While most people use a tax program to complete their tax return, the program is only limited to the information you enter and you may not be fully maximizing your tax refund.
As an accountant, I come across plenty of small credits that are often overlooked by people because they aren’t aware they apply or aren’t sure how they work.
Here are a few quick tips to make sure you’re getting the most for your money.
Making Changes to a Prior Year
Did you know that you can amend your tax returns up to 10 years back? Lots of people don’t know this and any missed credits or deductions from prior years can be amended to trigger a refund from a prior year.
Related: How to Fix Tax Return Errors
Making simple mistakes on a tax return like forgetting to claim a credit or deduction is easy to do so it’s important to take a few minutes and make sure there isn’t anything overlooked.
You can easily adjust your tax return by completing a form called T1-ADJ (T1 Adjustment Request). It’s important that the adjustment form is filled out rather than filing a second tax return for that year.
Here are a few things that people commonly miss and could potentially put more money in your pocket.
– Brokerage fees. If you have bought or sold stocks in the past 10 years and paid brokerage fees related to the transactions, the fees paid can be deducted on your tax return (non-registered accounts only).
– Child care costs. Here’s a trick that lots of people miss. If the lower income spouse is unable to look after the children because they were attending school full-time, the higher income spouse is able to claim the child care costs. This will come in handy for us when we eventually start our family in the next couple years since my wife may go back to school full-time.
– Moving expenses – you can deduct reasonable moving expenses related to a move that brings you closer to your work. Note that the move needs to be at least 40km and has to be work-related.
– Capital losses. If you sold shares in a company for a price less than you paid, the capital loss should be recorded for that year even if there are no capital gains in the same year because the capital loss can be carried forward to future years (and eventually be used to offset any capital gains in the future).
– Caregiver amount – this is a credit available for people who had their mother or father move in with them and needed to care for them. Note that there is a maximum income requirement for the mother or father in order for you to be eligible to claim this credit.
– Disability amount – if you have a child born with a severe disability you can get a credit for the disability and will need to get your doctor to fill out a certificate stating that they are in fact disabled.
– Tuition credits – if you have a child going to post-secondary school you can transfer up to $5,000 per year of his/her tuition credits. This is useful because the student likely won’t have an income high enough to use all of the credits.
– Donations – they should be combined between spouses in order to maximize this credit (the % of credit is higher for any donation over $200). There is also a ‘super’ credit available for first-time donors this year. I make charitable donations each year so I wouldn’t qualify as a first-time donor, but this credit is an extra incentive for anyone who doesn’t normally make donations.
The above list gives you a few ways to maximize the tax refund you will receive, and the best part is that you are allowed to go up to 10 years back to correct any mistakes made on prior returns.
If you’ve missed credits or deductions that you should have taken, consider filing a prior year adjustment (T1-ADJ) available on the CRA website.
Dan is an accountant in his late 20s who lives in Calgary, Alberta. He is passionate about personal finance, frugal living and investing. He rarely pays full price for anything and has never had any consumer debt. He is happily married with one small, spoiled dog. He writes at his blog called Our Big Fat Wallet.