2011 Canadian Tax 2 – Claiming Medical Expenses

Until now, when you filed your Canadian Tax return, you were able to claim tax credits for medical expenses for yourself, your spouse or common-law partner, children under 18 and ‘certain other dependants’, such as children older than 18 years of age, grandchildren, grandparents, siblings, aunt, uncle, niece or nephew who were resident of Canada at any time of the year.

 

Changes in the Canadian Tax Return for 2011

For the ‘other dependents’, whose claims go into Line 331, there was a cap of 10,000 per eligible dependant.

Beginning 2011 tax year, this cap has been removed.

 

Claims for Immediate Family: What Can Be Claimed Under Line 330

These are claims for yourself, your spouse or common law partner, and your or your spouse/common law partner’s children born after 1994.

You can claim eligible medical expenses paid in any 12-month period ending in 2011 and not claimed for 2010. Generally, you can claim all amounts paid, even if they were not paid in Canada. Your total expenses have to be more than 3% of your and your family’s This goes in Line 330.

 

Claims for ‘Other Dependents’ – Line 331.

These are for the dependents mentioned at the top of this article. The expenses have to be the lesser of the two – 3% of the dependent’s net income or $ 2,052.00

 

Notes
On the return for a person who died in 2011, a claim can be made for expenses paid in any 24-month period that includes the date of death, if they were not claimed for any other year.

If you are claiming expenses paid for a dependant who died in the year, these amounts can be claimed for any 24-month period that includes the date of death, if they were not claimed for any other year.

 

Some Eligible Medical Expenses You Can Claim:

  • payments to a medical doctor, dentist, nurse, or certain other medical professionals or to a public or licensed private hospital;
  • premiums paid to private health services plans (other than those paid by an employer);
  • premiums paid under a provincial or territorial prescription drug plan, such as the Quebec Prescription Drug Insurance Plan and the Nova Scotia Seniors’ Pharmacare Program (amounts or premiums paid to provincial or territorial government medical or hospitalization plans are not eligible); and
  • payments for artificial limbs, wheelchairs, crutches, hearing aids, prescription eyeglasses or contact lenses, dentures, pacemakers, prescription drugs, and certain prescription medical devices.

 Reimbursement of an Eligible Expense

You can only claim the part of an expense for which you have not been or will not be reimbursed. However, you can claim the full expense if the reimbursement is included in your income, such as a benefit shown on a T4 slip, and you did not deduct the reimbursement anywhere else on your return.

 Travel Expenses and Meal Allowances

If medical treatment is not available to you within 40 kilometres of your home, you may be able to claim the cost of your transportation to get the treatment somewhere else.

  • If you are planning to use the simplified system to calculate travel costs, this is what you can claim a credit for:
    • Alberta – 53 c/km;
    • British Columbia 52 c/km;
    • Manitoba – 49 c/km;
    • New Brunswick 52 c/k;
    • Newfoundland and Labrador 55 c/km;
    • Northwest Territories 615 c/km;
    • Nova Scotia 53 c/k;
    • Nunavut 61.5 c/km;
    • Ontario 57 c/km;
    • Prince Edward Island 52 c/km;
    • Quebec 59 c/km;
    • Saskatchewan 47.5 c/km;
    • Yukon 63.5 c/km.

 

  • While you are not required to retain receipts, as in the case if you are filing a detailed account, you will still need to log your costs and travels.
  • If you using a simplified system to calculate meal costs, you can claim $ 17.00 per meal, with a maximum of $ 51.00 per day.
  • If you had to travel at least 80 kilometres from your home, you can deduct accommodation and meal expenses in addition to your transportation expenses.

For more information about medical expenses, go to Canada Revenue Agency’s Line 330 – Medical expenses for self, spouse or common-law partner, and your dependent children born in 1994 or later page, or use Info-Tax, one of our TIPS services. You can also see Guide RC4064, Medical and Disability-Related Information, and Interpretation Bulletin IT-519, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction.

Tax Tip
Compare the result with the amount your spouse or common-law partner would be allowed. It may be better for the spouse or common-law partner with the lower net income (line 236) to claim the allowable medical expenses. You can make whichever claim you prefer.

The following example, taken off Canada Revenue Agency (CRA) Site, shows you how to calculate your claim under Line 330.

Example
Richard and his wife Pauline have two children.  They have reviewed their medical bills and decided that the 12-month period ending in 2011 for which they will calculate their claim is July 1, 2010, through June 30, 2011. They incurred the following expenses:

Richard $1,500
Pauline $1,000
Jen (their 16-year-old daughter) $1,800
Rob (their 19-year-old son) $1,000
Total medical expenses $5,300
  • The total allowable expenses for 2011 are $4,300, which will be entered on line 330. As Rob is older than 18 years of age, his expenses will be claimed on line 331.
  • Pauline’s net income on line 236 of her return is $32,000. She calculates 3% of that amount as $960. Because the result is less than $2,052, she enters $960 on the line below line 330 on Schedule 1 and subtracts it from $4,300. The difference is $3,340, which is the amount (A) above line 331.
  • Richard’s net income on line 236 of his return is $48,000. He calculates 3% of that amount as $1,440. Because the result is less than $2,052, he enters $1,440 on the line below line 330 and subtracts it from $4,300. The difference is $2,860.
  • In this case, Pauline and Richard have found it is better for Pauline to claim all the expenses for them and their daughter Jen.

