You will probably be surprised to see the long list of allowable medical expenses in Canada Revenue Agency. Here are just five that may have never crossed your mind

• Air conditioner – $1,000 or 50% of the amount paid for the air conditioner, whichever is less, for a person with a severe chronic ailment, disease, or disorder – prescription required.
• Bathroom aids to help a person get in or out of a bathtub or shower or to get on or off a toilet – prescription required.
• Certificates – the amount paid to a medical practitioner for completing and providing additional information in regard to Form T2201 and other certificates.
• Orthopaedic shoes, boots, and inserts – prescription required.
• Premiums paid to private health services plans including medical, dental, and hospitalization plans.

Which medical expenses are not eligible?

The expenses you cannot claim include the following:

• athletic or fitness club fees;
• birth control devices (non-prescription);
• blood pressure monitors;
• cosmetic surgery – expenses for purely cosmetic procedures including any related services and other expenses such as travel, incurred after March 4, 2010, cannot be claimed as medical expenses.
• diaper services;
• health plan premiums paid by an employer and not included in your income;
• health programs;
• organic food;
• over-the-counter medications, vitamins, and supplements, even if prescribed by a medical practitioner;
• personal response systems such as Lifeline and Health Line Services;
• Ontario Health Insurance Plan

Refundable medical expense credits

If you have business or employment income of at least $3,363 in 2014, you may be able to claim a refundable medical expense supplement. The refundable credit is 25% of medical expenses, up to maximum $1,142. It’s reduced by 5% of your family income in excess of a specified amount. This credit is in addition to the tax credit for medical expenses.

How to claim your medical expenses

You can claim on line 330 the total eligible medical expenses for yourself, your spouse and your child under age of 18.

If you support other dependents such as your adult child, grandchild, parents, grandparents, brothers, sisters, aunts, uncles and nieces who were residents of Canada, and you pay for their medical expenses, you can claim this amount on line 331.

Since the allowable medical expense has to first be reduced by 3 per cent of net income, it is generally better for the lower income spouse to claim the whole family’s medical expense tax credit.

Child tax credits you can claim on your tax return include child amount, children’s fitness amount, children’s art amount and Ontario Refundable Children’s Activity Tax Credit. You can also claim your child care expense tax deduction, which is not tax credit.

Federal child tax credit is calculated using the lowest tax rate 15% multiple the amount you pay. For example, if you spend $500 on your child fitness expense, the tax credit you get is $75 ($500×15%). You save $75 on tax if you spend $500 on your child fitness expense.

Children’s fitness amount

In your 2014 tax return, the maximum children’s fitness amount increases from $500 to $1000. In your 2015 tax return, the credit will become refundable, meaning if your income is too low to pay tax, you can still receive the credit.

Your child must have been under 16 years of age or under 18 years of age if eligible for the disability amount at the beginning of the year in which an eligible fitness expense was paid.

To qualify for this amount, a program must:

• be ongoing (last at least eight consecutive weeks or, in the case of children’s camps, five consecutive days);
• be supervised;
• be suitable for children; and
• require significant physical activity.

Children’s arts amount

You can claim to a maximum of $500 per child the fees paid relating to the cost of registration or membership for your child in a program of artistic, cultural, recreational, or developmental activity.

Child Amount

You can claim this amount for each of your children who are under 18 years of age at the end of the year.

Ontario Refundable Children’s Activity Tax Credit

For 2014 you can claim up to $541 in eligible expenses and get up to $54.10 back for each child under 16. You can get up to $108.20 back for a child with a disability who is under 18.

You apply for the credit by completing form ON479, which is part of your personal income tax and benefit return.

Ontario child tax credits are refundable, meaning you can get the credits even you don’t pay tax.

Completing your tax return

All your federal child tax credits are claimed on schedule 1. Line 365 is your child fitness amount, line 367 is child amount, line 370 is chile art amount.

Every year, Canada Revenue Agency (CRA) will improve tax relief measures and online services. Below is latest news from CRA for your 2014 income tax return.

