25 Tips For Filing Your Own Tax Return

With the plethora of tax preparation software available, many people file their own tax return each year.

But even with the software questions and guidance, many deductions are commonly overlooked, so much so that H&R Block offers a free “Second Look” for any new clients’ past year’s tax return to check for anything missed.

Related: Smart Tax Planning Strategies

Filing Your Own Tax Return

Here are 25 tips for filing your own tax return this year:

  • Get your benefits – People turning 19 before April 1, 2014 should be filing a 2012 tax return even if they’ve had no income.  This will allow them to collect the GST/HST credit for the quarter following their 19th birthday.
  • Claim your income – Any child under 18 years of age who works part-time, or during the summer, may be entitled to a refund of taxes paid if their income is below the basic personal amount, as well as any CPP deductions made.  Even if no tax was deducted, reporting the income will increase the child’s RRSP contribution limit for future years.

RelatedRRSP Over Contribution Limit and Carry Forward Rules

  • Medical expenses – Health care premiums paid through payroll deductions, health care travel insurance, deductibles, and any out of pocket expenses are deductible.
  • Disability tax credit – Even if you don’t think you would qualify, it may be worth asking your doctor to review the criteria on the T2201 Medical Disability form.  This form is submitted to the CRA and they determine whether you qualify or not.
  • Determining your dependents – If your parents/grandparents live with you, are over 65 and have a relatively low income you may be able to claim them.  However, pets – even those with people names – are not dependents.

Tax tips for families with children

  • Child Tax Credit – Claim for each child under 18.  If one parent can’t use the entire amount to lower their tax payable, the unused amount can be transferred to a spouse or common-law partner.
  • Children’s Fitness Amount –A non-refundable credit for children under 16 who are enrolled in eligible programs of physical activity.  Not every program meets eligibility guidelines though, so check.  Make sure you keep your receipts.  Some provinces have their own credits too.
  • Children’s Art Credit – This is a non-refundable credit for children under 16 enrolled in an eligible program.  Programs can include art classes, ballet lessons, language classes, Boy Scouts and Girl Guides.  Again, keep your receipts.
  • Universal Child Care Benefit:  This is available to any family with children under the age of 6 regardless of household income.  It is taxable in the hands of the lower-income spouse.
  • Public Transit – This non-refundable tax credit also included transit passes purchased for dependent children under 19.  The passes have to be for a period of at least one month (or four consecutive weeks).

Related: Tax Considerations For Single Income Families

Tax Deductions for Investors

Investors can earn three types of income – business, property (interest, dividends, rents) and capital gains.

To claim a deduction, your expenditures must be incurred to earn income from the business or property, not be a capital expenditure, not be used to earn tax-exempt income, not be a personal or living expense, and be reasonable.

RelatedHow To Calculate Capital Gains And Adjusted Cost Base

You should be able to deduct the following:

  • Management fees
  • Safety deposit box rental
  • Accounting fees
  • Fees for investment advice
  • Interest on money borrowed to earn investment income (not tax-exempt)
  • Capital cost allowance on computer equipment, software and office equipment

What to do with your tax refund

If you’re expecting an income tax refund this year, put it to good use.

Related: Why Tax Refunds Are Bad

  • One of the best uses for a tax refund is to pay down debt, especially high-interest debt.
  • Pay off RRSP loansMany RRSP loans include a three or four month grace period, during which time you don’t have to make any payments, although the interest continues to accrue.
  • Contribute to your RRSP and/or TFSA.  The sooner your money gets into one of these plans, the longer it has to grow, tax-deferred or exempt.
  • Make up for missed contributions.  If you haven’t made your maximum RRSP or TFSA contribution every year, you’ll have unused contribution room.
  • Make a lump-sum payment against your mortgage.  A lump-sum payment is applied directly to the principal of the loan.  Be mortgage-free sooner by saving thousands of dollars in interest costs over the life of the mortgage.
  • Fund a child’s education.  Contribute to a tax-deferred RESP for the post-secondary education of your children or grandchildren.

Where’s my refund?  Get the details on the status of your tax return at the CRA website.  Go to www.cra.gc.ca and click on the “My Account” link.

For more tax tips go to www.hrblock.ca/resources/tax_tips.asp

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  1. Bryan on February 20, 2013 at 7:26 pm

    Great article. I am going to be doing my own return this year, most likely with TurboTax, thanks to an article you wrote a while ago about how user-friendly it is. I just noticed though, there is a “Basic” for $19.99 for 8 returns, a “Standard” for $39.99, and a “Premier”. I was just curious, should go with the Basic or Standard version? In that older article, you stated you used Basic, but there wasn’t any mention of Standard at all. Maybe Standard has been introduced after that article was released. Anyways, any advice would be great. Thanks in advance!

  2. Boomer on February 21, 2013 at 1:02 pm

    @Bryan: Thank you for your kind comments.I’m sure you’ll be successful in doing your own return.

    In a nutshell , here are the main differences in the versions.

    Free Online Edition – best if all you have are T4 income slips
    Basic (8 returns) – T4 slips only and charitable deductions
    Standard (8 returns) – you claim deductions such as RRSPs, charity and medical expenses
    Premier (12 returns) – for rental and investment income
    Business (12 returns -for the self employed. Can be used for both personal and business tax
    They are always changing the names and tweaking what’s available on each version. I probably will use the Standard this year.

    For more detail about the best version for you go to:

    Check your prices. You can get the CD versions on sale for a lot less from Best Buy, Staples and even SuperStore.

  3. Pam on February 23, 2013 at 12:51 pm

    I’m glad you pointed out that people under age 18 who are working can also file a tax return. Many Canadians aren’t aware of this, and kids may as well starting building contribution room in their RRSP as soon as possible.

  4. Bryan on February 24, 2013 at 5:56 pm

    @Boomer: That breakdown is very useful! Looks like I’ll be using Standard. I have a “dumb question” to follow-up. It says it includes 8 returns. Do you know if that means 8 returns for the 2012 year? Or 8 total returns for 2012 and beyond (so technically 1 for the next 8 years)? Thanks again for the help!

    • Boomer on February 25, 2013 at 2:30 pm

      @Bryan: The CD version does 8 returns for the year, so it’s more economical if you have several returns, say for a family, than the online version. If income is less than $25,000 it is not included in the 8 (previously anyway, I haven’t checked this year’s version).

      You have to buy a new program every year.

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