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Tax Tips for Seniors
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The Canada Revenue Agency (CRA) wants to make sure that you are receiving the benefits and credits you are eligible for.
As a senior, here are some of the most common things that you could claim on your income tax and benefit return at tax time:
- Pension income splitting – As a pensioner, you may be eligible to split up to 50% of your eligible pension income with your spouse or common-law partner to reduce the amount of income tax you may have to pay, if your spouse or common-law partner is in a lower tax bracket. This may save you tax as a couple.
- Registered retirement savings plan deduction – Deductible contributions to your plan can reduce your tax owing. You have until December 31 of the year in which you turn 71 to contribute to your plan.
- Medical expenses – You may be able to claim eligible medical expenses you or your spouse or common-law partner paid in any 12-month period ending in 2017. This period is extended to 24 months in case of death.
- Age amount – If you were 65 years of age or older on December 31, 2017, and your net income was less than $84,597, you may be able to claim up to $7,225 on your return.
- Disability tax credit – If you, your spouse or common-law partner, or your dependant have a severe and prolonged impairment in physical or mental functions, you may be eligible for the disability tax credit. To apply for this credit, you must have Form T2201, Disability Tax Credit Certificate filled out and certified by a medical practitioner. Once the CRA approves your form, you can claim the disability amount on your return.
- Canada caregiver credit – This credit replaces the family caregiver credit, the credit for infirm dependants age 18 or older, and the caregiver credit. If you have a spouse or common-law partner or a dependant with an impairment in physical or mental functions, you may be able to claim this non-refundable tax credit.
- Pension income amount – You may be able to claim up to $2,000 if you reported eligible pension, superannuation, or annuity payments on your return.
Also, filing a tax return is the easiest way to access credit and benefit payments that may assist seniors, such as:
- Guaranteed income supplement – If you live on a low-income and receive the guaranteed income supplement or allowance benefits under the Old Age Security Program, you must file your taxes by April 30 to make sure your benefits get renewed.
- Goods and services tax / harmonized sales tax (GST/HST) credit – You may be eligible for tax-free quarterly payments that help individuals and families with low and modest income offset all or part of the GST or HST that they pay. If you have a spouse or common-law partner, only one of you can receive the credit. When you file your taxes, the CRA automatically determines your eligibility.
- Registered disability savings plan – This type of plan helps Canadians with disabilities and their families save for the long-term financial security of a person who is eligible for the disability tax credit. Contributions to such a plan are not tax deductible, but you can make them until the end of the year in which the beneficiary turns 59.
Source: Canada Revenue Agency