• Children’s fitness amount – the maximum amount of eligible fees for each child has increased from $500 to $1,000.
• Search and rescue volunteer amount – As a search and rescue volunteer, you may be able to claim an amount of $3,000.
• Family Tax Cut – A proposed non-refundable tax credit of up to $2,000 is available to eligible couples with children under the age of 18, and is effective starting with the 2014 tax year.
• Universal Child Care Benefit (UCCB) – Under proposed changes, this benefit is being increased for children under age six. Effective January 1, 2015, parents will be eligible for a benefit of $160 per month for each eligible child under the age of six – up from $100 per month. Under proposed changes to expand the UCCB, parents may also receive a benefit of $60 per month for eligible children ages six through 17. Payments of the additional amount and expanded amount will start in July of 2015.
• Emergency services volunteers – Rules for the $1,000 exemption for emergency services have changed.
• Adoption expenses – The maximum amount of eligible expenses for each child has been increased to $15,000.
• Medical expenses – Amounts paid as salary for designing of personalized therapy plans for persons eligible to claim the disability tax credit and costs for service animals used to help manage severe diabetes, are now eligible as medical expenses.
• Investment tax credit – Eligibility for the mineral exploration tax credit has been extended to flow-through share agreements entered into before April 2015.
• GST/HST credit – You no longer have to apply for the goods and services tax/harmonized sales tax (GST/HST) credit. When you file your return, the Canada Revenue Agency (CRA) will determine your eligibility and will advise those who are eligible to receive the credit. If you have a spouse or common-law partner, only one of you can receive the credit. The credit will be paid to the person whose return is assessed first. The amount will be the same, regardless of who (in the couple) receives it.
• Online mail – When you register for online mail, you’ll have instant access to your tax records anytime, anywhere. Choose to receive an email notification that your notice of assessment or reassessment is available online. Provide us with an email address on your 2014 income tax return or register directly online starting February 2015 atwww.cra.gc.ca/myaccount.
• Mobile application: In February 2015, the CRA will be launching a mobile app for individual taxpayers.

CRA online services make filing your 2014 income tax return easier and getting your refund faster

The CRA’s online services are fast, easy, and secure. You can use them to file your income tax and benefit return, make a payment, track your refund, receive your notice of assessment, and more. Did you know that the Government of Canada is switching to direct deposit for all payments that it issues? This includes your tax refund and benefit payments. Sign up for direct deposit today! For more information, go to www.cra.gc.ca/getready.

Every year, Canada Revenue Agency makes tax indexation adjustment according to the inflation rates reported by Statistics Canada. Increases to amounts relating to non-refundable credits, and most other amounts will take effect on January 1, 2015. However, Canada child tax benfit, including the national child benefit supplement and child disability benefit, and GST/HST credits will take effect on July 1, 2015.

Your 2014 tax return will be calculated based on 2014 tax indexation adjustment data. Your child tax benefits and GST/HST will increase according to the Tax indexation Adjustment table below.

The following chart compares the indexed amounts for the 2014 and 2015 tax years. It reflects an indexation increase of 1.7% for 2015.

Tax season is coming. Like it or not, you have to get your tax done. Follow these five steps in your income tax preparation will make your life easier.

1. Plan ahead to save your tax.

Tax is a fact of life. To minimize your tax burden and maximize your tax refund, you should not wait until the last day to start thinking about your taxes. By planning earlier, you can

• Optimize your RRSP contribution before the RRSP March 1 deadline. Use our RRSP Tax Saving Calculator to estimate your saving.
• Pay yourself an appropriate amount of dividends to minimize your tax, if you are a business owner. To do that, you have to file a T5 tax slip to CRA before the end of February.
• Check year-end tax planning tips to save your tax.

2. Make sure you have all tax slips.

To make sure your income tax preparation will be done correctly, you should gather all your tax slips. If you miss one of them, CRA will find it out sooner or later. Then you have to pay your tax refund back plus interest. Some of these tax slips includes:

• T4 if you are employed
• T4A if you are subcontractor, earning self-employed commission
• T4A(P) for Canada Pension Plan Benefits (CPP) income
• T4A(OAS) tax slips for old age security income
• T5 for investment income
• T4RSP if you withdraw money from your RRSP

You can call Canada Revenue Agency (CRA) toll-free phone number to ask CRA to send your tax information, or you can use CRA my account service to access your account information online.

3. Gather all receipts for your tax credits and tax deduction.

While doing your income tax preparation, you don’t want to miss any tax credits and tax deductions you are eligible for. You can use our Income Tax Preparation Checklist to help your organize your tax receipts.

