That dreaded annual chore cannot be put off much longer. The April 30 deadline for filing 2012 income-tax returns is drawing near. If you haven't already done so, it's time to make some sense out of that file folder or manila envelope full of information slips and receipts.
If you delegate the task to a tax expert, you could just send everything off in a jumbled state. But if like many Canadians you do it yourself, you'll need to sort the various pieces of paper into neat piles before you fire up your tax-preparation software, or sharpen your pencils if you cling to the hard-copy method.
All this information has to find its way on to the appropriate places of your return. While good software and/or familiarity with the tax-return process make this challenge less daunting, many tax returns contain mistakes -- or at least result in adjustments by the Canada Revenue Agency during processing. The following are some of the areas of tax returns in which common adjustments are made by the CRA. Documents referred to can be accessed on the CRA website.
If you are filing online, remember to keep your supporting documents in case the CRA asks you to send them to support a claim.
Tuition and education amounts: The student must file Schedule 11, not the parent or grandparent who ultimately will claim the amounts. Only tuition for qualifying post-secondary credit courses is eligible, and claims must be supported by an official receipt from the educational institution. Such fees must be related to courses taken during the relevant calendar year (in this case, 2012), not the academic year. Do not include any fees reimbursed to you by the institution.
Regarding the education and textbook amount, you may claim only one amount for each eligible month, either the full-time amount or the part-time amount. Again, claims must be based on the calendar year, not the academic year.
Note that on line 319 of Schedule 1, only interest paid by you on a loan from a government post-secondary program can be claimed.
As for amounts transferred to a parent's or grandparent's tax return, the student must enter this amount on Schedule 11, and the recipient of the transferred amounts then reports this on Schedule 1. If the amounts are to be used by a spouse, they must be reported by that person on Schedule 2, as well as on the appropriate line of the tax return itself. Note that the maximum amount that can be transferred is $5,000.
Detailed information on how to claim tuition and education amounts is available in Pamphlet P105, Students and Income Tax.
Medical expenses:Generally, the only consumable health products that can be claimed as medical expenses are those prescribed by physicians. Amounts for vitamins, supplements or similar remedies are not deductible. The services of a wide range of health-care professionals can be deducted, such as dentists, chiropractors, naturopaths and registered massage therapists. Amounts claimed for services provided by a retirement or other old-age home must be identified as eligible services on the institution's receipts. For more information on medical expense claims, consult Guide RC4064 – Medical and Disability-Related Information .
Eligible dependant credit: You must complete Schedule 5 to claim this amount. Only one person may make the claim, and a child must be under age 18 at the end of the calendar year. In a child-custody situation, the parent who receives support payments is eligible to claim this amount. In a shared-custody situation, the parents must agree on who will make this claim. An amount claimed for a dependant over age 18 is considered a "caregiver amount" and that person must be dependent on you due to a physical or mental incapacity, or be at least age 65 if he or she is your or your spouse's or common-law partner's parent or grandparent. For details on dependant claims, consult Guide RC4064 - Medical and Disability-Related Information.
Amount for children born in 1995 or later: Only one parent may claim this amount, commonly referred to as the child tax credit. Only children who are under age 18 at the end of the calendar year and who live the whole year at home qualify a parent to make this claim. You still may claim children who are away during school terms or take a summer job elsewhere. If a child doesn't live with both parents throughout the year, the parent that claims the eligible-dependant amount for that child may claim the child tax credit. In cases of shared custody, the parents must decide who will make the claim; it cannot be split in two. For information on claiming support payments, refer to Guide P102 - Support Payments .
Public-transit amount: This deduction applies to monthly passes. However, you can claim the cost of passes for durations of at least five days each, providing these total 20 days out of a 28-day period.
RRSP deductions: When claiming a deduction for RRSP contributions made before Feb. 29, 2012, remember to file Schedule 7. You also must complete this schedule if some or all of a retiring allowance was transferred to your RRSP.
Union and professional dues: In some cases, an employer will report these amounts on a T4 slip and the dues-receiving organization may also issue you a receipt directly. Only report the amount recorded on your T4 slip. If the amount on a receipt is greater, you must provide the CRA with a letter itemizing and explaining the additional amount to be claimed. Any dues reimbursed to you by an employer or other party cannot be claimed on your return.
Moving expenses: These are eligible only if you moved at least 40 kilometres closer to a new place of work, and are deductible only from income earned at that new work location. Expenses reimbursed by an employer or other party are not eligible. Students who move at least 40 kilometres closer to a new place of study may deduct these expenses against taxable award income, such as scholarships or bursaries. Amounts that will not be accepted as deductible moving expenses include mail-forwarding costs, work done on your old home to make it more saleable, a loss on the sale of your old home, and expenses for house-hunting or job-hunting trips before you move. For more on moving expenses, consult Form T1-M – Moving Expenses .
Charitable donations: Make sure a particular donation can actually be claimed. You must have an official receipt from a registered charity. If you have any doubt as to an organization's status, consult the CRA's online directory .
