Nobody likes to think about tax time, but make sure you’re making the most out of your claims. Before you file, here are some things to know before filing your 2019 tax return.
Whether you plan on doing your taxes on your own this year or with the help of a professional, there are some important aspects to consider regarding 2019 tax returns. Because of COVID-19, personal tax returns won’t be due until June 1 of this year, which gives you plenty of time to organize before filing, so make sure to take the following elements into account when preparing.
Medical cannabis is considered eligible as a medical expense tax credit, which can include any money spent on cannabis or cannabis products such as CBD oil, seeds, or others. Taxpayers often overlook medical expenses, particularly the premiums they pay for health insurance plans. However, premiums and out-of-pocket expenses that an insurance company doesn’t reimburse are all eligible to claim on tax returns.
If you need to prepare tax returns for certain family members including spouses, it’s important to determine which members should claim credits or deductions. For example, the spouse who makes less income will need to claim child care expenses, while other costs such as the aforementioned medical expenses can be shared between both spouses.
In many cases, it’s more ideal for the spouse with the lower income level to claim medical expenses, seeing as the expenses need to reach a three-percent minimum of the individual’s net income to become eligible for claiming. Meanwhile, higher-income spouses can typically save more tax by claiming donations because of the tax savings on lowered provincial and federal surtaxes.
Individuals who are currently living together should keep in mind that they qualify as common-law spouses following 12 months of cohabitation. Subsequently, they will need to file taxes according to their status as common-law spouses.
Any retirees filing taxes should try to identify potential opportunities to divide eligible pension income. Such opportunities could include defined benefit (DB) pension income and Registered Retirement Income Fund (RRIF) withdrawals, which will help balance incomes and decrease the total amount of tax payable.
When filing 2019 tax returns for elderly family members, you may be able to benefit from certain tax credits such as the amount for an eligible dependent, disability tax credit, home accessibility expenses, attendant care and care in a facility, the Canada caregiver amount, or the disability supports deduction, all of which you can claim.
Taking all of these aspects into account when filing your 2019 tax return will help ensure you’re prepared this year.
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