4. Make a summary sheet for your tax receipts.

If you have less than 5 tax receipts, you may not need a summary sheet. However, if you have many receipts, especially if you have a business, rental property, or moving expense, you should sort those receipts into categories and make a summary. No matter you hire a tax professional or do it yourself, not being organized is always a guaranteed way to screw up your income tax preparation.

5. Decide if you need tax preparation help.

If your tax return is fairly simple and you know how to do it, you can prepare it yourself using one of the many software programs available. You will need a certified tax program, which is listed on CRA website.

If your tax is complicated or you just don’t like to do it, you can pay a tax professional to do your income tax preparation. Here are a few points to keep in mind when you hire someone to prepare your return:

• Check the person’s qualifications. All qualified tax Efile providers have to register with CRA. You can use To CRA “postal code search” to verify the tax professional qualification.
• Find out about the service fees. Avoid tax preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers.
• Make sure the tax preparer is accessible. Make sure you will be able to contact the tax preparer after the return has been filed. Also make sure you will get year-round tax support if you wind up being reviewed by the CRA.
• Find a tax preparer you like to work with. If you prefer to work with a human rather than a machine, you should find a tax preparer, who will listen to you, talk with you and help you. A good tax preparer makes your tax season a breeze.

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There are three major ways to file tax returns, including Efile, Netfile and paper mailing. Each way has its advantages and disadvantages.

1. Efile

EFile is the internet-based filing system used by tax professionals who prepare tax returns for a living. To locate an efiling provider, try CRA “postal code search”.

According to Canada Revenue Agency (CRA), more than 28 million tax returns were sent in 2014. 53% of these returns were Efiled.

Advantages of Efile your return

• Faster refunds – Since Efile cuts out several manual steps, CRA can process most electronic returns in about two weeks.
• Improved accuracy – Before CRA accept a return for processing, they perform a series of computer checks and balances. This results in greater accuracy.
• Paperless – There are no paper returns to file and, unless CRA ask for receipts, none are needed. With few exceptions, Efile is an environmentally friendly, paperless system.
• Ease of mind – You have a professional prepare and file tax returns for you.
• Ease of payment – You can file tax returns early and do not have to pay an amount owing until April 30.

Disadvantage of Efile your return

• You have to pay for the service.
• You need to compare prices against services. Find out what is included in the fee for preparing your return. For example, does it involve year-round support if you wind up being reviewed by the CRA?

2. Netfile

Netfile is a do-it-yourself method. It allows you to file tax returns directly to CRA using the Internet. According to CRA, 26% of total 2014 tax returns were sent by Netfile. To Netfile your tax yourself, you will need a certified tax program, which is listed on CRA website.

Advantages of Netfile your tax yourself

• You are in full control on filing your tax return
• You probably can find a free software to prepare your tax return.

Disadvantages of Netfile your tax yourself

• You need to have the knowledge. Your tax situation may be simple, but Canada taxation system is complicated. A small mistake may lead you into trouble and cost you hundreds of dollars.

3. By mail

You can mail your tax return to your tax centre. According to CRA, 21% of 2014 tax returns were received by mail. In 2014, just over 6 million Canadians filed their taxes the old-fashioned way — mailing in ink-and-paper forms — which, according to some very rough math, required introducing some 2,200 trees to the business end of a chainsaw.

Advantages of mailing your return:

• None. Efile will also accept the transmission of prior year returns for the 2012 and 2013 income tax years. However, if you have to file your tax returns earlier than 2012, you can only mail paper tax returns to CRA.

Disadvantages of mailing your return:

• For a mailed return, you can wait more than six weeks to get a refund.

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Tax audit causes headache. You’ve filed your taxes and already spent your refund, but Canada Revenue Agency may go back to you, and requests additional information in support of your tax return for the year.

These are 10 factors that will typically trigger a tax audit and you would like to avoid.

1. Errors in your Tax Return

A common and entirely preventable audit trigger is making mistakes on your tax form. Mistakes can include writing your address incorrectly, or making calculation error when you subtract your expenses from your business income, or deducting the principle portion of your mortgage payment from your rental income.

Whether you do your income tax yourself, or you hire a tax specialist, it’s always your responsibility to make sure your tax report is accurate. If you find a mistake after filing, you should file an adjustment rather than having the CRA find the mistake for you.

2. Not Providing Information as Requested

In many cases, the CRA isn’t looking to do a full tax audit, but just requesting additional documentation or information to support your claim. They may ask for receipts for childcare expenses or legal documents for the support payment you paid to your ex-spouse. Failing to provide the requested documents within a reasonable time frame could result in a more comprehensive audit.