Supporting documents for 2011 Tax

  • If you are filing electronically, keep all your documents in case CRA asks to see them at a later date.
  • If you are filing a paper return, attach all documents for yourself and documents for the person(s) you are claiming (other than for premiums paid to a health services plan, which you should keep in case CRA ask to see them).
  • Receipts must show the name of the company or individual to whom the expense was paid.
  • Receipts for attendant care or therapy paid to an individual should also show the individual’s social insurance number.

You may be claiming expenses that would be allowable only for a patient who qualified for the disability amount. For information about the disability amount, see Line 316.

 

 

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2011 Canadian Tax — Children’s Art Tax Credit

The 2011 Tax filing time is approaching and SmartCanadian will bring you some tips on what has changed compared to the previous years.

One of the new additions from 2011 is the ‘Children’s Art Tax Credit’ (CATC).

You can claim a maximum of 500 dollars paid as refundable tax credit per child off the fees paid in 2011 related to the cost of registration or membership of your, your spouse’s or your common-law partner’s child to develop ‘artistic, cultural, recreational or developmental activity’.

Programs that can be claimed:

Language Programs, Public Speaking, Chess, Music, Scouting, Girl Guides, Crafts, Painting, Drama, Photography, Pottery and Tutoring.

 

Criteria for the Children’s Art Tax Credit (CATC)

  • The child must have been under 16, or under 18 if he or she receives Disability Tax Credit, at the beginning of 2011.
  • The Program does not fall under a category for which a claim can be made under the Federal Children’s Fitness Amount.
  • The Program is not part of a school curriculum.
  • It has to be ongoing, with sessions at least once a week and lasting a minimum of eight weeks, or a minimum of five consecutive days.
  • It has to be supervised, and
  • It has to be suitable for children.

 

CATC Application Should Meet At least One of the Following Criteria:

  • The program should contribute to the development of creative skills or expertise in an artistic or cultural activity;
  • The program should provide a substantial focus on wilderness and the natural environment;
  • The program should help the child develop and use particular intellectual skills;
  • It should include structured interaction among children where supervisors teach or help children develop interpersonal skills; or
  • It should provide enrichment or tutoring in academic subjects.

 

Costs Not Covered for CATC

  • Traveling, accommodation and food.
  • If the program is provided by a person under 18, or by the spouse of the tax-file.

 

CATC Receipt Should Include Following:

  • providing organization’s name and address
  • name of the eligible program
  • amount received, date received, and amount eligible for the CATC
  • full name of the payer
  • full name of the child, and the child’s year of birth, and
  • authorized signature (not necessary for electronically generated receipts)

For more information: check the appropriate Canada Revenue Agency (CRA) page.

More on the Children’s Arts Tax Credit (CATC) from CRA

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Free Goodies Non-Taxable

We all love when we win free goodies at the stores.

But do you know that in Ontario, they also come tax-free?

With the new Harmonized Sales Tax (HST), replacing the federal General Services Tax (GST) and the Provincial Services Tax (PST) which were levied separately, there is some confusion about what are taxed.

Yes, this is something even some stores forget; for example, if you have a coupon which provides you something for free, then that product is not taxable under Ontario’s tax law.

 

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More On Aeroplan Miles

Aeroplan is running a special conversion promotion program until December 12th.

The program allows your points from other, partner programs to be converted into Aeroplan Airmiles.

The Partner Programs include Starwood Preferred Guest (SPG), Marriott Rewards, Hilton Honors, Points.com and Hertz.

Aeroplan is also offering bonus Aeroplan miles when you convert. For exazmple, if you convert 5,000 Aeroplan Miles or more, you will get 1,000 Aeroplan

Aeroplan

Image via Wikipedia

Miles.

But is it really worth to collect all those points? Is it worth to buy, for example, a TV set doing your own research and at the store offering the best discount, or through the Aeroplan Miles?

Above all, collecting points is a science. You collect the cheapest way, so that when you have enough of them, whatever you buy is a bonus.

For example, gas prices do not vary a lot from gas company to company. So if will not be a bad bargain to collect points there, and then if you use the collection to buy something, it is a bonus.

The Toronto Star’s Jennifer Stewart has an interesting column on Aeroplan Miles.

 

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Savings Tips During Holiday Season

It is the most important holiday time and also the year-end time.

As we start buying gifts for others and ourselves, here are some ways to save money.

 

  • Look for Specials

For example, this week The Superstore is offering tax-free shopping.

Shoppers Drug Mart this weekend is offering a special program on its Optimum Points. Usually, it offers 170 dollars value for 95,000 points but this weekend it will be increased to 250 dollars.

