It’s Tax Time!

Over the last 15 years, I have been preparing personal tax returns for a wide range of clients. Each year there are numerous tax changes implemented by the government, and this helps to keep the life of an accountant interesting! Whether you are an avid golfer anticipating your first tee-off, a fan awaiting the first pitch on opening day, or just tired of winter, spring is around the corner and this can only mean one thing……tax season is upon us! Below, I have highlighted some personal tax changes of which you should be aware.

The Family Caregiver Tax Credit takes effect in 2012. It is a 15% non-refundable tax credit of $2,000, which enhances certain existing dependant-related credits as opposed to being a stand-alone credit. Depending on each individual tax situation, this credit could potentially increase the following: infirm dependant credit, spousal or common-law partner credit, eligible dependant credit, child tax credit or caregiver credit. This credit can only be applied to one credit per eligible individual.

The Healthy Homes Renovation Tax Credit is also new for 2012 and was established to help seniors with the cost of permanent home modifications required to improve accessibility or assist with mobility and function in and around their home. The tax credit is 15% of a maximum of $10,000 in qualifying expenses, or $1,500. Qualifying expenses could be ramps, stair lifts, widening doorways, hand rails, lowering existing counters/cupboards, to name a few. Couples living together may only claim up to $10,000. Seniors who live with other family members may claim this credit on behalf of the household. For 2012, the qualifying period of expenditures is October 1, 2011 to December 31, 2012.

There have been other tax changes relating to bloodcoagulation monitors being added as an eligible medical expense, changes to rules governing Registered Disability Savings Plans (RDSP), and mineral exploration tax credit for flow-through share investors.

A non-refundable tax credit that is often overlooked is called the Disability Tax Credit (DTC). If you (or a family member) have a severe and prolonged impairment in physical (hearing, speaking, walking, elimination, feeding, or dressing) or mental functions, you may be eligible for this credit. A Disability Tax Credit Certificate (which can be downloaded from the Canada RevenueAgency (CRA) website) needs to be completed and certified by a qualifiedpractitioner and then submitted to CRA for approval. If approved, this credit can be transferred in whole or in part to a spouse or other supporting person.

For more information on these tax topics or any others, please contact your tax professional.

Nicole Hacock is the owner of Nicole Hacock CGA Professional Corporation, a full service firm providing accounting and tax services to small and medium sized companies and individuals in Waterloo Region and beyond. Our services include year-end preparation, financial statements, corporate and personal tax planning and preparation, bookkeeping and payroll. If you have any questions about our services, please contact us.