Tax Tips: Six Important Tips in Correcting Errors on Tax Returns

Tax season may be over but you may have forgotten to claim a lucrative tax deduction or credit, like medical expenses, moving expenses or the disability amount.  First tip:  don’t file a new return; simply adjust your prior filed return.  But, what’s the deadline for making adjustments?

For most provisions it’s ten years; however, to optimize your pension income splitting, it’s only three years.  Here are three more anomalies:

• Claims for Capital Cost Allowance on a rental or business asset cannot be the basis for adjusting a tax return.
• Overpayments of EI premiums can be made for three years following the tax year.
• Overpayments of CPP premiums can be made for four years following the tax year.

My sixth tip for you today is about a really common omission: the medical amount.  It can really pay to hunt down medical expenses and claim them over the best 12-month period ending in the tax year. There are numerous out-of-pocket expenses that qualify, ranging from batteries for hearing aids to driveway alteration costs for disabled family members.

Millions of taxpayers miss claiming medical expenses every year for their spouse and other dependants. This includes the costs of getting medical care not available to a patient in the home community. You must travel at least 40 kilometres outside your home area; travel must be at least 80 kilometers to claim meals and lodging.

Keep a distance log and claim either your actual gas receipts or use a cents per kilometer method. Use 47 cents per kilometer in Manitoba; that compares to 55 cents for taxpayers in Ontario; and 44.5 cents in Alberta.

If these tax tips fascinate you, do consider joining us for our Spring Training Options.  This is a great time to take an online tax course, or attend the Distinguished Advisor Workshops being held later this month.  Even laypeople can attend and earn a certificate while learning to save money. . .just like a pro!

Evelyn Jacks is President of Knowledge Bureau, Canada’s leading educator in the tax and financial services, and author of 52 books on family tax preparation and planning.

©2016 Knowledge Bureau Inc. All Rights Reserved. Used with Permission.

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