“In this world nothing is certain but death and taxes.” That’s one of my favorite quotes from Ben Franklin, the eighteenth century American author, diplomat, inventor and scientist who’s iconic image is associated with my company, Franklin Templeton Investments Corp.
Death, of course, is inevitable. I hope my fitness regime, balanced diet and lots of laughter with family and friends keeps the Grim Reaper at bay for many years to come!
Of course, no one wants to pay more taxes than necessary. Some simple tax planning can ensure you don’t pay the tax man too much money. I urge Canadians to take advantage of these federal programs.
Know your tax credits
Every Canadian can claim a personal tax credit of $10,320. If you have children under the age of 18, you can claim a $2,089 tax credit per child.If you have a child under the age of six, you are eligible to receive $100 per month per child under the Universal Child Care Benefit program.
Childcare Expenses
Many childcare expenses can be deducted from your tax return. For example, you can claim the cost of summer camps, daycare, nannies and before- and after-school programs. But there are a number of limitations so check the fine print.
Children’s Fitness Tax Credit
You can save money if your children are active. The CFTC is a non-refundable, personal tax credit that lets parents claim the cost of their kids’ enrollment in qualified fitness programs. Kids must be under the age of 16. The credit amount is calculated by multiplying the lowest tax rate (15 per cent) by $500. That means the maximum credit per child in 2009 is $75.
Buy a home tax effectively
The Home Buyers Plan allows you to withdraw funds from your Registered Retirement Savings Plan (RRSP) to buy or build a qualifying home (i.e.: housing unit in Canada) for yourself or for a related person with a disability. In one calendar year, you can withdraw up to $25,000 tax-free. Keep in mind, the money must be repaid within 15 years.
Public Transit Pass Tax Credit
Canadians who use subways, buses and other public modes of transit can earn a tax credit for their environmentally friendly ways. The credit amount is calculated by multiplying the amount of your yearly transit cost by 15 per cent. So, if the yearly cost of your transit is $1,200 ($100 per month) you will receive a tax credit of $180 for 2009.
Pension income splitting
In 2008, the federal government introduced this major change to Canadian tax policy. Up to 50 per cent of a pension income from a higher-income spouse can be transferred from a higher income spouse to a lower income spouse, which can result in lower taxes over all for the couple. Canadians can apply to split pension income via the T1032 form, known as the Joint Election to Split Pension Income.
Philanthropy to offset capital gains
The federal government has eliminated taxes on in-kind donations of securities, mutual funds and segregated funds to registered charities. Donating securities to registered charities is a win-win situation. It allows the charity to benefit and you do not have to pay tax on capital gains, provided the tax receipt for the donation is accompanied by form T1170.
Take advantage of investment losses
If you have posted a loss on an investment outside of an RRSP, RRIF, TFSA or other registered account, you can sell the investment and use the loss to offset against gains. You can offset the losses against current year gains or you can carry back the losses to offset them against gains in the previous three years. You can also carry losses forward to be offset against future gains.
Dennis C. Tew serves as Senior Vice President and Chief Financial Officer for Franklin Templeton Investments Corp. (“FTIC”). His responsibilities include oversight of the corporate accounting, taxation, payroll, treasury and corporate development and planning groups as well as participating on the firm’s Management Committee, Pension Committee and chairing its Operations Committee. Additionally, as a member of the Franklin Templeton international tax and corporate finance groups, Dennis is involved in developing global policies and initiatives. Visit franklintempleton.ca to learn more tax tips.
Related Posts:
If you’d like to write a guest post for Canadian Finance Blog, we’d be happy to see what you’ve got!
Please 
This is the first year where instead of getting a tax refund, I had a tax bill instead! I know it’s stupid to be happy about a tax refund when in the end it’s my own money being returned, but emotionally it does feel better to be refunded.
No kids to deduct the taxes, yet, however, you forgot to mention another alternative: Moving to a lower tax jurisdiction! That is, of course, if you prefer the prairies…
.-= Kevin@InvestItWisely´s last blog ..Becoming a Rich Man (or Woman) =-.
Kevin,
Tax refunds are a great example of the psychology of money. It’s great that you know you’re better off having your money first, and then pay a tax bill after. A refund is simply an interest free loan to the government.
Art Nouveau is an international style of art, architecture NBA Basketball Shoes and design that peaked in popularity at the beginning of the 20th century (1880-1914) and is characterized by highly-stylised, flowing, curvilinear designs often incorporating floral and other plant-inspired motifs. Art Nouveau was a concerted attempt to create an international style based on decoration. It was developed by a brilliant and energetic generation of artists and designers, who sought to fashion an art form appropriate to the modern age. Over the years, there have been many influential artistic movements and Art Nouveau being howard shoes one of the most popular with the general public. Artists, architects and designers Nike Basketball Shoes all fell under its spell during the 1880s, producing highly stylized pieces of work. Examples of magnificent buildings in the style can be found all over Europe, particularly in Paris, Prague, Budapest, Barcelona and Berlin. Other locations, such as London, New York City and St. Petersburg also have landmarks in the cheap basketball shoes style. During the World’s Fair in Paris in 1900, the movement was brought a wide…