2010 Personal Tax Tips Canada

In this article, I reveal the Best 2010 Personal Tax Return Tips that Revenue Canada doesn’t want you to know.

Tip # 1: Contribute to your RRSP – 2010 Personal Tax Tips Canada

Make sure to contribute to your RRSP before the contribution deadline of March 1^st, 2011.

You save taxes by contributing to a RRSP’s because:

• RRSP contributions are tax deductible; and
• Any income earned inside a RRSP is completely tax-free.

Please look at your 2009 Notice of Assessment to determine the maximum amount that you can contribute for the 2010 taxation year (i.e. 2010 RRSP Limit).

Tip # 2: Organize your Tax Receipts – 2010 Personal Tax Tips Canada

Organize your tax receipts so that you don’t miss out on any tax deductions or tax credits. Common tax credits include:

• Amount for children under 18
• Amount for first time home buyers
• Caregiver amount
• Children’s sports or fitness activity programs
• Donations
• Interest paid on student loans
• Medical expenses
• Pension amount
• Political contributions
• Public transit passes
• Tuition, education and textbook amount

Tip # 3: File your 2010 personal tax return on time

For regular individuals the due date to 2010 file your personal tax return is April 30, 2011. For self employed individuals the due date to file your 2010 personal tax return is June 15, 2011.

If your tax return is filed late, the Canada Revenue Agency will levy a significant late-filing penalty. The penalty is calculated as 5 % of the balance owing on April 30, 2011, plus 1 % for each month that the return is past due (to a maximum of 12 %).

If you do not have all of your tax information by April 30^th and you know you will be filing late, then make an estimated tax payment by April 30^th. By doing so, the late-filing penalty assessed by the CRA will be $nil or a small amount.

Tip # 4: Claim Child Care Expenses – 2010 Personal Tax Tips Canada

Child care expenses are tax deductible and must be claimed on the lower income spouse’s tax return. Child care expenses include:

• Babysitting fees
• Salary paid to a Nanny
• PLASP fees
• Daycare
• After-school programs

For children born in 2004 and later, the maximum deductible amount for child care expenses is $7,000 per child. For children born between 1994 and 2003, the maximum deductible amount for child care expenses is $4,000 per child.

ABOUT THE AUTHOR

ALLAN MADAN

CPA, CA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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