With the end of the calendar year approaching, now is the time to consider your various year-end tax planning options! Last month, we looked at two upcoming tax changes for 2014 and their impact on 2013 year-end tax planning. This month, we’ll look at a number of general year-end tax planning tips.
Before the end of 2013, you should make certain payments and obtain your receipts so that you can claim all of the tax credits and deductions to which you are entitled for 2013. In particular, consider the following:
- Medical expenses for you, your spouse or common-law partner, minor children, as well as amounts paid by you or your spouse or common-law partner for another dependent. For 2013, the amount of medical expenses that will qualify for the federal medical expense credit is equal to 15% of eligible expenses which exceed the lesser of $2,152 or 3% of the claimant’s net income. Medical expenses that you pay for another dependant (who is not a minor child) are restricted based on that dependant’s net income.
- Physical fitness costs paid for your children under 16 years of age (under 18 years for disabled children). The maximum federal credit that can be claimed is equal to 15% of $500 of eligible expenses (up to $1,000 for disabled children).
- Registration costs paid for artistic, cultural, recreational or development activities for your children under 16 years of age (under 18 years for disabled children). The maximum federal credit for the children’s arts credit is the same as for the fitness credit.
- Public transit costs incurred by you, your spouse or your minor children. In general, eligible costs include the cost of public transit passes valid for at least 28 days.
- Investment costs including safety deposit box rental fees, and interest and brokers’ fees.
- Eligible moving expenses, provided that the move was made within Canada and was made in order to start work or carry on a business in a new location. Your new residence must be at least 40 kilometres closer to your new work location in order to claim these expenses.
- Eligible tuition fees and interest on student loans.
- Charitable and political donations.
Note that applicable provincial credits, where available, vary by province. For additional year-end tax planning tips, please view our 2013 Year-end tax planning guide.
December 9, 2013