Make tax savings a family affair

Tax season can be a draining experience but there are several overlooked credits available that can ease the tax burden for many Canadian families.

The specific credits and tax savings depend on the individual and vary from province to province, so it might help to speak with an expert. Tax software programs can help identify the ones that apply to you, and the Canada Revenue Agency (CRA) website has a great search engine and provides calculators to determine how much you will save.

In all cases be sure to keep your receipts. Here are a few common, and not so common, tax credits that may apply to your situation:

Child tax credit: For the 2012 tax year families can claim $2,131 for each child under 18. That works out to a saving of $320 per child.

Children’s fitness credit: To promote physical fitness and reduce future health care costs the Government of Canada allows a tax credit of up to $500 per child under 16. That’s a maximum savings of $75 per child.

The activity, such as hockey registration, must be listed as eligible on the CRA website.

Children’s art credit: For more creative children the Government of Canada offers the same $500 per child credit for arts-related activity.

Qualifying activities have a broad reach, which are also listed on the CRA website.

Family caregiver tax credit: Taxpayers providing ongoing care for a spouse, common-law partner or minor children who are ill can claim an addition $2,000.

The CRA normally requires a signed statement from a medical doctor stating when the impairment began and how long the impairment is expected to last.

Adoption tax credit: Qualified parents who pay out of their own pocket for expenses relating to the adoption of a child are entitled to a tax credit. The amount saved depends on the amount spent.

If the child has special needs the parent can claim the full amount.

Single parents: The parent who has primary custody of a child is normally the parent who can claim credits relating to raising the child.

However, like anything relating to a marriage breakup, things can get complicated. If responsibility is shared, the credits can be split. In cases like this it’s probably best to speak with a tax professional.

Public transit credit: Canadians who use public transit can claim the full amount on eligible transit passes as long as they travel within Canada. Monthly passes or longer can be claimed but in some cases shorter duration passes are acceptable to the CRA if they are for unlimited travel for an uninterrupted period of at least five days and they add up to at least 20 days in a month. In other words, single fares are not eligible for the credit.

Modes of transportation include local busses, streetcars, subways, commuter trains or local ferries.

Education tax credit: Full-time and part-time students can claim a basic credit as well as a textbook credit and a credit for interest paid on student loans.

For the brains in the family - scholarships, bursaries and fellowship income are fully exempt from tax when the income is received in connection with a program for which the student will get an education tax credit.

If you are not eligible to claim the education tax credit, then only the first $500 of awards is tax free.

Medical expense tax credit: Uninsured costs associated with medical expenses for individuals or their dependents are fully eligible for the medical expense tax credit.

To qualify the medical expenses must have been paid by the individual making the claim or a legal representative and be approved by the CRA.