Tax Tips for 2013 Taxes
You have less than one month to arrange your affairs (legally) to minimize your 2013 taxes payable. The only tax planning that you can delay up to March 1 2014 is the RRSP contribution.
2013 is the final year you can adjust your 2003 taxes. What could you possibly want to adjust? First if you had a disability at that time, you don't have much time to get the doctor to complete the Disability Tax Credit form and get it into CRA to have your 2003 taxes adjusted. And did you have any capital losses that year (investments) that you did not claim? CRA does allow us to adjust our taxes up to 10 years back.
RESP: Registered Education Savings Plans do not provide a tax savings on your 2013 taxes, but they can help pay for education in the future. The deadline is December 31 each year. There are some very good (20% or more) government grant incentives to encourage you to save. And remember there is the RESP Bond available to those with low income and all you need to do is open a plan and apply for the grant; no contribution required. RESPs are best for children under 16 years of age if you don't have one already.
RDSP: Registered Disability Savings Plans also do not provide tax savings, but depending on the family or individual's income, there are some very substantial grants available to those under age 50. The deadline is December 31 each year.
Remember to gather the receipts for all of your children's activities that may qualify for the Fitness Credit and/or Arts Credit for 2013.
Last month I wrote about the First-Time Donor's Super Credit (visit annimarkmann.ca to see it again). If you did not donate in 2008 to 2012 (inclusive for you and your spouse), then you get some fabulous credits for donations up to $1000. You can get back about two-thirds of what you donated! This Super Credit is in place until 2017, so if not this year, maybe next year?
Do you already have a lot of medical expenses this year (out of pocket) that you may be including on your 2013 taxes to reduce your taxes payable? Maybe add to them with dental appointments and eye exams and eyewear (zennioptical.com?) before December 31 so you increase your medical expense claim (remember you get about 26% back on the amount over 3% of your net income; come and see me or call me to help with the calculation).
And remember to keep the 2013 calendar that has all your medical appointments listed! You'll need that if you want to claim the medical travel (for trips more than 40km for medical services you cannot get locally).
Are you self-employed? Top up some of your expenses, or purchase some assets you might otherwise buy in 2014; may as well claim them on your 2013 taxes if it will help reduce your taxes payable! And remember to record the odometer on all vehicles you used for 2013 business income. You need to know how many km you drove for the entire year for both business and personal to determine the percentage of business vehicle expenses you will be claiming. If you cannot prove this during an audit, all your vehicle expenses may be disallowed by CRA!
Claiming home office costs? Remember that self employed can claim a percentage of all the home costs if you operate out of home. Commissioned sales people can only claim utilities, maintenance and repairs, rent, insurance, and property taxes. Employees working out of home who do not earn a commission can only claim utilities, maintenance and repairs and rent.
Anni Markmann is a tax professional and owner of Ste Anne Tax Service, working, living, and volunteering in our community. Contact Anni at 204-422-6631 or firstname.lastname@example.org or 36 Dawson Road in Ste Anne.