Once again we present BCRTA members a guide to help you make the most of your annual tax return. Of course BCRTA does not offer income tax advice, but here are some common issues and deductions to keep in mind. Working through this list will help you complete your return to your maximum advantage. Our annual check list is put together by our Pensions and Benefits Committee.
So let’s get started!
Eligible Medical Deductions
Any eligible medical costs that you pay that exceed 3% of your net income can be deducted when you complete your income tax return this year. A couple usually should combine all medical expenses on one tax return – usually the one with the lowest income – to gain the highest value deduction.
- Eligible medical expenses are those payments made by you or your spouse that were not fully reimbursed by an insurance plan. Some examples that you should explore:
- Prescribed medications
- Payments to a medical doctor, dentist, and most paramedical service providers such as physiotherapists, chiropractors, massage therapy, etc.See CRA’s complete list of medical expenses that may be eligible for tax deductions at https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4065/medical-expenses-2016.html.
- Premiums that you paid for any health service plan other than MSP.
- If you participate in our Johnson Insurance with Prestige Travel Plan you should receive a letter that itemizes your claimable premiums as well as your claims history that shows your eligible deduction. If you don’t see this by March 16, follow up with them.
- If you participate in MEDOC and have requested a letter that shows the eligible amount of premiums in a previous year you should receive it soon. This year’s tax notices are scheduled to be sent out by February 19th. If you are a MEDOC participant but have never requested this notice, call Johnson at 1.800.563.0677 and you will automatically receive one every year.
- If you are signed up for Extended Health Coverage with Green Shield and premiums are deducted from your Teacher’s Pension Plan payments, GSC premiums are always shown in Box 135 of the T4 you received from TPP. See more about tracking GSC claims at https://www.bcrta.ca/gscclaims
BC Recovery Benefit and the one-time payment for people receiving Old Age Security and Guaranteed Income Supplement.
Both the BC Recovery Benefit ($500/person or $1,000/family) and the Federal one-time payment for seniors ($300/person receiving OAS plus $200/person receiving GIS) are tax-free payments. You do not need to report them on your income tax form.
The New Canada Caregiver Credit
The Canada Caregiver Credit (CCC) is a non-refundable tax credit that may be available to you if you support a spouse, common-law partner or a dependant with a physical or mental impairment. For detailed information visit https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/canada-caregiver-amount.html.
Disability Tax Credit
The disability tax credit (DTC) is a non-refundable tax credit that helps persons with disabilities or their supporting persons reduce the amount of income tax they pay. For detailed information visit https://www.canada.ca/en/revenue-agency/services/tax/individuals/segments/tax-credits-deductions-persons-disabilities/information-medical-practitioners/eligibility-criteria-disability-tax-credit.html.
Age tax Credit
If you were 65 or older on Dec. 31, 2020 you may claim an age tax credit. The credit is geared to income with the maximum discount for those whose income is less than $$38,508, and the credit is gradually eliminated as your income increases. There is a corresponding provincial tax credit as well. This deduction can also be transferred to a spouse. For detailed information visit https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-301-amount.html.
Charitable Donations
Tax credits are available for donations made to registered charities. In a spousal relationship, the claim can be split or attributed to either person to provide the greatest tax advantage. For detailed information see https://www.canada.ca/en/revenue-agency/services/charities-giving/giving-charity-information-donors/claiming-charitable-tax-credits.html.
Political contributions
Tax credits are available for any contributions you and your spouse made to registered federal political parties or British Columbia political parties. For more information about the federal credit visit https://www.canada.ca/en/services/taxes/income-tax.html.
For British Columbia credits go to https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/provincial-territorial-corporation-tax/british-columbia-provincial-corporation-tax/british-columbia-political-contribution-tax-credit.html.
Payment Options
If you are among the 16% of Canadians that owe tax after filing, you now can pay using a credit card, PayPal, or Interac e-Transfer (See Payments to the Canada Revenue Agency on the CRA website).
Sign up for Direct Deposit with your Revenue Canada account to receive your refund deposited into your bank account. Log-in or register at www.tpsgc-pwgsc.gc.ca
Other Options
You can now also file a return electronically on CRA’s website. You will have to register on the CRA website MY Account service to do this. Once you have registered, you can take advantage of CRA’s “Auto-fill My Return” Feature.
Need Help Filing Your Return?
There are several low-cost or free tax filing programs available on-line. Search for “on-line tax filing.” A listing provided by CRA can be found by visiting https://www.canada.ca/en/revenue-agency/services/tax/individuals/community-volunteer-income-tax-program.html.
There are also many volunteer run tax preparation clinics at Seniors’ and Community Centers around the province.
CRA Scams
We always remind members that there are unfortunately a lot of fraudsters who try to take advantage of seniors by pretending to be a collection agency or government official.
But by being alert to fraud, you won’t fall for any phone calls, e-mails or letters pretending to be from the Canadian Revenue Agency. If you receive one of these contacts, it is important to provide NO information. Instead, always contact CRA directly by calling 1-800-959-8281 or check your CRA My Account on-line.
