Many people who have straight-forward and basic tax returns to complete can certainly do their own taxes or may have them done by a family or friend. How

ever, there may be times when you might want to see a tax professional to have your taxes completed fully and accurately.

There are some trigger questions or events that get me asking clients more questions.

Pension Income Splitting: Most of the time the ideal split is the full 50% allowed, but not always. Sometimes it’s only $1000 or $2000, just enough for the other spouse to claim the pension income amounts. I recently had new clients attend my office. They had been using a specific amount of the pension split. He thought that was the ideal amount. I showed him the difference between the amount he thought was ideal and what I suggested: a difference of hundreds of dollars. I asked if I could review the past few years to see if we could save more money for them. He agreed and we will review the past three years (the most we can go back).

Severance Payment: Often when clients retire from their job, they receive a severance or retirement allowance. Some of it can be “eligible” and some of it is “non-eligible”. Often clients will see me before they retire to find out what they can do with the amount (transfer tax deferred to RRSPs). If not done properly, it can cause some tax pain. I had one individual who thought he could do everything himself. Unfortunately a year later after everything had been done, there was nothing I could do except confirm that Canada Revenue Agency was correct, and he did not transfer the full amount to the RRSP that he thought he could and he owed about $10,000 to CRA.

EI and Tuition. Sometimes you can get your education paid for by Employment Insurance (EI). When this happens, there are three slips I’m looking for: the tuition receipt from Red River College or other school, and two EI slips: one that pays for the education and one that paid you while going to school. Often one is missed. Just this week, a client thought she had everything, but I pointed out she is missing one T4E from EI. She will need to go on the Service Canada website and get it on line (often they are not mailed out). So if we had filed her taxes without it, she would have been surprised to find her expected refund was a lot lower after CRA corrected it for the missing EI.

Student Tuition: I like to review past taxes to ensure the full education and textbook credits were claimed properly (sometimes they are not). And the next question is when did or when will you graduate? In Manitoba we have the Graduate’s Tuition Income Tax Rebate. We get to claim each year up to10% of the tuition paid for the graduating degree, diploma, or certificate. It depends on how much Manitoba tax is paid. But students have up to 20 years to claim the full 60%. I find this has often been missed in the past. If you or someone you know has graduated after 2006, they may want another opinion to see if it has been claimed properly.

Medical Travel: Often people who move from Winnipeg to the rural, or have Winnipeg tax pros completing their taxes can miss the travelling expenses to attend medical appointments that are more than 40km from their home (and a service they cannot get locally, often specialists in Winnipeg or Winkler). Many times we have gone back several years to make adjustments and get some tax refunds (as long as you have kept good records of your medical appointments… keep all your calendars that keep track of appointments)

Disability Tax Credit: If you have an impairment that affects your day to day activities, you may qualify. The most common reason is for hip or knee replacements. Almost all individuals that have a joint replaced qualify because it affects their ability to walk. There are other impairments that qualify too: hearing, diabetes (regular testing and calibrating meds), mental function (ADHD, depression, autism, dementia), dressing (arthritis). We can and have gone back up to 10 years to adjust taxes. Even if you have no taxes payable (lower income), you still get the $110 yearly Manitoba credit.

Manitoba Caregiver Tax Credit: If you are helping older parents or other family members, the Manitoba Primary Caregiver Tax Credit began with the 2009 tax year and we can go back up to three years. If you are assisting a family member (spouse, parent) or a neighbour or friend, you may qualify for the $1275 refundable credit (not income tested). Moving: If you are you moving from rental to own home or home to home, the Education Tax Credit sometimes doesn’t get claimed properly. Most of us home owners get the $700 credit on our property taxes, but if you change from a renter to homeowner, make sure you claim the full or the prorated amount. If you are moving from one home to another, make sure you know if the new home had the education credit too. Again, you may need to get it prorated on your income tax.

Purchasing New Home: remember to claim the New Home Buyer amount if you (or your spouse) haven’t owned a home in the past few years; the credit is $5000, and worth additional refund of $750.

Selling Property: Capital gains are often missed (just because you gave it to a family member, doesn’t mean you avoid taxes). Generally if you have profited by disposing of something, you have taxes to be paid. It can be the selling (or giving) of shares or non-registered investments, vacant land, farmland, rental property, family cottages or other assets. This is the time to talk to a tax pro to make sure you claim it correctly. Canada Revenue Agency knows when you sell something: it gets info from investment firms on all shares you sell. And any time property changes hands, it’s registered at Manitoba Land Titles. So you may not get “caught” for a few years. But avoid surprises in the future and claim all capital gains the year they happen.

Death of a Family Member: I have seen mistakes made when claiming the CPP death benefit. The amount you receive from Canada Pension Plan (up to $2500) is not claimed on the taxes of the individual who passed. It must be claimed on the Estate tax return or one or more beneficiary’s tax return. And when someone passes away, that’s when they are considered to have disposed of everything they own. Large tax bills occur because of RRSPs, RRIFs, disposing of all shares. Get some professional help when a loved one dies.

Notice of Assessment and Notice of ReAssessment: Always look at the Notices you get from CRA after you file your taxes. I look for commentary about something that wasn’t claimed properly or advising you of carry forward items (tuition, capital losses). Take a good look at a Notice of ReAssessment (received 6-12 months after you have filed). If it’s because you forgot a tax slip, make sure it doesn’t happen again, or you can face some hefty penalties. That can be one benefit of a tax pro: we often compare current and previous years to make sure we are not missing anything. That’s when we can help avoid tax surprises.

The above are many reasons why a tax professional can be worth paying for. Many of us are quite affordable and likely worth more in the tax savings you will get (or help avoid that tax headache you may have).

One more month for the majority of personal income tax returns to be filed. April 30 is the tax deadline to file your taxes if you owe money. Avoid the penalty and file even if you cannot afford to pay it. The penalty is 5% of the taxes you owe and continues at 1% every month you delay filing. Interest only if you file but do not pay.

If you are expecting a refund, you can wait up to three years, but why would you?

If you are self employed (or your spouse is), you have until June 15 to file without penalty. Of course if you owe, the interest starts accumulating May 1. Personally, I cannot get my taxes filed by April 30. Too busy looking after all of you! So I normally send them some money by April 30 to reduce the interest costs, and then get it filed by June 15.

Anni Markmann is a Tax Professional, a Certified Financial Planner, and a Certified Professional Consultant on Aging living, working, and volunteering in our community. Contact her at 204.422.6631, or 36 Dawson Road in Ste Anne.