The $$$ Maker Report

Bi-Monthly Investments Newsletter by Karl Jung, CLU JAN/FEB 2001

Gibsons office: (604) 886-2691 Cellular: (604) 760-9899 Fax: (604) 886-3014 kjung@dccnet.com

Utilizing Tax Credits

As we approach tax season it is important to keep in mind the non-refundable tax credits available to all tax filers.

The majority of the tax credits are non-refundable meaning they do not have value if they are greater than the tax actually paid. Here are a few of the more common credits available for 2000. The October 2000 budget will be adjusting these numbers for 2001 if enacted as proposed.

Basic Personal Exemption

This is the most basic of all the credits and it is available to every person who files a tax return.

The first $7,231 of income is tax-exempt making it that much more important for families to income split if possible.

Spousal Amount

If your spouse has no other income, you may claim an additional amount of $6,754.

After the spouse's income reaches $614 the credit is claw backed, dollar for dollar.

Common law couples also qualify for this credit.

Equivalent-to-Spouse Amount

Single parents can use this credit for dependent children under the age of 18, since they are not eligible for the Spousal Amount.

Dependants

Should you have a child who is mentally or physically disabled you can claim up to $2,386.

This assumes the child has income less than $4,845.

Age Amount

For those 65 and older you can claim an additional $3,531.

This amount will be reduced if your income exceeds $26,284.

Caregiver Credits

This can be claimed if you have a physically disabled child over the age of 17 and also if you are providing in-home care for your parents or other relative. The maximum to be claimed is $2,353 but this will be reduced if the relative's income exceeds $11,500.

Disability Amount

$4,293 can be claimed for severe and prolonged disabilities that will last at least 12 months.

Pension Tax Credit

For pension income derived from an Annuity, RRIF or a company Pension Plan, the first $1,000 is usually free of tax. Government benefits are not eligible, and you must be at least 65 years of age.

Tuition & Education Amounts

Most tuition fees qualify as long as they are least $100. A credit is available based on full time and part time enrollment, and provisions are made for those physically or mentally disabled.

Student Loan Interest

The interest on a qualifying student loan can be claimed in the year it was paid or in any of following five years.

CPP and Employment Insurance Amounts

Premiums to these two government plans can be claimed up to their annual maximum.

Medical Expenses

Amounts that are the lower of $1,637 or exceed 3% of your net income are eligible.

Receipts from all family members can be claimed on one tax return and can cover any 12-month period you specify.

Receipts for user fees from chiropractors, massage therapist, doctors and nurses, hospitals or other recognized health care providers usually qualify.

Premiums paid for private health insurance coverage such as extended medical and dental from your employer's group policy are eligible. Your government public health plan is not included. In British Columbia this would mean the $72 monthly family fee to MSP, and this cannot be used.

Medical related travel costs such as ferries and the cost of having a caregiver travel with you are allowable.

Eyeglasses, hearing aids, artificial limbs, prescription drugs, wheelchairs, dentures and certain other medical devices can also be included.

Index

kjung@dccnet.com