With the baby boomers at or near retirement it’s nice to know that the government has some extra tax credits available.
If you’re not thinking about retirement yet you probably know someone who is. Be sure to share this information with them so they don’t miss out on any of these tax savings or tax credits.
Canadians aged 65 or older can claim the age amount, a non-refundable tax credit. The age amount has increased by $1,654 since 2006, and was claimed by almost 5 million seniors in 2012.
In 2012, more than 4.5 million people claimed the non-refundable pension income amount. The maximum amount of pension income that may be claimed in calculating the 15% non-refundable credit doubled in 2006 from $1,000 to $2,000.
Pension income splitting was introduced by the Harper Government in 2007 and provides a means for seniors to save money.
Splitting pension income gives eligible Canadians the opportunity to split up to 50% of their eligible pension income with their spouse or common-law partner, reducing their overall family tax burden.
More than 1 million couples took advantage of pension income splitting in 2012.
Seniors with low-to-modest incomes can also claim the Goods and Services Tax/Harmonized Sales Tax (GST/HST) Credit to help reduce the cost of making GST and HST payments.
The Public Transit Amount is another opportunity for seniors to increase their savings at tax time.
Seniors can also claim medical expenses, such as hearing aids, pacemakers, hospital services, and nursing home costs, on their income tax and benefit return to get tax relief.
Introduced in 2009, the Tax-Free Savings Account (TFSA) provides seniors with a tax-efficient savings vehicle to help meet ongoing savings needs. The Harper Government has also increased the age limit for contributing to a Registered Retirement Savings Plans (RRSPs) from 69 to 71.
Seniors may also be eligible to take advantage of the Community Volunteer Income Tax Program (CVITP). It’s a collaboration between community organizations and the Canada Revenue Agency.
The CVITP helps prepare tax returns for individuals who have low income and a simple tax situation. Individuals who file a return may be entitled to certain credits and benefits. Volunteer tax preparation clinics are generally offered from February to April across Canada.