Happy New Year! Even when the days are short, we know that Spring is out there somewhere. By the end of April, we can rest assured that most of the snow will be gone, the sun will be spending more time in the sky, and that our taxes will be due! It really will be here sooner than you think, so circle April 30 on your calendar and get started now. Late filings can be costly, and who needs the added stress? Seniors often qualify for added tax benefits but, as they say, the early bird gets the worm!
Tax Credits to Consider
We’ve encountered several senior citizens who are reluctant to redeem certain tax credits. Still, others may be uninformed about which tax credits might be available to them. Be mindful that as you get older, you may be entitled to several bonuses that could streamline the tax filing process and make it easier on your wallet!
Qualifying for Tax Credits
There are several tax benefits available to seniors who have a disability or impairment. If, regardless of the therapy or treatments you receive, you are constantly limited by the effects of your disability, ask your doctor to complete the indicated portion of your T2201 tax form.
Certain conditions allow you to qualify for tax credits from the Canadian Revenue Agency including:
• Blindness
• Other visual, hearing, or mobility impairments that limit you from accomplishing basic tasks/activities.
• Life-sustaining therapies - such as insulin injections, certain physio-therapies, or dialysis.
Taxation of RRSP Withdraws
Seniors that consider withdrawing funds from their RRSP accounts must be mindful that doing so could result in a hefty bill after a tax return has been filed. To avoid this, be sure to opt into taxation from the very beginning when withdrawing that money. If tax is withheld from your RRSP accounts, it can make the tax season more strenuous than need be, so be sure to avoid costly fees.
Split Incomes
Income splitting is another method that can help seniors to lower their tax bills. Essentially, it permits partners (common-law partners or wedded couples) to share their incomes from pensions, which will result in them being filed at a lower tax margin. For this to work, the couple must be legally recognized as a couple in the year of taxation.
With your tax season managed, think of all the time you’ll have for planning your Summer vacation! For more information on tax tips for seniors, be sure to contact Assurance Home Care today!
