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Income Tax & Students' Moving Expenses

If you have moved at least 40km to attend a post-secondary educational institution full time, then moving expenses may be deducted, but only from taxable scholarship or award income received in the year (most is now not taxable).  Moving expenses are a deduction from income, not a tax credit, so they save taxes at your marginal tax rate.

Moving expenses can be claimed for the move to the educational institution at the beginning of each academic period, and for the move back after a summer break. Normally, moving expenses are only an eligible deduction for a student if the move was either to or from a location within Canada.

Income Tax & Children

The Children's Fitness Tax Credit is available to individuals for the registration and membership costs of up to $500 per child, not indexed for inflation.  The tax credit is available for prescribed programs of physical activity for their children who are under 16 years of age at the beginning of the taxation year.

The tax credit may be claimed by either spouse, or shared between them. Any costs which qualify as child care costs must first be claimed as child care costs, with the remainder of eligible costs then claimed through the fitness credit.


Work-From-Home Tax Deductions

Do you work from home? You can deduct part of your maintenance costs such as heat, home insurance, electricity, and cleaning materials. You can also deduct part of your property taxes and mortgage interest.

Contact me now to take advantage of this and any other deductions you may qualify for. Accurate & affordable tax service for all Albertans. Most personal returns are completed and efiled in a day.


~7 Mistakes That Could Trigger An Audit~


FORGOTTEN T SLIP:


You are the boss of your income and CRA wants to know every nickel you?ve earned -- even if you don?t have a T slip. CRA has one of those lightning fast matching programs that will zero in on you if an employer has filed one and you don?t report it. And if you fail to report income from a Tslip twice in two years the penalties could be substantial.


CLAIMING REGULARLY REVIEWED CREDITS:


Claiming moving expense credits and tuition transfers between family members are top of the CRA?s let?s-take-second-look list. Just make sure you keep your moving receipts and the signed T2202A form to back up the tuition transfer.


INCORRECT SUPPORT CREDIT CLAIMS:


Filling out line 220 is likely to give you a free pass to a CRA review because support payments for children are deductible only if your agreement was dated before May 1, 1997. And if you are supporting a spouse or commonlaw partner the agreement or court order must be filed with the CRA.


HOBBY OR BUSINESS:


Growing shiitake mushrooms in your basement rec room may be a whale of fun, but creating income-reducing losses could get you into trouble. If there is no reasonable expectation of a profit from your hobby and you claim years of losses, expect an auditor to come knocking at your door.


OUT OF THE ORDINARY:


If you claim 50 per cent of your home expenses and 95 per cent of your car expenses for business use, chances are you will trigger an audit. Be reasonable, truthful and, when it comes to auto expenses, keep a log book.


HIGH LIFE ON LOW INCOME:


Few taxpayers have ever heard of a net worth assessment but the CRA can conduct this if they suspect the income you've claimed is covering up under-the-table work. The CRA actually has a snitch line and if you have annoyed someone who knows your income doesn?t match your lifestyle you may find yourself with a lot of explaining to do.


THE CHEATIN? HABIT:


If you?ve been a little less than honest in the past, and been caught, the CRA is more likely to circle back for a repeat review.


BONUS TIP:


As always, honesty is the best policy on the tax front -- and keep those receipts for seven years, just in case.