  • Price Match:

Simply, go through the flyers and see who is offering the best price. For example, if Wal Mart is offering the lowest price for the type of kitchen towels you want, get the flyer and show it to a store that accepts Price Match. This way, you don’t have to go to dozens of stores to do your shopping.

Some stores even offer a percentage discount.

  •  Tech Help

Also, when I bought a point-and-shoot digital camera, from the store itself I used my smart phone to check prices at other stores. The alternate is using bar code scanning apps.

 

  • Not All SALES Are Same

Beware of the ‘steep prices’ offers. Some times the prices are not that low, so check around.

 

So take a look at the flyers, and use smart technology to get the best.

 

 

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MBNA’s New Smart Cash World MasterCard

MBNA is offering a new card, the MBNA Smart Cash World MasterCard, with some great features.

It appears at the moment, it is only being offered to those having an MBNA credit card, and is offered for no extra fee.

The card offers, like the MBNA Smart Cash card, 5% cash back on qualifying net retail gas and grocery purchases for the first six months, and then three-percent cash back thereafter.

The holder also gets a 1% cash back on all other purchases.

 Some Additional Goodies

You can receive complimentary concierge services when you make travel, dinner or event arrangements.

Access to ‘exclusive’ MasterCard offers.

 

 

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PC Financial’s New MasterCard

President’s Choice Financial is offering a special MasterCard for some of its clients, but there is some controversy about it.

The new card offers 20 PC Points, instead of 10 PC Points, for every dollar spent at the various chains belonging to the Loblaws. The cards are being offered without the negative option billing, which is controversial.

The Toronto Star’s Columnist Ellen Roseman has an essay on this.

 More on Canadian government’s move against negative option billing.

 

 

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Canada Launches Online Consultations

 

The Canadian government has launched an online consultation to decide on the future course of the country’s immigration numbers.

Citizenship and Immigration Canada (CIC), the federal department that is in charge of immigration, launched the online consultation to request public opinion on the “appropriate level of immigration and the most suitable mix between economic, family class and protected persons”, a ministry statement said.

The online consultation is part of the consultation process the ministry has started on future immigration. The government has already held consultations in a number of Canadian cities including Toronto and Vancouver, and officials say more sessions might be held in coming weeks and months.

It is not just the mix up between family class and economy classes of migrant the government is interested in.

There is also a debate on what type of professionals Canada needs – highly qualified engineers and doctors or skilled trades-people such as electricians and plumbers.

There seems also to be a debate about whether immigrants should be younger in which case they would contribute to the labour force longer.

More than 1,600 people have already signed up to complete the questionnaire. It is available at the following link: http://www.cic.gc.ca/english/department/consultations/index.asp .

 

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CAA’s New MasterCards

The Canadian Automobile Association (CAA) South Central Ontario division  is offering three types of MasterCards.

 

CAA Premium MasterCard.

Benefits:

  • It gives you 1.5% CAA dollars for every purchase.
  • Car rental, collision/damage waiver, flight delay and trip interruption protection.
  • Purchase Assurance & Extended Warranty. This covers you against theft, loss or damage of your purchases for up to 90 days after the transaction date, provided you use your CAA MasterCard to make the purchase. You are also covered against delayed baggage.
  • Common Carrier travel accident insurance.

Cost: $99.00 annually

 

CAA Low Rate MasterCard

Benefits

  • 0.5-percent CAA dollars with every purchase
  • Purchase Assurance and Extended Warranty
  • Common Carrier Travel Accident Insurance

Cost: $29.00 annually

 

CAA No Fee MasterCard

Benefits

  • 1.0-percent CAA dollars with every purchase
  • Car rental collision/damage waiver
  • Baggage delay
  • Purchasee Assurance and Extended.
  • Common Carrier Travel Accident Insurance

Cost: –

 

For more info, go to CAA’s MasterCard site.

And if you apply before Sep. 15, 2011, you will receive 50 bonus CAA dollars, if you make your purchase before Dec. 31, 2011.

That alone will cover your annual basic CAA membership.

One CAA $ equals 1 C$.

So, if you want to book a hotel room for C$ 100.00, you will need to spend about C$ 7,000.00 with a Premium MasterCard.

 

 

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Aeroplan Miles Transferable If Family Member Dies

Aeroplan,  the Canada-based frequent flyer program, is reportedly making a major change to benefit close family members of a deceased person from its Frequent Flyer Points System.

Accoridng to the Toronto Star, under new guidelines, close family members can transfer the deceased relative’s Aeroplan Miles by paying a processing fee of $ 30.00 plus taxes.

Until now, the relatives who wanted to transfer their deceased relative’s Aeroplan Miles had to pay at the rate of 1 cent per mile plus the processing fee.

This is the statement quoted by The Star.

“The spouse of the deceased Aeroplan member, or if there is no spouse, the surviving residual heir(s) of the estate, will be able to redeem the outstanding balance of the deceased member for a period 12 months from the declaration of death by providing supporting documentation (by mail or email) and paying a processing fee of $30 (plus taxes).”

However, the newspaper says the old system still might apply in some cases.

The full article, Aeroplan Points Now Transferable When A Family Member Dies.

 

 

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