How Can I Save on My Taxes?

Claim your deductions

People with higher incomes pay more in income tax. There are expenses you can deduct to reduce your income tax. When you claim a deduction, your taxable income is less.

Here are some examples of when you can claim a deduction on your income tax:

• I support my spouse.
• I support a family member who has a disability.
• I am a single parent.
• The other parent and I both work full-time and we have childcare expenses.
• I am a full-time student.
• I give money to a charity.
• I am a senior.
• I have a disability.
• I run a business out of my home.
• I had to move to be closer to my job.
• I have medical expenses not covered by my medical insurance.

Can I get some payments and credits from the government?

Even if you have no income to report or tax to pay, you may be able to get some payments or credits from the government.

To make sure you claim all your deductions, ask for help. Call your community centre, accountant, bookkeeper or tax preparer and see if anyone can help with an income tax return.

There are different kinds of payments and credits. The main ones are:

• Canada Child Tax Benefit (CCTB) payments
• HST credit (harmonized sales tax)
• Tax credits from the provincial government

To get any of these payments or credits, you must file an income tax return.

Canada Child Tax Benefit (CCTB) payments

The Canada Child Tax Benefit (CCTB) is a tax-free monthly payment for families who need help with the cost of raising children under age 18.

The amount you get depends on how much you make and how many children you have. You should apply for the CCTB as soon as possible after your child is born or after you become a resident of Canada. Even if you feel you will not get the CCTB because your income is too high, you should still apply. The government makes the payment based on your income for the previous year. You will have to provide proof of birth with your application if:

• you have not been paid CCTB before
• your child was born outside of Canada
• your child was born in Canada but is more than a year old

You apply for the CCTB by completing the form, Canada Child Benefit Application. For details, go the Canada Revenue Agency website: www.cra.ca.

You may have to fill out an additional form if:

• You and/or your spouse are not Canadian citizens.
• You and/or your spouse have become new Canadian citizens within the last 12 months.
• You and/or your spouse have become residents of Canada within the last two years.

BC Family Bonus is a payment from the provincial government to help you with the cost of raising children if your income is low. The BC Family Bonus comes with the Canada Child Tax Benefit. You do not have to apply for it. The government decides if you qualify for it based on your income tax return.

If your income is low, you may be able to get a BC HST Credit. This is a payment to help you pay the HST on the things you buy.

• The maximum credit is $230 each year per family member. If you pay taxes as a family and your taxable income is up to $25,000, you can get the maximum credit.
• If you pay taxes as an individual and your taxable income is up to $20,000, you can get the maximum credit.
• If you have income above these amounts, you may be able to get part of the credit.

If your income is low, you may also be able to get the BC Low Income Climate Action Tax Credit. This is a payment to help you with the carbon tax you pay. Lower-income families can get $105 per adult and $31.50 per child each year. On July 1, 2011, the credit will increase by 10%.

You are considered to be a “lower- income” if your income is $30,722 for a single person, or $35,843 for a family. (2010-2011 FIGURES

The BC Low Income Climate Action Tax Credit comes with the BC HST credit.

Are there ways to reduce taxable income?

This section describes ways in which people put away money for their future. Get some advice from a financial advisor to see what choices would be best for you.

A Registered Retirement Savings Plan or RRSP allows you to delay some of your taxes. You can open a RRSP at a bank, credit union or investment company. You can contribute to your RRSP at any time during the year. You claim the amount of your RRSP contribution as deduction on your income tax return.

The amount you can contribute is shown on the Notice of Assessment you get from the government each year after you file your taxes. By the end of February of each year, your bank, credit union, or investment company will provide you with a receipt for your RRSP contributions in the previous year. You claim the amount as a deduction on your income tax return.

You do not have to claim your whole RRSP contribution each year on your taxes. You can defer some or all of your contributions. This can be helpful if you do not have enough income in that year to make the best use of the tax deduction.

You do not have to put the full amount in each year. If you do not pay the full amount, you will have unused contribution room for the future. This means you will be able to put more money into your RRSP later on. Registered Education Savings Plan (RESP) is a special savings account that helps you save for post-secondary education. You can open a RESP at a bank, credit union or investment company. The government does not tax this money while it is in your RESP. It can grow tax free.

When the money pays for education, the money is taxed in the student’s name. Since many students have little or no other income, they can usually withdraw the money tax-free.

The Tax Free Savings Account (TFSA) helps you save for your future. You can open a TFSA at a bank or credit union or investment company. You can contribute up to $5,000 annually to a Tax Free Savings Account.

• Any money you make in this account is tax-free.
• Any money you withdraw from this account is tax-free.

This information applies to British Columbia, Canada. Last reviewed for legal accuracy by People's Law School, 2014.

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(1) The assertion of a legal right to an order or to a thing; (2) the remedy or relief sought by a party to a court proceeding.

Under the Divorce Act, either of two people who are married to one another, whether of the same or opposite genders. Under the Family Law Act, spouse includes married spouses, unmarried parties who have lived together in a marriage-like relationship for at least two years, and, for all purposes of the act other than the division of property or debt, unmarried parties who have lived together for less than two years and have had a child together. See "marriage" and "marriage-like relationship."

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In family law, the natural or adoptive father or mother of a child; may also include stepparents, depending on the circumstances and the applicable legislation; may include the donors of eggs or sperm and surrogate mothers, depending on the circumstances and the terms of any assisted reproduction agreement. See "adoptive parent," "assisted reproduction," "natural parent" and "stepparent."

A person who is younger than the legal age of majority, 19 in British Columbia. See "age of majority."

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A request to the court that it make a specific order, usually on an interim or temporary basis, also called a "chambers application" or a "motion." See also "interim application" and "relief."

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