Written by Chartered Professional Accountants of BC
Tax season is beginning, and that means you are probably trying to make sense of tax changes and how to handle your RRSPs. The Chartered Professional Accountants of BC (CPABC) is committed to providing resources to assist individuals and businesses prepare their income tax returns, invest in RRSPs, and plan their finances. It is why the Chartered Professional Accountants of BC (CPABC) has compiled a list of “RRSP and Tax Tips” for the 2014 tax year as a public service to all British Columbians.
Here are 10 questions and answers regarding income, deductions and tax credits to help you get through this tax season:
1. What is the Family Tax Cut Credit?
The Family Tax Cut credit, effective starting in 2014, is a new non-refundable tax credit which can result in tax savings of up to $2,000 for couples with children under 18. The Family Tax Cut credit calculation can be quite complex, so consult a professional accountant for more information.
2. Can I claim a deduction if I’ve moved for work or school?
A lot of people may not be aware that you can claim a deduction for certain moving expenses if you have moved to work or carry on business in a new location, or to attend a university or other post-secondary educational institution. To be eligible, your new residence must be at least 40 kilometres closer to your new work place or educational institution. You may not claim a deduction for any expenses paid by your employer on your behalf.
3. Is there a penalty if a repeatedly fail to report my income?
If you missed or forgot to report any income on your 2011, 2012 or 2013 returns, and you again miss or forget to report any income on your 2014 return, you may be subject to a penalty for the repeat offense. This penalty applies whether the missing amounts are large or small, and even where they don’t actually increase your taxes owing.
4. Can I include the medical expenses of my minor children to my own medical expense?
You can add the medical expenses of your spouse and minor children to your own medical expenses. In addition, you can also add the medical expenses of certain other dependents subject to certain restrictions. In particular, caregivers are able to claim eligible medical expenses incurred in respect of a “dependent” relative if the caregiver pays medical or disability-related expenses of the dependent relative. For this purpose, a “dependent” relative is defined as a child who is 18 years of age or older, or a grandchild, parent, grandparent, brother, sister, uncle, aunt, niece or nephew, who is dependent on the taxpayer for support.
5. What expenses can I deduct from my rental income?
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