Save Taxes in December
There are a few things you can do before December 31st to save on your 2017 taxes, but don't wait 'till the last minute.
The First-Time Donor's Super Credit ends December 31. If neither you nor your spouse claimed a donation tax credit from 2008 to 2016, you can get a super credit for your donation. If you donate $1,000 to registered charities, it may actually only cost you $300. You could get total tax credits of about 70%. If this applies to you, consider making a "super" donation before December 31.
For the rest of us regular donors, I recommend topping up your donations before December 31 so you can use them on your 2017 tax return. You don't have to claim them all in one year, since the first $200 attracts just a small credit, you can defer claiming them up to five years and get more tax savings.
If you have shares or mutual funds that have increased in value in a non-registered account, you can donate some or all of them and not pay taxes on the capital gains if you use an organization like Link Charity.
If you collected EI in 2017 and your total income was more than $64,000, consider buying RRSPs to reduce the EI clawback.
If you have children under 18 and your family income is under $65,000, buy RRSPs to increase the Canada Child Benefit.
Contribute to the family's Registered Education Savings Plan (RESP) and Registered Disability Savings Plan (RDSP) by December 31.
If you are 55+, look at your tax brackets and maybe withdraw a bit more from your RRSP or RRIF to get the registered money out at a reasonable tax rate. (Don't do this by yourself; ask for professional help in estimating your 2017 taxes; this may not save taxes in 2017 but it may in the future).
If you are nearing retirement and contributing to a Spousal RRSP, consider doing it by December 31 instead of January or February 2018. If you don't know why, ask me!
If you turned 65 in 2017 and do not have a private pension plan, convert some of your RRSPs to RRIFs and then withdraw $2,000 to take advantage of the Pension Income Credit.
December 31 is the deadline to make any changes to your 2007 taxes. Why would you need to? Maybe you qualified for the Disability Tax Credit then, but never claimed it? Maybe you incurred some capital losses that year and didn't claim them? Or did you move in 2007 to a disability friendly home? Time limited offers!
If we need to adjust your 2014 taxes for the Pension Income Splitting, we need to do that before the end of the year; we only have three years to adjust the splitting.
If you have not received the $700 credit on your property taxes, we can claim it on your income taxes, but we can only go back three years!
The Home Accessibility Tax Credit was new for 2016 to assist seniors and those eligible for the Disability Tax Credit, with certain home renovations such as grab bars, wheelchair ramps, walk-in bathtubs and showers; keep your receipts!
Here are some other tax tips for 2017 from the entire Ste Anne Tax Service team:
Ruth: Regarding medical travel expenses, keep your 2017 wall or pocket calendar or wherever you record all your doctor appointments. Use a medical log sheet to record the dates, doctor's name, name of clinic or hospital, and number of km for any appointments more than 40km one way, and for a medical service you cannot get locally. If you need a log sheet, drop by the office or call or email us for a copy. If you didn't keep track of all your medical appointments, you can contact Manitoba Health and get a printout for the year.
Therese: Regarding prescriptions, we recommend you go to your pharmacy in January and ask for a detailed list for the entire 2017 calendar year for each family member. Easier than keeping all those little receipts!
Cheryl: Remember all medical expenses: premiums for health plans you pay through work or pension (keep your end of year paystub or get a letter from your employer if it just says "insurance"), or directly from your bank account (need a receipt or letter); dental; chiropractor; eye exams and glasses; travel health insurance; portion of rent if you are in senior assisted living or supportive housing; laser eye surgery; hearing aids; dentures;and any expenses that you pay yourself that is not covered by a health plan (excluding massage therapy).
Therese: Students need to get their T2202a Tuition receipt on-line from University or College. Any unused tuition and education credits (MB) can be transferred to a parent, grandparent, spouse, or carry them forward and claim in a future year. Remember once you graduate, you can claim the Manitoba Tuition Fee Income Tax Rebate. And remember to claim your (official) Student Loan Interest as a credit.
Cheryl: For those that are self-employed or have rental property: read your vehicle odometer on December 31st and hope you did on January 1st so you know how many km you drove for the entire year (or use some service records to estimate the year). And we need your recorded log of business related trips. Stock up on some supplies so you can claim in 2017 and maybe your capital purchases, too. Start organizing your receipts by category if you haven't yet: it will be much easier to do it now rather than when you are nearing the filing deadline of June 15.
Anni: So many receipts to keep: charitable donations; rent; children's activities for the fitness and arts (MB only now); RRSPs (remember the March to December 2017 and the January and February 2018 receipts); political donations; child care; union dues and other professional fees; moving expenses if you moved for work or to a more accessible home; transit passes and receipts (to Jun 30 only); and tools receipts if you are a tradesperson.
Darlene: Keep your last pay stub of every year (forever!) in case you pay for disability premiums and can claim them as a deduction in the future if you are ever off work. And your health care premiums may be listed there, too.
If you haven't gone south yet and need Snowbird Mail Service, give us a call and arrange pick up of your mail while you are gone.
And remember Service Canada comes to Ste Anne (beside our office) the third Thursday of every month, including December 21. A representative is there to answer any questions you have about CPP and OAS and you can get on-line access too.
Merry Christmas, Joyeux Noel, FroheWeihnachten, Glaedelig Jul
Ste Anne Tax Service team
AnniMarkmann is a Personal Income Tax Professional and Certified Financial Planner; living, working, and volunteering in our community. Contact her at 204.422.6631 or 36 Dawson Road in Ste Anne (near Co-op) or Info@SteAnneTaxService.ca