Tax Reminders for December
There are a few things you can do before December 31st to save on your 2018 taxes, but don't wait until the end of the month.
Make your charitable donations before December 31 so you can use them on your 2018 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. But donations don't help those with no taxes payable (check if line 435 was zero for 2017).
Political contributions need to be made by December 31 to use the attractive deduction on your 2018 taxes: If you contribute $400 you get back $300.
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 (LinkCharity.ca).
If you collected EI in 2018 and your total income was more than $64,625, consider buying RRSPs to reduce the EI clawback (you have until Mar 1 2019 to buy RRSPs). See us in January or February to estimate your 2018 taxes.
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 to the 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 to estimate your 2018 taxes; this may not save taxes in 2018 but it may in the future.
If you are within five years of retirement and contributing to a Spousal RRSP, do it by December 31 instead of January or February 2018. If you don't know why, ask me!
If you turned 65 in 2018 and do not have a private pension plan, convert some of your RRSPs to RRIFs and then withdraw $2,000 before December 31st to take advantage of the Pension Income Credit (or $4,000 for pension income splitting).
December 31 is the deadline to make any changes to your 2008 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 2008 to a disability friendly home? Time limited offers!
If we need to adjust your 2015 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 do not receive the $700 credit on your property tax bill, we can claim it on your income taxes, but we can only go back three years!
Here are some other tax tips for 2018 from the entire Ste Anne Tax Service team:
Darlene: Regarding medical travel expenses, keep your 2018 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, 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 for each family member.
Therese: Regarding prescriptions, we recommend you go to your pharmacy in January and ask for a detailed list for the entire 2018 calendar year for each family member. Easier than keeping all those little receipts!
Marie-Rose: Remember all medical expenses: premiums for health plans you pay through work or pension (keep the 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 and some other health professionals).
Therese: Students need to get their T2202a Tuition receipt on-line from University or College. Any unused tuition and education creditscan be transferred to a parent, grandparent, spouse, or carry them forward and claim in a future year.And remember to claim your (official) Student Loan Interest as a credit.
Anni: For those that are self-employed or have rental property or claim employment expenses: read your vehicle odometer on December 31st and hope you did on January 1st2018 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 2018 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.
Therese: So many receipts to obtain and keep: charitable donations; rent; children's activities for the fitness and arts (MB only now); RRSPs (remember the March to December 2018 and the January and February 2019 receipts); political donations; child care; union dues and other professional fees; moving expenses if you moved for work or to a more accessible home; 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 and dental plan premiums may be listed on your year-end pay statement, too.
If you haven't gone south yet and need Snowbird Mail Service, give us a call and arrange for 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 20. A representative is there to answer any questions you have about CPP and OAS and you can get signed up for on-line access too.
Merry Christmas, Joyeux Noel, FroheWeihnachten, Glaedelig Jul
Your Ste Anne Tax Service team
Anni Markmann is a Personal Income Tax Professional and Certified Financial Planner; living, working, and volunteering in our community. Contact us at 204.422.6631 or 36 Dawson Road in Ste Anne (near Co-op) or Info@SteAnneTaxService.ca