Written by: Gwyneth James MBA CPA, CGA, Senior Partner
Another year, another tax season. And as with most tax seasons, there are a few changes to be aware of.
This year the change that has caused the most attention – and misinformation – is the declaration of the sale of your principal residence. NO, the tax exempt status of capital gains on your home has not changed. However, starting with sales in 2016, you must report that you sold it and the sale price. This also applies if you changed its use, for example, if you moved out and turned your house into a rental property.
The federal government has introduced a new Home Accessibility Expense Credit which replaces the version Ontario has had for the past 5 years and expands it to include any individual who qualifies for the Disability Tax Credit (in addition to anyone age 65 or older). Certain renovations, up to a maximum of $10,000, will result in a non-refundable tax credit of 15%. If the renovations also qualify for a Medical Expense Tax Credit you are allowed to receive both credits!
Many people engage a professional to prepare their tax return assuming that will ensure nothing is missed, but even the pros can only work with what information they are given and there is a limit to the number of questions they will ask. Here are some areas that frequently get missed:
- “Medical Expenses” includes such things as dental costs, hearing aid batteries, and travel health insurance
- There’s a tax credit if you pay for a monthly bus pass. It’s more common in larger centres so often gets overlooked here in Peterborough.
- If you moved 40 km closer to your employer or to start a small business, that’s a deductible expense.
- If you are receiving pension or RRIF income it can be split with your spouse and will often result in tax savings. You need to complete and sign a special election form.