New Year’s TAX Resolutions
Get ready for your 2018 personal income tax filing by getting many of your tax papers ready now. Make a resolution to yourself that you will be ready to file your personal income taxes as soon as you have all the rest of your tax slips that are normally issued to you at the end of February.
Find or get all your medical receipts for all or part of any expenses that were not covered by any health plan you have.
Remember that you can only claim medical expenses if you pay taxes. Some taxpayers have low income and do not pay income taxes, so medical receipts cannot reduce your taxes payable any lower than zero (if your line 435 was zero for 2017, you did not pay taxes).
And those with higher income and low medical expenses likely cannot claim either since the medical expenses need to be more than three percent of your net income.
The health premiums you pay may be via your pay cheque, so save your final pay statement for 2018. If it says “group insurance” that is not sufficient since it likely includes life and disability insurance too. Get a statement or letter from your employer stating what the total premium is for just the health and dental portion.
I recommend you keep a copy of your last pay statement each year if you are paying for all or a portion of your disability premiums through work. If you should go on disability, you can deduct all the premiums you paid over the years. But only if you have proof!
If you pay for your health premiums via direct withdrawal from your bank account, you need to get a receipt from the provider.
Find or get copies of all of the expenses you paid out of your own pocket: it could be the 20% or the 50% your plan does not pay or the yearly deductible or there may be some costs the plan does not pay.
Go to your Pharmacy(ies) in January and ask for a detailed print out of all the prescriptions for all of your family members for 2018.
Keep your 2018 calendar! Where do you keep track of your medical appointments? Did you travel for medical appointments? You can claim medical travel if you have to drive more than 40km one way for a service you cannot get locally (often specialists). You need to complete a travel log with detailed info (ask our office for a copy). Those who travel more than 80km one way can also claim parking, a meal, and accommodation.
If you sold some of your non-registered investments, make sure you or your advisor have the correct Adjusted Cost Base (what you paid for the investments). You need this information to claim the correct capital gain or loss.
If you sold any property including your home, you need to have information for your tax preparer or Canada Revenue Agency: How much did you sell it for? How much did you pay for it? Any capital improvements? When did you buy it? Did you own another property or recreation property at the same time? If these questions seem confusing or daunting, see a tax professional.
Rent receipts are important if you are claiming them on your taxes for the $700 Manitoba education credit. Ask your landlord for a copy if you haven’t received each month during 2018 or you cannot find them.
If you are 65+ and can claim the Senior School Tax Credit (family income under $64,500), find or get the copy of the Property Tax Bill so we can see how much you paid for the education portion of the Bill. And if you claimed the Farmland School Tax Credit, we need that info too.
If you haven’t applied for the Farmland School Tax Credit, do so now. The deadline is March 31, 2019. You may be like me and do not farm, but if you have some acreage, check to see if it says “farmland” on it anywhere; you may still be eligible for the rebate.
Record your vehicle(s) odometer on January 1 2019 (or as soon as you read this!) if you are self-employed or if you receive a vehicle allowance on your pay cheque. If you use a vehicle for business or employment (received an allowance), you need to keep track of vehicle use each day. And hope you recorded the odometer a year ago so you know the total km put on the vehicle(s) for 2018. If you didn’t, look at your service records to see if you can estimate what it was on January 1 2018.
Do you donate to Charity? Look at your bank and credit card statements for 2018 and see what charity donations you made. Keep track to make sure you get all the charity receipts.
Children’s fitness and arts activities can be claimed to reduce your Manitoba taxes, so make sure you have the receipts that clearly state the child’s name and the name of the organization and the activity.
Child in DayCare? Make sure you get the receipt(s) for all of your daycare expenses. If you use a private home daycare, the receipt should state the child’s name, the name and SIN of the individual providing the care, the amount paid for the year, and the name of the parent(s).
I’ve highlighted many receipts you need to claim tax deductions, credits or rebates on your 2018 taxes. But please remember to NEVER USE A HIGHLIGHTER on any of your receipts. When they are photocopied or scanned, they are often black. And over time, a highlighter may “erase” the numbers you highlighted…. I hate highlighters! They were good in school for books, but not good for today’s receipts!
I hope I have inspired you to take better care of your tax receipts so you get the best refund possible, or pay the least amount possible. It’s up to you to prove it to Canada Revenue Agency.
And for 2019, start your tax file or envelope today and keep better track of all your tax information so 2019 is even better than 2018!
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