PERSONAL TAX INFORMATION

Tax Advantages of Donating to Charity

Generous tax incentives have been created to encourage gifts by individuals and corporations to registered charities.

A registered charity is an organization, corporation, or trust that has been registered as a charity by the Minister of National Revenue for the purposes of the Income Tax Act.  It must be either created or established in Canada and be resident in Canada.

A registered charity can issue official tax receipts for the gifts received from individual or corporate donors.

Individual donors will receive a federal tax credit equal to 16% of the first $200 you give to registered charities in a taxation year.  You will also receive a tax credit equal to 29% for donation amounts that exceed that $200.  The more you give, the greater the tax credit.

You apply the credit directly against the tax you owe, instead of deducting it from your taxable income.

The charitable tax credit also reduces surtaxes and provincial or territorial taxes.

(From Revenue Canada brochure RC4142)

Equivalent-to spouse amount

Most taxpayers are familiar with the spousal amount ($7505 Federal & $7585 Provincial for 2006) but a lot of people don't realize that there is a similar credit for single, separated and divorced people who support a relative who lives with them. This could apply to a single mother with kids at home, or someone who supports an elderly parent. In order for you to qualify for the amount, the person you support must be related to you and must have income below $7505. Children must be under 18 at some time during the tax year, unless they are mentally or physically infirm.

Make sure you deduct your safety deposit box fees

One of the deductions that is often missed is the fee for your safety deposit box.  These fees can be deducted on your personal tax return under, "carrying charges and interest expense".

Claim medical expenses on the tax return of the spouse with the lowest income

To determine the allowable deduction for medical expenses, you have to deduct from your total medical expenses (for 2006) the lesser of $1,844 or 3% of net income.  Thus, if net income is $20,000, you could deduct all medical expenses exceeding $600.

You can claim medical expenses for any 12-month period ending in the tax year, and not claimed in a previous tax year.  Thus, if you had insufficient medical expenses for a claim for the prior year, you may be able to combine some of them with the current year's expenses to make a claim. 

You may be eligible for the GST/HST credit

If you have low or modest income, you may be eligible for the goods and services tax/harmonized sales tax (GST/HST) credit. This credit helps offset part of the GST/HST that you pay.

You have to apply for the GST/HST credit every year by filing an income tax return and checking the "Yes" box on page 1. You must be a resident of Canada and at least 19 years of age before the Canada Revenue Agency (CRA) starts payments. If you are under 19, you can only receive a payment if you have a spouse or common-law partner or you are a parent.

If you will turn 19 before April 1, 2006, be sure to apply now for your GST/HST credit by filing a 2005 income tax return and checking the "Yes" box in the application area on page 1. You can apply for the GST/HST credit before you are 19 years old, but you have to wait until you turn 19 to receive the payments.

CRA will let you know whether or not you qualify in July. The payments are based on the 2005 return and will be issued in July and October  2006, and January and April 2007.

PROBATE FEES IN BC

Probate Fee Calculation and Assessment in BC

Probate fees can be minimized if registered assets (including vehicles) are held in joint names, and if insurance policies and RRSPs are left to named beneficiaries, not to the estate