It’s that time of the year again; tax season has begun, bringing with it a number of changes for the 2016 tax year. CPABC has compiled a series of tax tips to help you navigate the changes, save time, and save money. To get you started, here are 4 general filing tips:
1. How much tax do I have to pay?
Find out how much tax you have to pay based on your annual income. For the 2016 tax year, the federal income tax brackets have changed. Be sure to check them out before filing your income tax return. To reduce your taxes, check to see if you are eligible for any tax credits or tax deduction measures.
2. What is the deadline for filing my personal income tax return?
The deadline for filing personal income tax returns and paying any taxes owing is Monday, May 1, 2017 for the 2016 tax year. However, if you are self-employed, the filing deadline for you (and your spouse or common-law partner) is extended to Thursday, June 15, 2017. Make sure you pay your taxes by May 1 to avoid arrears interest charges. If you owe taxes and your return is late, you will be assessed a penalty and interest on the unpaid balance of taxes due.
3. I have unused tax credits from my 2015 tax return, can I apply them in my tax return this year?
If you were unable to use certain deductions or tax credits from a previous tax year, you might be able to use them for the 2016 tax year. Some common items include:
- Charitable donations: unused charitable donations may be carried forward five years;
- Tuition, education, and textbook credits: unused tuition, education, and textbook amounts may be carried forward indefinitely;
- Interest on student loans: unused student loan interest expenses may be carried forward five years; and
- Home office expenses: excess undeducted home office expenses of an employee or a self-employed individual may be carried forward indefinitely and applied against income from the same office or employer, or business.
4. Can I transfer income tax credits to my spouse?
You can transfer some income tax credits to your spouse or common-law partner. Transferable credits include the age credit, disability credit, pension income credit, your own education and tuition fee credits, and the textbook tax credit. If you are able to reduce your taxes payable to zero without using all of your available credits, you might consider transferring some of these unused credits to your spouse’s return. Don’t let your credits go to waste.
Learn more about the changes for the 2016 tax year and other tax tips with CPABC’s RRSP and Tax Tips at www.rrspandtaxtips.com.