3. Living Rich Beyond Your Income

A person who drives a Ferrari and lives in a mansion, but just has $25,000 yearly income would be a prime tax audit candidate.

The CRA may conduct a net worth assessment and you will have to explain where the money came from. Of course, there may be good reasons. Maybe you inherited money; maybe you won the lottery; maybe the money isn’t yours, but belongs to somebody else.

The key to beating the net worth assessment is to document any significant funds you receive, especially when the funds come from outside Canada.

4. Compliance History

If the CRA finds that you have cheated once, there are much more chances that you will hear from them again. On the other hand, if they conduct a random review and you pass without red flags, they will be more likely not to bother you again.

5. Inconsistencies in your tax return from year to year

If there is a significant difference from one year to the next, the CRA may decide to follow-up with an tax audit. Specifically, expenses such as travel and entertainment are ones that CRA will watch. You need to be aware your previous year’s income and expenses and be prepared to substantiate any variance with CRA.

6. Out of the ordinary

Claiming higher than usual expenses is asking for trouble. The CRA may compare tax returns amongst similar businesses in the same industry to make sure whether income and expense are reasonable.

For obvious reasons, the CRA does not publicize what the amounts are that will automatically trigger a review. However, if you are claiming to use your vehicle 95 per cent for business use, we would expect that they will want to see your log book.

7. Mixing your personal and business

For incorporated business owner, the habit of taking monies out of the business regularly to pay living expenses needs to be stopped. To pay yourself, you now need to prepare a T4 slip for yourself, and deduct CPP and income taxes. If you hire your family members and make payment to them, you need to make payroll deductions, and keep records.

8. Your business looks like a hobby

Self-employed business loss can be applied against any other type of income you might report. The CRA does not expect every new business to make a profit their first few years. However, you cannot create a business for the purpose of creating losses. If you claim losses year after year, the CRA may classify your business as a hobby and you may have to answer questions about your business plan from a CRA tax auditor.

9. Not using fair market value for residential real estate rentals

If you lose money in your real estate rental, the CRA may suspect that the property is being rented for less than market-value rent to your family members or friends. The CRA may rely on property tax and interest expense information to adjust your reported rent income from your property.

10. Referrals

The CRA may commence an tax audit based on information obtained from a third party, or a referral from another CRA department, or other government organizations.

Being organized is the best defense. This is why you should ensure you keep good, clean records. Not only does it save you time and money each year not having to organize your records, it also ensures you can respond quickly to CRA information requests.

Even if you have low income or no income and you don’t need to pay tax, you still should file your tax return. Why? It is because you have to file tax to get your tax refund and government benefits. It may bring you thousands dollar a year.

You have to file tax return to get tax refund.

Your employer has already deducted tax from your pay cheques. If your income is low, all or at least part of your tax has to be refunded to you after you file your tax return.

You have to file tax return to get the GST/HST credit.

If you are 19 years of age or older, you might be eligible to receive the GST/HST credit. You must apply for the GST/HST credit by filing your tax return and completing the GST/HST application area on page 1 of your tax return.

You have to file tax return to get Canada Child Tax Benefit.

If you have child younger than 18 years, you may be qualified for Canada Child Tax Benefit (CCTB) and Ontario Child Tax Benefit. Because these benefit will be adjusted according to your income, so you have to file your tax return; otherwise you will not get that money.

You have to file tax return to carry forward your tuition credits.

If you are college or university student and you receive Form T2202A, you can claim tuition, education, and textbook Amounts on your income tax. These credits may not help you if you have no or low income. But it may help you get thousands of tax dollars back when you start working. Also, you may be able to transfer the unused part of these amounts to your spouse or common-law partner or your spouse’s or common-law partner’s parent or grandparent.

You have to file tax return to carry forward other unused amounts.

You can normally carry forward unused charitable donations, interest on student loans (both for up to five years) and moving expenses, along with some others.

You have to file tax return to claim Working Income Tax Benefit (WITB).

The WITB is generally available to individuals aged 19 and older who are not attending school full-time and whose income is within the eligibility range. This benefit was introduced in 2007, and is a refundable tax credit. For example, an individual living in Ontario can get up to $1000 in WITB payment from the Government by simply filing his tax return.

You have to file tax return to claim Ontario tax credits.

