Be sure to use all your tax-savers

By:  Kian Ghanei, Vancouver

Don’t pay more taxes than absolutely necessary by taking advantage of all the federal tax credits available to you -- including a number of tax relief measures introduced recently that you should know about.

·         Basic personal tax credit – raised to $9,600.

·         Spousal/equivalent-to-spouse credit – for support of an eligible partner whose net income was less than $9,600.

·         Eligible dependent credit – for support of an eligible dependant whose net income was less than $9,600.

·         Caregiver credit – up to $4,019 for care to an infirm or elderly relative in your home.

·         Age credit – available to those over age 65 on a reducing basis up to an income level of $65,499. Transfer the unused portion to a supporting spouse.

·         Medical expenses credit – combine family expenses on the return of the lower-income spouse to generate a larger credit; or maximize this credit by choosing any 12-month period ending in the current taxation year for previously unclaimed expenses.

·         Disability credit – available to those suffering from a significant physical or mental impairment. Can transfer the unused portion to a supporting relative.

·         Tuition fees and education costs – unused credits can be transferred to a supporting parent or grandparent (to a maximum of $5,000).  Remember that all scholarship or bursary income received by a post-secondary student is now tax-free.

·         Textbook credit – fulltime students can claim $65 for each month of post-secondary enrolment; part-time students can claim $20 per month.

·         Children’s fitness credit – claim up to $500 per child against eligible fees for a physical activity program.

·         Public transit credit – claim the costs of certain public transit passes and electronic payment cards. [up to a maximum of what?]

·         Pension income credit – claim up to$2,000.

·         Universal child care benefit -- $100 per month for each child under 6 years of age;  income is taxed to the lower-income spouse

Other tax-reducing strategies

·         Company pension-plan contributions – your 2007 contributions may be deductible within limits.

·         Child-care – claim babysitting and other child-care expenses that allow you or your spouse to work or take a training course. Must be claimed by the lower-earning spouse.

·         Canada Pension Plan and Employment Insurance contributions.

·         Pension income splitting – you may be able to allocate up to half your qualified pension income to a lower-income spouse.

·         Dividend credit – for eligible dividends from public companies.

·         Charitable donation credit – claim previously unclaimed donations for a five-year period and pool contributions with your spouse to increase the amount that qualifies for a higher credit.

Trim your taxes by taking advantage of all your eligible credits and deductions (such as those allowed for Registered Retirement Savings Plan contributions).