| Before the March 1st RRSP deadline, tax payers are | | | | year? |
| asking themselves important tax related questions; | | | | In this case scenario, it's recommended to file your |
| Should I put my money in a Tax Free Savings | | | | taxes even if you had no income or taxes owning. For |
| Account (TFSA) or in my RRSP?, When is the right | | | | students, if you are in RAP - Repayment Assistance |
| time to move from a province to province?, Should I | | | | Program, the government might ask you as prove of |
| file my taxes even though I have not made much | | | | income for your Notice of Assessment which is |
| money in the 2009 tax year?, Can I get any tax | | | | received after you file your taxes. If you haven't filed |
| deductions for my medical costs in the 2009 tax | | | | your taxes you will have no Notice of Assessment, |
| year?, Can I claim my elderly parents or grandparents | | | | hence no prove of income and your RAP application |
| as my dependents and get tax deductions in the 2009 | | | | might be declined. In addition, filing your taxes will |
| tax year?, Can I use my children's university tuition | | | | determine if you are eligible for such government |
| credits to reduce my tax obligations? | | | | programs as the Canada Child Tax Benefit, a GST |
| Should I put my money in a Tax Free Savings | | | | HST credit or other wide variety of tax rebates |
| Account (TFSA) or in my Registered Retirement | | | | available in the 2009 tax year. As well, filing reports will |
| Savings Plan (RRSP)? | | | | increase your future RRSP contribution room. |
| If you can invest the money you should use both tax | | | | Can I get tax benefit if I spent a lot of money on |
| vehicles, but if you can afford just one you must | | | | medical costs? |
| consider the effects on your finances and impacts on | | | | In order to claim your medical expenses in the 2009 |
| overall tax claim of each one separately. RRSP is | | | | tax year, these medical expenses must exceed 3% of |
| suppose to give you a tax shelter at the time of tax | | | | your NET INCOME. You can benefit from tax breaks, |
| filing in any given tax year, while Tax Free Savings | | | | more likely, if you claim all medical expenses for you, |
| Accounts uses money after taxes, which once | | | | your spouse or common-law partner and your |
| deposited in a TFSA, accumulate interest which at the | | | | dependents who are under 18 years of age on a |
| time of withdrawal is tax free. If you find a financial | | | | SINGLE TAX RETURN. As well you can claim travel |
| vehicle within the TFSA account that yields you a lot | | | | costs, meals and vehicle operating expenses, but only |
| of interest, the money made from those investments | | | | if you have traveled more than 40 km to get to the |
| are 100% yours at the withdrawal time. So, if you think | | | | medical facility for treatment. If you traveled more than |
| that you will be in a lower tax bracket at the time of | | | | 80km to get to the treatment you can file additional |
| retirement, you should invest more in an RRSP, | | | | expenses for accommodations such as hotel, motel |
| because you will get a greater tax refund at the time | | | | etc...It's usually better to claim medical expenses on an |
| of tax filing. However, remember once the RRSP is | | | | income tax return of a spouse with lower income in |
| withdrawn it will be taxed in the future. If you have low | | | | 2009 tax year. |
| income in the future, you will get a smaller tax burden | | | | Can my elderly parents be considered my |
| from the RRSP withdrawal. In the second case | | | | dependents? |
| scenario, if you think you will be making more money in | | | | Remember, dependents are not only your children |
| the future or at the retirement age, TFSA is the better | | | | under the age of 18; they can be your parents or |
| option because as mentioned before TFSA accounts | | | | grandparents too, provided that they are mentally or |
| and money accumulated in those accounts are not | | | | physically infirm dependents. Therefore, you are taking |
| subject to taxation at the time of withdrawing money. | | | | care of them, they live with you and have a net |
| I am moving to another province from my current | | | | income of less than $18,081- you are eligible to claim all |
| province of residence. | | | | or part of the CAREGIVER AMOUNT. |
| When is a good time to move? The simplest answer | | | | Can I claim tuition credits from my children who are |
| to this question is that you are subject to the tax rates | | | | enrolled at a college or university? |
| of the province in which you reside on DECEMBER 31, | | | | Yes, often students have little or no income, so that |
| of any calendar year. You should check provincial tax | | | | they can reduce their income taxes to zero with just |
| rates to get an idea which provinces have higher tax | | | | their personal not taxable amount and then either carry |
| rates and which ones have lower. Obviously, if you are | | | | forward their tuition credits for future tax years or |
| moving to a province with higher tax rates it is more | | | | transfer the credits to parents or grandparents, spouse |
| beneficial to move in the New Year so that you can | | | | or common-law partner, or even your spouse's or |
| still qualify for previous tax year at lower tax rates. If | | | | common-law partner's parent or grandparent. The |
| the scenario is reverse, pack your bags and get a | | | | student must file their income tax first and claim the |
| permanent address in your new province, quick and | | | | tuition credits and then any amount left over after the |
| before the year is out. | | | | students' tax is reduced to zero can be transferred to |
| What if I didn't make too much money in the 2009 tax | | | | you. |