In addition, a number of new or enhanced benefits and credits are available to eligible tax filers as part of Ontario’s tax plan:
The Ontario Energy and Property Tax Credit.If you pay rent or property tax, you could get up to $973. If you are a senior, you could get up to $1,108. The credit is paid monthly as part of the Ontario Trillium Benefit.

The Ontario Senior Homeowners’Property Tax Grant. If you are 64 years of age or older and you own a home, you could qualify to get up to $500 to help with the cost of your property taxes.

If you have not filed your previous years’ tax, you can file your taxes back as long as 10 years. All you have to do is preparing your tax documents, file it, mail it and wait for the money coming back.

Before this year-end, it is a good time to do a little year-end tax planning, so it can pay you big financial dividends in the future. The following are some popular tax planning items that you should be aware of this year.

Moving to another province

The income tax rate in the province where you’re living as of Dec. 31 determines how much provincial tax you’ll pay for the whole year. So if you’re moving to a higher-tax province, such as moving from Ontario to Quebec, you may want to delay your move until the new year.

Withdrawing From Your TFSA

If you have set up a TFSA and you’re planning a withdrawal, consider doing so before the end of year rather than early next year. This is because the amounts withdrawn this year will create additional contribution room for next year.

Making payments and donations by Dec. 31

Most people know about the Dec. 31 deadline for charitable donations, but other payments also need to be made by the end of the year to get a tax deduction or credit for this year.These payments include medical expenses, childcare expense, spousal support payments, charities and donations, investment counsel fees, interest and other investment expenses.

Tax Loss Selling

Year-end is a good time to consider selling those poorly performing investment that have accrued losses (and aren’t likely to recover) in order to offset any capital gains realized current year. Any unused capital losses realized can either be carried back three years or forward indefinitely to offset capital gains in any of those years. In order to ensure that trades are settled prior to the end of the year, all trades should take place no later than December 24th.

Paying a Salary to Family Members

You can pay your child or spouse a reasonable salary based on their involvement in your business. The salary should be a reasonable amount considering the type of work performed and should be comparable to what a third party would be paid to perform the same type of service. If your child or spouse has no or low income, they will pay no or few tax for this salary.

Deferral of Income

If you can control when to receive your income, you can consider delaying the can consider delaying the final completion of work and billing until after December 31st. Any income received after the year-end will be taxed next year instead, providing a one year deferral of the tax liability.

Purchasing Capital Assets

If you’re self-employed and need to make a capital purchase such as a computer or furniture for your business, you should do it by Dec. 31.This is because it can provide your business with a deduction for Capital Cost Allowance (CCA). As long as the capital assets are available for use prior to December 31st, the business can claim the CCA deduction this year.

Year-end Tax planning have to be done earlier to be able to get the benefit next spring when you file your return and the biggest mistake is doing nothing.

If you have children under 18, you will benefit from the new Family Tax Benefits announced by federal government on Oct 9, 2014. Here’s what’s new:

Enhanced Universal Child Care Benefit (UCCB)

Now, if you have child under the age of 6 years, you are receiving $100/month for each child. Under the new family tax benefits, the UCCB will increase monthly $60, from $100 to $160 for each eligible child under the age of 6 years effective January 2015.

The new family tax benefits also extended UCCB payments until age 18. As a result, you will receive UCCB $60/month for each child age between 6 and 18.

If you are currently receiving the UCCB or CCTB, the increase will be applied automatically. If you currently do not receive UCCB or CCTB, you can apply online by using “Apply for child benefits” through the CRA’s My Account.

While the changes to the UCCB will be effective from January 2015, the first seven months’ difference will be paid out in July 2015.

Increase child care expense limits

The maximum deduction limits for child care expenses will increase from:

• $10,000 to $11,000 for each child who is eligible for the Disability Tax Credit.
• $7,000 to $8,000 for each child who is under seven years of age at the end of the year, and
• $4,000 to $5,000 for each child who age between 7 to 16 and infirm dndent children over age 16

The increasing will start with the 2015 tax year. It means you can claim it in your 2015 tax return

Increase children’s fitness tax credit

The maximum amount of children’s fitness tax amount is increased from $500 to $1,000. You will be able to take advantage of the increased maximum amount when you file your 2014 income tax return.

On October 9, 2014, a proposal was announced to convert the Children’s Fitness Tax Credit to a refundable tax credit for 2015 and subsequent tax years.