By CTV News |
The holidays are over and it’s time to get serious about your money and your budget. But before you roll out your New Year’s resolutions about money matters,you might want to take care of last year.
The April 30 tax filing deadline may seem a long way off, but leaving it to the last minute could mean rushing and missing out on deductions or making a mistake that could mean a costly audit.
Tax specialist Ryan Halfnights, with D&H Group in Vancouver, says now is a good time to prepare.
“So when April comes along and it’s time to file, it’s less painful,” he said.
You can expect a few changes for 2018. They include:
- The $500 B.C. child fitness tax credit is gone
- The public transit tax credit is eliminated
- Income tax reduction 1.5-per-cent for middle income earners ($47,630 to $95,259)
For many tax filers, using DIY tax software is just fine, as long as their returns are not complicated.
“It’s all about organization,” Halfnights pointed out, “So if CRA (Canada Revenue Agency) comes calling, it’s kind of an easier less painful process.”
People with more complicated returns might want to consider hiring a tax accountant. That could include anyone who fits into one of the following categories:
- High net worth individuals
- People who have a side business
- Own investment property
- Self-directing retirement
- Got an inquiry from Canada Revenue Agency
Don’t be afraid to claim legitimate expenses. Halfnights says many taxpayers are not aware that they can claim unreimbursed employment expenses like the use of an automobile.
Also, medical expenses can sometimes be ignored. But first you have to meet a threshold. Only the amount above the lesser of either $2,237 or three per cent of your income can be claimed. For example, if your net income is $50,000, the first $1,500 won’t count toward a credit. But if your expenses total $2,000, $500 will be applied to your bottom line. CRA has published a list of allowable medical expenses.
Now the big question – what will trigger an audit? Halfnights says typically, large fluctuating items raise red flags. The three most common items are:
- Donations
- Medical receipts
- Child care expenses