Tax Planning Tips

Joel Lazer, FCPA, FCA, CIRPConsulting, Tax

An easy item to overlook on the preparation of your 2009 personal income tax return is the Home Renovation Tax Credit.  Garry Chan, our tax partner, wrote about the tax credit in March last year.  Find the article on our website at www.lazergrant.ca.  To recap, your repairs, replacements or renovation of anything in your home or cottage will qualify.  If you live in a condominium, you will be entitled to your share of expenses undertaken by the condominium corporation.  Your property manager will provide the details of your entitlement.

The credit is 15% of renovation expenditures incurred between January 27, 2009 and February 1, 2010.  The first $1,000 does not count and the upper limit is $10,000.  The maximum credit is $1,350 (15% of ($10,000 less $1,000)).  The major proviso is, the items must be attached or installed.  Painting will qualify; both materials and labour, unless you do the painting yourself.  Generally, blinds and drapes will qualify if they are installed.

Take a little time to reflect on what has been done around your house, cottage or condominium in the last year.  Things that seem like regular maintenance may qualify.  I’m looking into whether my condominium corporation repainting the parking lot qualifies.

Don’t forget about the Tax Free Savings Account which was introduced for 2009.  Anyone at least 18 years old can make an investment and the income will not be taxable.  The contribution limit for 2009 was $5,000 per person.  The limit will increase annually by $5,000 plus inflation.  At the moment the 2010 limit has not been announced.  The restrictions on investing are similar to the Registered Retirement Savings Plan investments.  A number of strategies have developed to increase the benefit of these plans.  We’ll share some of those strategies in the upcoming weeks.

Consider also if you qualify for the Disability Tax Credit.  The credit is worth approximately $1,700 per year per person. The types of disabilities include difficulties in daily living from sight, speech, hearing, walking, thinking, feeding and washroom activities.  To qualify, you need a certificate from your doctor which is completed once, and then redone in the future only at the request of Canada Revenue Agency.  Note, as well, it is possible to claim the credit retroactively ten years.

If you have questions with respect to any of the above please call (977-3500) or email (jlazer@lazergrant.ca).  We would be delighted to assist.