magical slip called the T2200—a form employees should get their employers to fill out if they’re expected to work even a portion of the time from home. Thanks to the power of that form, Canadians may also qualify to claim a portion of their phone, car, Internet or other expenses if it applies.

Charitable donations

In theory, most of us recognize that contributing to charity is not only good for the soul, but it can be good for the wallet too come tax time. But as it turns out, the type of charitable donations you make really affects how much you can claim. For example, a Heart & Stroke lottery ticket may be going to a good cause, but it doesn’t exactly qualify since it’s a lottery. Meanwhile if you’ve made a political donation to a federal party, you can claim 100 per cent of that contribution (as opposed to the standard 15 per cent you’re allowed to claim with standard certified charities).

There’s also a one-time “super credit” that Wenderski says may be worth taking advantage of if you’ve never given to charity before.

“It’s for the tax years of 2013-17. For people who are donating for the first time, you can claim 25 per cent of your donation versus the 15 per cent you would normally get,” she says. “It’s up to $1,000 in donations, which would bring down your taxes owing.”

Medical marijuana

The debate on whether or not to legalize cannabis continues in the Great White North, but those who have a genuine medical reason to consume marijuana can rest assured that the costly buds do come into play come tax time. Although you don’t technically need a prescription in order to claim your purchases, you do need a prescription to buy it in the first place. So grabbing some off the streets from Joe Schmo and trying to put it down on your forms won’t work, but if you have genuine receipts it’s worth saving them or tracking them down.

Gluten-free products

There’s more awareness around Celiac disease than ever before, so it’s kind of nice that the government is finally taking note of those who are forced to purchase the much higher-priced gluten-free alternatives instead. That doesn’t mean the entire amount of your grocery bill or all kinds of gluten-free products can be included, mind you. According to Wenderski, you’ll need to stick to the basics like bread, muffins and pasta, and you can only claim the difference between an average loaf of bread and a gluten-free variety. So if your gluten-free bread costs $7.50 and the average price of regular bread is $2.50, you can claim $5 total. You’ll also need to keep all of your receipts, so you may want to consider getting a bigger shoebox or filing system.

Insured medical bills

Wenderski reveals that one of the things her clients most often miss or forget about are their medical bills – and she’s not just talking about prescriptions either. Any form of physiotherapy, massage, an ambulance ride or specific needs like crutches or knee braces are on the table when it comes to filling out those tax forms. And if you do have partial coverage for any of these things, you can still claim the difference between what you paid and what you were reimbursed for. So be sure to keep a copy of your claims before you send them off to your insurance company.

Not covered through work but managed to secure some coverage on your own? Keep tally of all the premiums you’re paying for that coverage too – that’s also on the “definitely covered” list.

The kids’ hockey

The rules are always changing depending on that year’s budget and the government, but in 2015 you can claim up to $1,000 on the Children’s Fitness tax credit. If your kid is under 16 years old and is in hockey or any of the other eligible fitness programs, you’ll want to save your receipts. Don’t have a sporty kid? Not to worry – artsy kids are covered under the Children’s Arts program, in which you can claim up to $500 for eligible programs.

Sadly, if you’re looking to expand your own creative horizons or get in shape yourself, there are no benefits for you.

“Right now [the kids’ programs] are a refundable credit, so it actually gives you a refund when you do your taxes,” Wednerski says. “[But] there’s nothing for adults. I would love to write off my gym membership!”

Retirement savings

Ever since the Tax Free Savings Account was introduced in 2009, there has been some confusion as to whether Canadians should put their money into that or an RSP. For those in a lower tax bracket, RSPs may not be worth it unless you’re looking to take your return and place that into a TFSA. For those in higher brackets however, a registered retirement account is an often an under-utilized tool.

“A lot of people don’t know how RRSPs work so they don’t contribute, or else they think it doesn’t make a difference,” Wenderski explains. “But it does. Whatever you put in, it lowers your net income by that amount. For some people in a higher tax bracket that can amount to $300 or $400.”