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Episode 5: Tax Updates & Tips to Maximize your Refund This Year - YouTube
Channel: The Independent Dollar
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Hi everyone and welcome back to the channel.
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In Episode 5 of our Tax Tips & Investing Series
we鈥檙e going to run through some important
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tax tips to get a better refund, lower your
taxes owing and avoid penalties when you file
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your taxes this year.
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For any of the topics we cover today, any
relating information, forms or websites will
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be linked in the description of this video.
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Before we dive in today, there is a way to
get your taxes prepared for you for free.
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Every year Canada Revenue Agency coordinates
community tax clinics where you can work with
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a volunteer who will file your taxes for you.
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So, if you鈥檙e a senior, a student, a newcomer,
whatever the case may be, and your tax situation
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is relatively simple, we just want you to
be aware that this free service available
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to you.
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Now let鈥檚 get started on some tips and updates
for this year.
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First up and probably the most impactful is
real estate.
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Over the course of the last few years, many
Canadian bought or sold property during COVID
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as employment requirement changed.
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Did you know though that you鈥檙e required
to notify CRA when you sell your home?
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In fact, If you don鈥檛 and CRA finds out,
they can then charge you capital gains tax
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on your primary residence, which is usually
tax free.
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This came into affect in 2016, which means
if you sold your primary residence at any
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time during that year or later, you need to
have filed the appropriate forms with your
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tax return.
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If you don鈥檛 do this, not only can the sale
be considered a capital gain and become taxable,
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but there are also additional penalties that
also go along with that.
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Next up are changes the Climate Action Incentive.
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If you鈥檙e not familiar with this credit,
the idea behind it is to refund taxpayers
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some of the pollution pricing the government
charges over the course of the year.
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This credit is for individuals residing in
either Alberta, Saskatchewan, Manitoba, or
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Ontario.
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You also need to meet the following criteria
to be eligible for it
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The amounts haven鈥檛 been confirmed quite
yet, but this is how much you would get in
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each province last year.
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In previous years, this was something you
got with your tax return.
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So, if you were entitling refund, you would
receive this in 2 weeks time after you filed,
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or if you owed taxes, it would lower your
taxes owing.
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This year is different though.
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This credit will instead be paid in installments
through the benefit system, similar to how
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the GST credit works, which means you won鈥檛
be getting it up front when you file your
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taxes anymore.
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Instead, the first quarterly payment will
be paid out in July this year.
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One tip to keep in mind if you live in a rural
area, you may qualify for more than what the
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normal credit is, but there鈥檚 a catch.
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CRA will not pay you the bigger credit based
on your address alone, you actually need to
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request it when you file your tax return.
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If you鈥檙e not sure whether or not you qualify
for the larger amount, you can go on to CRA鈥檚
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website as you can see here and a map will
pop up.
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You can then search for your municipality.
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If you鈥檙e located in the area that is shaded.
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You don鈥檛 qualify.
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If you鈥檙e outside of that area, you do.
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Next up are increases to the Canada Child
Benefit
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In Canada, the Government has financial programs
to help support families raising children
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and the monthly payments you can get will
be going up again this year.
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The amount you can receive is based on the
age of your children, how many you have and
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your family income.
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Here is the maximum amount you can qualify
per month, for each child you have.
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Next up, let鈥檚 take a look at RRSPs and
TFSAs
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The RRSP limit for the 2021 tax year is $27,830.
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This applies to the deposits you made from
Mar 1, 2021 up to an including Mar 1 of this
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year.
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For the 2022 tax year, the RRSP limit is $29,210.
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This new limit will apply to the deposits
you make between March 2nd of this year up
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to and including March 1st 2023.
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Keep in mind RRSP limits are impacted by a
few things, how much you earn and any unused
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deduction room or contribution from previous
years and whether or not you pay into a pension,
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and these are just some of the various things
that can make each of our personal limits
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different.
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You will want to refer to your NOA or your
online CRA account to confirm your personal
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limit.
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This is especially important for those that
are new to Canada or any individual starting
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their very first job this year.
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Since your limit is based on what you made
in the previous year, you likely don鈥檛 have
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any RRSP room yet.
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So be especially cautious if your employer
has a matching RRSP program.
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You may end up signing up for an RRSP account
through work when you don鈥檛 have available
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room.
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For the Tax-Free Savings Account, new contribution
room remains the same at $6,000 this year.
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Keep in mind, just like the RRSP limit, your
personal limit could be different.
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It changes based on your own deposits, withdrawals
and for some of you, your age.
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We get a lot questions about TFSA limits so
we鈥檒l be posting another video shortly to
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walk through some examples of how they work.
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Now lets get into some credits you may not
know you can apply for this year to boost
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your return.
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First up is donation.
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Donating to a registered charity can not only
impact the lives of those in need and help
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fund a cause you believe in, but you can also
get credit for that donation on your taxes.
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Keep in mind, Not all donation are eligible,
especially if you鈥檙e donating to organizations
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outside of Canada.
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Unless it is a registered charity, those donations
are not tax deductible.
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If you want to know whether or not you鈥檙e
donating to a charity that eligible for a
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tax credit, verify whether or not it is registered
with Canada revenue agency.
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Political Contributions.
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If you made a contribution to a registered
federal or provincial political party, candidate
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or electoral district riding association,
you can claim credit for this on your tax
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return.
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For some, that can be a tax credit worth over
$600.
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Next up is a tax credit for teachers.
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If you were employed as teacher or early childhood
educator last year, You can claim up to $1,000
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of teaching supplies on your tax return this
year.
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Here are examples of some of the items you
can claim.
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On a $1,000 claim, that will equate to $250
in tax savings.
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Now let鈥檚 talk a bit about some health & medical
expenses you may not know you can claim.
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First up is Gluten free foods
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If you have diagnosed celiac disease, you
can claim the incremental cost associated
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with having to buy gluten-free food.
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So, if for example it normally costs $4.00
to buy a loaf of bread and a comparable gluten
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free bread is $6.50, the difference in price
can be claimed on your tax return.
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You need to follow these guidelines in order
to qualify for this medical expense and make
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sure you hang on to your receipts in case
CRA asks for them.
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COVID-19 Tests.
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If you were required to take a COVID-19 test
this past year, like for those that had to
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travel, these can now be claimed on your tax
return.
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There are a few guidelines to follow but for
many, this will be a welcomed tax credit on
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your return this.
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Certificate Fees
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If you paid a fee for a medical practitioner,
like your doctor, to complete or provide information
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for a certificate, these can be claimed on
your tax return as a medical expense.
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Like everything else, just make sure you hang
on to your receipt from the medical office
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in case CRA asks for it.
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And lastly Wigs
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If you purchased a wig because of hair loss,
with a prescription you can claim this on
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your tax return.
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There are some requirements to follow and
again, make sure you keep a copy of your receipt.
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Hopefully you found this video helpful, we
will be releasing more tax related videos
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for credits and benefits related to specific
provinces so stay tuned for those.
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Thanks so much fore watching, and we will
see you next time.
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