The Learning Centre:
Tax credits: what you don’t know can cost you
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When it comes to tax time… are you taking advantage of ALL of the tax credits available to you? If you’re not sure, chances are… you’re not.
In fact, according to the Canada Revenue Agency (CRA), the bulk of Canadians are not claiming all of their eligible tax credits. Which means many of us are potentially missing out on bigger returns.
After paying taxes year in and year out on your hard-earned educator salary—are you really wanting to let the government keep extra money that should be coming back to you? We didn’t think so.
To ensure you receive the tax refund owing to you, we’ve assembled some of the eligible tax credits (that perhaps you didn’t know about) that are very specific to education members:
Union dues: You’ve paid your dues… now get ‘paid’ for paying them. Membership dues for unions can be deducted on income tax returns—so if you haven’t been doing so already, be sure to claim those dues to help lower your taxable income and potentially increase your tax refund. Visit the Canada Revenue Agency website for more information on tax credits for union dues.
Part-time travel costs: Are you a part-time teacher or support staff worker doing double duty at more than one school? Well if you’re a part-time educator working at two locations (or more), you can deduct a portion of the costs of getting from one school to the other if the distance is at least 80 kilometres from your home. The Canada Revenue Agency offers more information on tax credits for part-time travel costs.
Eligible educator school supply tax credit: Have you purchased school supplies such as books, games, writing materials, or educational support software for your classroom? You may be able to claim 15% of up to $1,000 (up to $150). For more details, check this out.
Work-space-in-the-home expenses: If you have an official tutoring business on the side operating out of your home (‘official’ meaning that your tutoring services are registered as any other home business would be), you can claim some of your electricity, heating, maintenance, property taxes, and home insurance costs.. Click here for more information on tax credits for at-home classroom costs.
What happens if you’ve already filed your return? Do you lose out on the tax credits you didn’t claim?
If you filed your taxes before knowing you could claim a certain deduction, no worries. The CRA allows corrections and omissions for a 10-year period. So it might be worth the time involved to go over the last 10 years of returns—just in case you have a lot more money owing to you than you thought.
A few more tax breaks to keep in mind:
Charitable donations: Everyone knows you can deduct charitable contributions. But did you know you could also deduct the cost of transportation to a charitable event? Keep track of your mileage and deduct it come tax time—and of course be sure to collect those tax receipts when donating to charity.
Tip: Charitable donations result in a larger tax credit once the total value donated exceeds $200. Since charitable donations may be saved for up to five years, compiling them for a few years and claiming them all in one year will give you a larger total credit than claiming a small amount every year.
Your first home: If you’re in the process of buying your first home, there’s a non-refundable tax credit of $5,000 that may be claimed in the tax year of the purchase.
Moving to be closer to work or attend school: Moving expenses are also often missed and that doesn’t only mean the amount you spent on a moving truck and boxes. That’s because real estate commissions (which can run into five figures) are part of the claim and available if you moved at least 40 kilometres. If you assume those commissions were $20,000; at a 40% marginal tax rate, that’s worth $8,000 to you!
Kids’ activities and lessons: If junior is enrolled in pricey skiing lessons in the winter and soccer camp in the summer, you’ll be able to get some of those costs back in the form of a credit. The Children’s Fitness Tax Credit allows parents to claim up to $500 of the costs for any children less than 16 years of age to participate in fitness activities such as sports teams and lessons.
Further tax breaks: The cost of daycare qualifies too, so be sure to save those receipts!
When it comes to tax credits, the more you know—the more you’ll be in a position for happy returns.
If you’re still unsure whether you qualify for certain credits, be sure to talk with your accountant or refer to the CRA’s website. For those of you expecting a refund, don’t put it to waste. Educators Financial Group can help you make that extra money work extra hard for you. Here are few ways to get a jumpstart on maximizing that tax refund.