Tax Tips

The personal tax filing deadline is April 30. Self-employed individuals have until June 15 to file, but any taxes owing must still be paid by April 30 to avoid interest charges.

Even if you can’t pay your full tax bill, always file on time. The late-filing penalty is 5% of taxes owing plus 1% for each additional month late. Filing on time avoids this penalty entirely.

Donation receipts must be issued by a registered charity with a CRA registration number. Gifts of services are not eligible — only cash or property donations qualify.

If you provide in-home care for a parent, grandparent (65+), or a dependent family member with a physical or mental infirmity, you may be eligible for the Caregiver Tax Credit.

Eligible adoption expenses include agency fees, court and legal costs, travel expenses, document translation fees, and mandatory fees paid to foreign institutions.

If you earn rental income, you can deduct property tax, insurance, maintenance and repairs, utilities, advertising costs, and interest on money borrowed to purchase or improve the property.

Lump sum payments relating to prior years — such as child/spousal support, back wages, or pension benefits — may qualify for special tax relief. Ask us about your situation.

Capital gains or losses are generally the difference between what you received for a property and its adjusted cost base, plus any selling costs like brokerage commissions and legal fees.

Dividends paid to you by a corporation on shares must be included on your personal tax return. A dividend tax credit is available to reduce the tax impact.

Business tax returns are due by June 15 of the following year. However, any taxes owing must be paid by April 30 to avoid interest charges.

To claim a home office deduction, the space must be your principal place of business, used exclusively for earning income, and used regularly for meeting clients or customers.

Wages paid to a spouse, common-law partner, or child for work performed in your business are deductible as a business expense — as long as the wages are reasonable for the work done.

Club dues for recreational, dining, or sports clubs are not deductible. However, if meals are consumed at such a club for business purposes, 50% of the meal cost may be deducted.

You can deduct expenses for up to 2 conventions per year, provided the convention is held by a business or professional organization and you attended for business purposes.

Assets used for both business and personal purposes can only be depreciated based on the proportion of business use. For example, an asset used 50% for business can only be depreciated on 50% of its cost.

Accrued wages are only deductible if they are paid within 180 days of the business’s fiscal year end. Wages not paid within this timeframe cannot be claimed as a deduction.

Self-employed individuals may be able to deduct health and dental premiums paid to private insurance plans if more than 50% of their income comes from self-employment.

Retained earnings represent the accumulated profits and losses of your business over time. They appear on your balance sheet and are an important indicator of your company’s financial health.

If you voluntarily tell the CRA about unreported income or incorrect filings, they may waive the late payment penalty. You would only owe the taxes plus interest — not the penalty.

In the year of death, a tax return is completed to the date of death. Any income received after death must be reported for the estate on a T3 Trust Income Tax Return.

In the year of declaring bankruptcy, two tax returns are prepared — one covering January 1 to the date of bankruptcy, and a second covering from the day after bankruptcy to December 31.

If farming is not your primary source of income, your farm loss deductions are restricted. The maximum deductible farm loss is currently $17,500 per year.