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Amount for an eligible dependant |
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What is the amount for an eligible dependant? |
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The amount for an eligible dependant is what used to be called
the equivalent-to-spouse amount. It allows single or separated taxpayers
who are supporting a dependant an equivalent tax break to that enjoyed
by taxpayers who support a spouse or common-law partner. |
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I got married last year. Before I got married
I was supporting my 6-year-old son from a previous relationship. Can
I claim the amount for an eligible dependant for my son? |
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Yes, you can claim the amount for an eligible
dependant if you were single or separated at some time in the year. |
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I am divorced and had to pay child support payments
to my ex-wife on behalf of my son. However, my son moved in with me
in July, and I was no longer required to make the support payments.
Can I claim the amount for an eligible dependant for the period in
which he lived with me? |
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No. In any year in which you are separated from your spouse or
common-law partner for the entire year, you cannot claim an amount
for an eligible dependant if you were required to make support payments
for that dependant. However, you will be able to claim the amount
for an eligible dependant next year if your son continues to live
with you next year and you are no longer required to make support
payments. |
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Charitable Donations |
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If I have made charitable donations, but my other non-refundable
tax credits are sufficient to reduce my taxes to zero, can I carry
these charitable donations forward, and if so for how many years can
I carry them forward? |
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Yes, you may carry the donations forward for five years. |
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I have made charitable donations of under $200
during the tax year. Next year I plan to donate about the same amount.
Is it best to claim all of my present donations on this year's
tax return, or wait until next year or later to claim these?
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For smaller donations it may be advantageous to
save the donations for several years and combine them because there
is a higher credit for donations over $200. The federal non-refundable
credit for donations up to and including $200 is 16%, and on the
balance, 29%. You will also be entitled to a provincial credit equal
to the lowest provincial tax rate on the first $200 and highest provincial
tax rate on the balance. |
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I attended a social that was intended to raise funds for a "recognized" Canadian
charity. Can I claim the cost of the tickets as a charitable donation? |
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Probably not. The cost to attend such an event
could only be claimed if the charitable organization separated the
admission cost portion from the donation portion, and issued a receipt
for the amount qualifying as a donation. This is because a charitable
donation must be a true gift without any consideration being received
in return. |
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Child Care Expenses |
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Both my wife and I work full time. She makes more money than
I do, so it is more beneficial for her to claim the day care expense.
Is this OK? |
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No, the spouse or common-law partner with the lower net income
must claim child care expenses. Exceptions exist for periods during
which the lower-income spouse or common-law partner was infirm, going
to school or in prison. |
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I'm a single Mom and work evenings. I have
a teenaged babysitter come in to look after my children. Can I claim
this as child care
expenses?
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Yes, as long as the teenager is not related to you and she is
looking after your children so you can go to work. Include the babysitter's
S.I.N. (if she has one) and make sure you have a receipt. |
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Contributing to an RRSP |
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How much can I contribute to my RRSP that I can deduct on my 2004
tax return? |
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Your RRSP limit for 2004 is shown on your 2003 Notice of Assessment
that you received after you filed your 2003 return. If you have lost
your Notice of Assessment, you can call the government TIPS line at
1-800-267-6999. |
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What happens if I accidentally contribute too much? |
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If you contribute more than your limit, you can
carry forward the excess amount on Schedule 7 and deduct it in a
future year when you have accumulated more RRSP room. However, if
your excess contribution is more than $2,000, you will be subject
to penalty tax. In this case, it may be advisable to withdraw the
excess amount. |
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What are the tax consequences of contributing to my wife's RRSP? |
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If you contribute to your wife's RRSP, you get
the same deduction as if you had contributed to your own. Likewise,
the deduction is subject to your own RRSP limit, not your wife's.
On the other hand, the RRSP belongs to your wife, so when the money
is removed, she will have to report it, not you. In short, you get
the deduction; she reports the income. Therefore, it is an excellent
way to split income between spouses. However, to prevent abuses,
any withdrawals from a spousal RRSP will be attributed back to the
contributor to the extent contributions were made to any spousal
RRSP during that year or the immediately preceding two years. |
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Is it best to contribute to my own or to my husband's RRSP? |
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That depends on the level of income both you and your husband can
expect at retirement. Ideally, you should try to equalize the retirement
income between you to minimize taxes. This means that if you will have
a company pension when you retire, and your husband will not, it may
be best to contribute to your husband's RRSP. However, if the situation
is reversed, you should contribute to your own RRSP, at least until
you have generated enough capital in your RRSP to generate an income
to equal your husband's retirement income. |
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Disabled Taxpayers |
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I understand that there is a disability tax credit. As I am somewhat
arthritic, I am not able to participate in many recreational activities.
Does the inability to participate in such activities establish a legitimate
claim for the disability credit? |
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Probably not. A disability must be such that it markedly restricts
your ability to perform a basic activity of daily living. This does
not include working, housekeeping, or a social or recreational activity. |
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What certification is required in order to claim the disability
tax credit? |
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In order to claim the amount
you must file a T2201 Disability Tax Credit Certificate, which must
be completed by a medical doctor, optometrist, audiologist, psychologist,
occupational therapist or speech language pathologist. They are the
only people who can certify that you meet the definition of "disabled." |
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