SOURCE: THE STAR
My 78-year-old mother is incredibly organized, particularly when it comes to her finances.
She keeps all of her income tax receipts in one folder, along with information about her investments, property taxes, and her medical expenses. That’s a huge help when it comes to income tax time.
If you’re caring for an aging parent, or helping a senior or anyone over 50 with his or her taxes, here are some tips:
* If your parent or parents are 65 or over, have less than $18,906 in income and are living with you, you can claim the caregiver amount. You can also claim parents under the age of 65 if they are dependent on you due to an infirmity.
* The federal caregiver amount is $4,282 for each dependent, and that results in $640 in tax savings. There are also provincial caregiver amounts that will add to your savings.
Keep in mind that your parents must live with you to claim this credit. Sending money to support them does not quality.
However, if you pay for your parents’ nursing home fees, you may be able to claim them as a medical expense.
Do you have a parent who qualifies for the Disability Tax Credit? The disability must make it extremely difficult or time-consuming to carry out basic activities of daily living, despite undergoing therapy and using appropriate devices and medications. The impairment must last or be expected to last 12 months and severely restrict your parent’s ability to see, walk, speak, hear or perform personal care activities or affect your mental capacity to manage your personal affairs.
You need to be approved by the Canada Revenue Agency before you can claim the Disability Tax Credit on your tax return. Your doctor needs to complete a T2201 (Disability Tax Credit certificate) and send it to the CRA.
Seniors are allowed to split up to half of their eligible pension income with a spouse or common-law partner.
Make sure that you file a return so any senior receiving the Guaranteed Income Supplement will not have those benefits interrupted.
Pensions from foreign countries may be subject to special tax treatment under the terms of a tax treaty. Check with a tax professional to find out if the pension from a foreign source is taxable in Canada.
Medical expenses can add up. The list of eligible expenses is long and ranges from air conditions for those who have a chronic severe condition and elastic support hose to insulin and renovation expenses. In many cases, a prescription is required. Check out the list here. These are based on income, so the lower income spouse should claim them.