Canada Life Insurance Blog

The tax season is upon Canadians once again. If you file your own taxes then make sure you take advantage of these new tax credits!

Most Canadians have until April 30, 2015 to file their income tax returns for the fiscal year of 2014. The exceptions are people who are either self-employed or live with a self-employed (can be common-law) spouse, in which case the filing deadline is June 15, 2015.

The Conservative government has made two notable changes as far as tax breaks and credits go during the last year, and this blog article will place special emphasis on these changes (as opposed to listing all tax credits/breaks).

The more we can lower our taxable income, the less tax we need to pay out. Let’s not miss any credits or breaks, we pay enough tax as it is!

Note: for a complete listing of tax credits please click here.

Family Tax Cut (Income Splitting for Families with Children)

This is one of the high profile announcements that was announced back in January of this year. It lets a taxpayer transfer up to $50,000 of income to their spouse so that the taxpayer can collect a non-refundable credit of up to $2,000.

To be eligible, however, there must be at least one child in the family under 18 years old.

This break is implemented by transferring up to $50,000 in income to the spouse who makes less money and then calculating the difference in payable tax before and after the transfer.

In other words, by transferring this money you and your spouse are allowed to save up to $2,000 in payable tax.

This will help out couples who have large income disparities and young kids. If you do not have children under 18 and/or are single then this tax break does not apply to you.

A couple more points to note about this Family Tax Cut:

• It is still available if your spouse has died at some point during the tax year.
• It is not available if either partner does not file their income tax return, declares bankruptcy or splits their pension income.
• The credit is not available to anyone who was incarcerated for 90 days or more in a prison or similar institution.
  

Children’s Fitness Tax Credit (CFTC)

Canadians can now claim up to $1,000 per child for any fees that were incurred as a result of that child being enrolled in a physical fitness type of activity (a $500 increase from last year).

To be eligible the child must be 16 years old or less at the start of the year for which the fitness activity was paid for. However, this age limit is increased to 18 years old if it is for a child with a disability (click here for more).

Applicable activities must be:

• Ongoing for 8 weeks for non-camp activities
• Ongoing for 5 consecutive days for camp activities
• Be supervised
• Require physical activity, which is defined as contributing to cardiovascular endurance along with using one of the following:
   
  
• Muscular strength
• Muscular endurance
• Balance
• Flexibility

Some examples that qualify are:

• Team sports like soccer, hockey, football, baseball, basketball, etc.
• Going to a summer camp (that lasts a minimum of 5 days)
• Golf lessons
• Swimming lessons
• Bowling

(A case could be made for almost any organized physical activity).

Conclusion

We hope you found this blog article helpful.

Make sure you take full advantage of all the 2014 tax credits and breaks that you can get!