It is tax time again! Are you claiming all possible tax deductions and credits?

The Government of Canada and the provincial governments have over the years introduced a wide range of income tax relief measures to help Canadians save on their taxes. There are measures designed to benefit people and families from all walks of life.

These measures are either in the form of tax deductions or tax credits. Tax Deductions are deducted from total income to arrive at taxable income. Examples of Tax Deductions include: childcare expenses, employment expenses, moving expenses, RRSP contributions etc.

Tax credits on the other hand are deducted from income tax otherwise payable. Tax credits are either non-refundable or refundable. Examples of tax credits include: Basic personal amount, Age amount, Spouse or common-law partner amount, Amount for an eligible dependant, Amount for infirm dependants age 18 or older, CPP or QPP contributions through employment or self employment, Employment Insurance premiums, Adoption expenses, Pension income amount, Caregiver amount, Disability amount (for self) or transferred from a dependant, Interest paid on your student loans, Tuition, education, and textbook amounts for self, or transferred from a child, Medical expenses for self, spouse and your dependent children born in 1992 or later, Donations and gifts, Canada employment amount, Public transit amount, Children's fitness amount, Amount for children born in 1992 or later, Home renovation expenses, Home buyers’ amount etc.

Some of the new and famous measures include:

Working Income Tax Benefit (WITB)

The Working Income Tax Benefit (WITB) is a refundable tax credit intended to provide tax relief for eligible working low income individuals and families who are already in the workforce and to encourage other Canadians to enter the workforce.

Home Renovation Tax Credit (HRTC)

Only available for the 2009 tax year.

The Home Renovation Tax Credit is a non-refundable tax credit based on eligible expenses for improvements to your house, condo or cottage. It can be claimed on your 2009 income tax return. It applies to work performed or goods acquired after January 27, 2009, and before February 1, 2010 under an agreement entered into after January 27, 2009. The HRTC applies to eligible expenses of more than $1,000, but not more than $10,000, resulting in a maximum non-refundable tax credit of $1,350 [($10,000 − $1,000) × 15%].

Home Buyers' Amount

You can claim an amount of $5,000 for the Home Buyers' Tax Credit (HBTC) if both of the following apply:

you or your spouse acquire a qualifying home after January 27, 2009, (closing after this date); and
you did not live in another home owned by you or your spouse in the year of acquisition or any of the four preceding years (first-time home buyer).

Children's Fitness Amount

You may be able to claim up to $500 per child for the fees paid in 2009 that relate to the cost of registering your or your spouse's child in a prescribed program of physical activity.

Public Transit Amount

You can claim the full amount paid for a public transit passes, or for the cost of passes for multiple transit systems during the year. This includes the cost of monthly passes or of longer duration such as an annual pass for travel on public transit. These passes must permit unlimited travel within Canada on local buses, streetcars, subways, commuter trains or buses or local ferries.

Deduction for Tools

If you were a tradesperson in 2009, you may claim up to $ 500.00 as tradesperson's tools deduction for the cost of eligible tools you bought in 2009:

Pension Income Splitting

You (the Pensioner) may be able to jointly elect with your spouse (the Pension Transferee) to split your eligible pension income if you meet all of the requirements.

Registered Retirement Savings Plan (RRSP)

An RRSP is a retirement plan that we register and that you or your spouse establish and contribute to. Deductible RRSP contributions can be used to reduce your tax. Any income you earn in the RRSP is usually exempt from tax for the time the funds remain in the plan. However, you generally have to pay tax when you cash in, make withdrawals, or receive payments from the plan.

Home Buyers' Plan (HBP)

The Home Buyers' Plan (HBP) is a program that allows you to withdraw up to $25,000 (after January 27, 2009), from your registered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability .

Lifelong Learning Plan

The Lifelong Learning Plan (LLP) allows you to withdraw amounts from RRSPs to finance training or education for you or your spouse. You cannot use the RRSP funds to finance your children's training or education, or the training or education of your spouse’s children.

Registered Retirement Income Fund (RRIF)

A RRIF is a retirement fund that you establish and that we register in order to provide income during your retirement. You transfer property into a RRIF from a Registered Retirement Savings Plan (RRSP), Registered Pension Plan (RPP) or from another RRIF.

Tax-Free Savings Account (TFSA) for Individuals

A Tax-Free Savings Account is a new way for residents of Canada to set money aside, tax-free, throughout their lifetimes. Contributions to a TFSA and the interest on money borrowed to invest in a TFSA are not tax deductible. The income generated in the TFSA is tax-free when withdrawn.

Registered Disability Savings Plan (RDSP)

The Registered Disability Savings Plan (RDSP) helps Canadians with disabilities and their families save for the future. If you are a Canadian resident under age 60 and are eligible for the Disability Tax Credit (Disability Amount), you are eligible for an RDSP. Earnings accumulate tax-free, until you take money out of your RDSP. Parents or guardians may open an RDSP for a minor. With written permission from the holder, anyone can contribute to the RDSP.

Important dates for RRSP, RRIF, HBP, LLP and RDSP

RRSP: March 1, 2010, is the deadline for contributing to an RRSP for the 2009 tax year.
RDSP: December 31, 2009 is the deadline for contributing to the 2009 RDSP.
Home Buyer's Plan: You have to buy or build the qualifying home before October 1 of the year after the year of withdrawal.
Lifelong Learning Plan: The student must have received a written offer to enroll before March of the year after you withdraw funds from your RRSPs.

Each year millions of Canadians take advantage of the many tax-saving measures that put hard earned tax dollars back into their pockets. Make sure you claim all the credits and deductions that you are eligible for. Remember to file your return on time, and file it electronically so that it is processed faster. Also remember to keep all your receipts for at least seven years. To find out what you are eligible to claim, consult your tax professional.

by: Ahmed Abdallah,
Contributor; Immigrant Post

Ahmed is an Accountant / Tax Consultant of InterPlan Accounting. contact him at: 416.738.5056 or visit at: www.interplanfinancial.ca