Are you working on your taxes and find that your balance owing, or refund, is not what you were expecting? This is because your tax situation depends just as much on what has changed in your life, as it does on the changes to tax codes and rules. For example, a credit you never used to be able to get, or even one you did, may or may not be available to you now because your personal situation is different than what it was last year.
So what changed for you last year that might explain why things are different this year? Here are some of the main reasons why as a taxpayer, you might see changes in your return, year over year.
Significant Personal Life Changes
- As a married (or common law) couple, you may now have the ability to pension split on qualifying pension amounts, share medical expenses and donation contributions to the partner that could use the deduction the most.
- If you are now divorced, you are no longer able to share in pension splitting or donation and medical expense deductions. These now are only on the return of the person who paid for them. There may also be changes in terms of child care, dependant, and caregiver credits as well, based on child custody and dependants in the home.
Job Changes: if you retired, got a big promotion, or lost your job, your employment income amount may have changed significantly.
- When your income decreases, you might find that you qualify for certain benefits such as the Working Income Tax Benefit or the Canada Worker’s Benefit program or other income related refundable tax credits; your taxes owing might also decrease as well. The non-refundable tax credits you get will stretch further and lower the tax burden.
- If your income increases, you might find that the GST/HST rebate you’re used to getting is less, as is your Canada Child Benefit amount. Your amount owing for taxes might be more if you didn’t have enough taken off of your pay-cheque, or, the refund you were hoping for is less, because the non-refundable credits won’t go as far with a larger income.
Health Changes: your health or the health of someone you care for might result in an increased need for medical care or even disability support.
- When it comes to medical expenses, there are many things that the CRA will allow you to submit as an expense, including travel costs to see specialists out of your surrounding area.
- Did a loved one (or yourself) become disabled or seriously ill and are now relying on you for care (physical or financial)? Depending upon the illness (or infirmity), they (or you) may qualify for the disability tax credit, an eligible dependant amount, or the Canada caregiver credit.
Education: did you, or your child, head off to post-secondary school last year? If so, the federal tuition credit will now be something to help you lower your taxes owing. If your child does not require their full deduction, they can transfer up to $5,000 of it to you (make sure they go online and get their T2202A form from the school). Also, depending on the province you live in, you may be entitled to other education credits for the provincial portion of your taxes.
Children & Child Care: did you have or adopt a child last year? Congratulations, what an exciting and busy time!
- When it is time to go back to work (or full-time school), or it’s time for summer camp, parents may qualify for child care expense deductions to help offset the costs of child care.
- Based on your income, you might now also qualify for the Canada Child Benefit, which is a tax free payment for parents with children under the age of 18.
Relocation: did your job promotion or university education require you to move? If you moved to be at least 40 kms closer to your new job or school, you may be eligible to claim your moving expenses.
All of these changes can seem a little confusing or daunting to deal with, but with the right information ahead of time, you can still navigate the tax waters to file your return with TurboTax.
However, if you feel a bit overwhelmed, consider TurboTax Live Assist & Review and get unlimited help and advice as you do your taxes, plus a final review before you file. Or, choose TurboTax Live Full Service and have one of our tax experts do you return from start to finish.
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Disability Tax Credit Transfer
Accounting educator, business strategist, and advisor.
Turbo Tax Canada blog editor and writer.
Susan has been an accounting professional for over 20 years, and has been working with businesses and individuals and their taxes for the past 12. Education is a passion for Susan, and when not writing or talking about tax for TurboTax Canada, she can be found speaking at events, teaching at Mohawk College, and working with many businesses and entrepreneurs through her own accounting advisory practice. Susan is known to be approachable but pulls no punches when it comes to the reality of business finance and taxes.