Since Canada Revenue Agency opened on February 15 we have been busy filing tax returns for many individuals in the area. And clients are reporting they have been getting their refunds in their bank accounts in as little as 8 business days!
Remember if you are still missing some tax slips, we may be able to get them for you directly from Canada Revenue Agency so you don’t have to wait. Almost all t-slips are now available from CRA’s secure site.
I’d like to share a few items for the tax filers that will be coming in during the next eight weeks prior to the May 2filing deadline.
The first item I’ve been noticing is for families (those with children under 18). The tax refunds are much smaller than they were a year ago. Your refund could be as much as $600 less for each of your children under 18.
There are two reasons for this.
First, the enhanced Universal Child Care Benefit (UCCB) was introduced for 2015. Families with children aged six to 18 received $60 per month and the amount for children under age six was increased to $160 per month. All of this is taxable income for the spouse with the lower income. This will increase the taxes payable by that spouse, or the other spouse that normally claims the spousal amount will see a much lower tax refund for 2015.
The second reason for lower tax refunds is the elimination of the Children’s Credit (non-refundable credit for each child under age 18). This credit was about $2,300 in 2014 and saved $343 in taxes per child. This credit was eliminated for 2015 and is no longer available to claim.
Between the increased taxable income from the UCCB and the reduction of the Children’s Credit, it means smaller refunds for 2015.
It means you had increased cash flow during the year instead of waiting for the cash flow when you file your tax return. Just be prepared for the smaller refund!
Low income families who do not have taxes payable will likely not see any difference in their refunds.
The only good news is the Family Tax Cut remains for 2015. It was introduced for the 2014 tax year and helps families with the two parents in different tax brackets. But this will be the final year.
Another reminder for families is to keep all the receipts for the children’s activities (fitness and arts related). The Fitness Credit is now a refundable credit, so even low income families can benefit and get some of the expense refunded.
A reminder for all taxpayers: medical expenses. Go to your regular pharmacy (or more than one) and ask for a detailed printout for the entire 2015 year for all family members. That way, you do not need to keep those little receipts and you also make sure you have them all.
And make sure you keep every medical expense that you had to pay out of pocket.
That includes any premiums you may have paid directly from your bank account or deducted from your paycheque: be sure to keep your last paystub of 2015 so we can get that info. Sometimes the amount may be on your T4 (look for box 85 at the bottom to see if it is there), but usually it is not.
And if your plan covers 80%, we need to include the 20% that was not covered: eye exams, eyeglasses, dental, chiropractor, and more. Unfortunately, massage therapy cannot be claimed by Manitoba taxpayers (call your MLA on that one!). One expense that is often missed is Laser Eye Surgery. If you forgot to claim it in the past 10 years we can make an adjustment.
Remember to keep record of all your medical trips that were 40km or more one way to see a medical professional that does not exist in your local area. For those of us in the rural it’s often into Winnipeg to see a specialist.
If you have to travel more than 80km one way you get to claim the 47 cents per km plus parking plus a meal ($17). And if you needed to stay overnight, you can claim the accommodation too.
There are many people that cannot use their medical expenses on their taxes. Many seniors and others without employment income and do not have taxes payable cannot claim the medical expenses. It’s a non-refundable tax credit, so if you have no taxes payable, it can’t be reduce beyond zero.
But if you do have some employment or self-employment income of at least $3,000, you may be eligible for the refundable medical expense rebate (for low income employed taxpayers with medical expenses).
And finally one last tip. If you have been receiving your tax refund and GST credits by cheque, you won’t anymore. CRA is insisting to pay everything by direct deposit. So remember to bring a void cheque or your banking information (bank number, branch number, account number) with you when you get your taxes completed.
Anni Markmann Personal Income Tax Professional and Certified Financial Planner; living, working, and volunteering in our community. Contact her at 204.422.6631 or 36 Dawson Road in Ste Anne (near Co-op) or Info@SteAnneTaxService.ca.