One of the best ways to save money and ensure you’re receiving the full amount from government support programs is by optimizing your income tax returns.
The good news when you file this year’s return, says Gerry Vittoratos, a tax specialist at U-File, is that two previously announced tax obligations no longer apply. The controversial capital gains tax increase and the confusing bare trust reporting rules have been put on hold for the 2024 filing year, and maybe for good.
“At the end of the day, there was no bill including the capital gains tax or the bare trusts that received royal assent,” says Vittoratos. “So the government announced that they will delay that obligation until the 2025 filing year.”
Neither of these measures were popular when they were first announced. The capital gains tax in particular had become a very hot political potato for both the Liberal government and the opposition Conservatives. That’s because the proposed new rules would have increased the inclusion rate from one-half to two-thirds on capital gains above $250,000 for individuals, and on all capital gains earned by corporations and trusts.
This proposal had been a source of great irritation for older Canadians, especially those who were planning to sell a vacation home or a small business, or were planning to cash in on some investments.
Conservative leader Pierre Poilievre has frequently voiced his criticisms of the capital gains tax, saying he would get rid of if if he became prime minister. And as prime minister-designate Mark Carney and former finance minister Chrystia Freeland (the latter of whom introduced the measure) promised they would scrap the increase if they become leader, its fate may be sealed for good.
Besides the drama over these two measures, Vittoratos says that there have been no changes for seniors for the 2024 filing year. He also offers these tips to help you maximize your return. (For complete information on whether you qualify for these credits and how much you can claim, consult the CRA website.)
File Your Taxes Even if you don’t have any income to report, it’s important to file your taxes on time. That’s because many important seniors benefits are unlocked when the government receives your completed tax form. These include: GST/HST Credit, Age Amount Credit, Climate Action Incentive, Old Age Security (OAS), Guaranteed Income Supplement (GIS), and the survivor’s allowance for people aged 60-64.
GST/HST Credit People with low or modest income may qualify for this credit to offset some of their GST/HST expenditures. Your spouse or common-law partner must also file taxes so the CRA can calculate household payments. When you submit your taxes, the CRA will automatically determine your eligibility.
Medical Expenses Medical bills add up, and claiming these expenses on your tax return will help you claw back some of that money. There’s a wide range of products, procedures and services that qualify for this non-refundable tax credit, such as medical supplies, dental care and travel expenses.
Caregiver Tax Credit If you support a spouse, common-law partner or a dependent over the age of 18 with a physical or mental impairment, you may qualify for the Canada Caregiver credit.
Disability Tax Credit This non-refundable tax credit allows people with disabilities (or those who support them) to reduce the amount of income tax they may have to pay.
Home Accessibility Tax Credit To qualify for this credit, you must be 65 or older (or eligible for the DTC) and own your own home in Canada. If you’ve made upgrades to improve the safety or accessibility of your living space, you may be able to make a claim.
Pension Income Splitting If you are receiving payments from your pension plan and meet certain requirements, you may be able to transfer up to half of your eligible pension income to a spouse or common-law partner, thus reducing your tax owing.
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