Personal Tax Tips by Accountant in Milton

1. Home Renovation Tax Credit

The Home Renovation Tax Credit is available to all Canadians that spent money on renovating their home between January 27, 2009 and February 1, 2010. This one-time tax credit can be claimed on your 2009 personal tax return.

The credit is calculated as 15% your home renovation costs, less $1,000, to a maximum of $10,000 of renovation costs.

For example, if you spent $9,000 on renovating your home, then the Home Renovation Tax Credit would be $1,200 (i.e. ($9,000 – $1,000) x 15%).

As an Accountant in Milton, I would be pleased to discuss whether your home renovation expenses qualify for the Home Renovation Tax Credit.

2. Medical Expenses, by Accountant in Milton

A tax credit is available for medical expenses incurred by yourself or your spouse and for dependent children.

Medical expenses eligible for the tax credit include costs for prescription drugs, certain fees paid to Medical Doctors, Dentists, costs for prescription eye glasses, costs for certain medical devices, etc. For a complete list of eligible medical expenses, please see Medical Expenses

The tax credit is calculated as 15% of the medical expenses paid in 2009, minus the lesser of:

• 3% of your 2009 net income; or
• $2,011

While either spouse can claim the medical expense tax credit, it’s better for the lower income spouse to claim it in order to maximize the amount of the credit.

3. Children’s Fitness Amount, by Accountant in Milton

You can claim a tax credit, known as the Children’s Fitness Amount, on amounts spent by you or your spouse for your children’s physical activity programs. The maximum amount that is eligible for the tax credit is $500 per child.

To find out if a program that your child is currently enrolled in, which involves physical activity, you should speak with the program’s coordinator.

You are required to keep receipts in order to claim the Children’s Fitness Amount.

You should speak with your Milton Accountant about the Children’s Fitness Amount.

4. Tax Return Preparation Fees

You can deduct tax return preparation fees on your personal tax return. The fees paid to your accountant to prepare your tax returns are deductible to the extent that you have earned income from investment (e.g. interest, dividends, other investment income), or from the business or rental income that you earned in the year.

You should check your personal tax return to see if your accountant in Milton has deducted his/her tax return preparation fees on your return.

5. TFSA

As an Accountant in Milton, I have recommended a Tax Free Savings Account to many of my clients, as a tax efficient investment strategy.

The tax free savings account is exactly what it sounds like. Any income or capital gains earned by your investments, which are inside a TFSA, are not taxable. The maximum amount that can be contributed to a TFSA per year is $5,000.

If you have not utilized a TFSA in previous years, the unused room of $5,000 for each year can be carried forward to the current year.

Any amounts withdrawn from a TFSA are not taxable. However, any contributions made to a TFSA are not tax deductible.

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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