Improve Your Returns:  Life Changes That Affect Tax Filing

The April 30 tax filing deadline is fast approaching. If you experienced any major life changes in 2017, make sure these are reflected in your returns, as they could impact the size of your refund or subject you to an audit. Read on to learn what these events are, and how you should handle them – before it’s too late!

Marital Status. CRA has very clear rules on what constitutes a couple when filing your tax return. You are considered common-law in the following circumstances:

• If you live together continuously for 12 months or more (separations of less than 90 days don’t count)
• If you have a child together (by birth or adoption), you are considered common-law as soon as you move in together
• If you have custody and control over your child and he or she is wholly dependent on your partner for support

If you meet any one of these criteria, you must inform CRA when you become common-law, with a RC65 Marital Status Change form.

Whether you are common-law or married, you can pool receipts such as medical expenses, charitable donations and public transit passes to maximize your credits and pay less tax.

It is also important to know that you can be required to repay any benefits you received because you reported your marital status incorrectly. Government benefits are based on your household income.

Moving Expenses. If you moved to a new home for work or to run a business at a new location, or you moved to be a student in full-time attendance in a post-secondary program, you may be eligible to claim moving expenses.

To qualify you must have moved at least 40 kilometres closer to your new work or school. Some of the moving expenses that you can claim are:

• Transportation and storage costs for household items, including boats and trailers
• Travel expenses, including vehicle expenses, meals and accommodation to move you and your household members and your belongings to your new home
• Temporary living expenses up to a maximum of 15 days
• Cost of cancelling the lease for your old home
• Incidental costs related to your move, such as changing your address on legal documents (but not with Canada Post), replacing driver’s licenses and utility disconnections and hook-ups
• Cost to maintain your old home when vacant, up to a maximum of $5,000
• Cost of selling your old home or buying your new home (if you sold your old home because of the move)

Some of the costs that cannot be claimed are repairs to make your home saleable, travel expenses for house hunting trips, expenses to clean or repair a rented house and mortgage default insurance.

Additional Educational Resources: Essential Tax Facts, by Evelyn Jacks, can help guide you through the rest of 2017’s tax season in addressing tax issues like these – especially if you are a late filer. More importantly, this is the first book on the market that reflects tax provisions for your 2018 filings. Get your copy today to help you prepare audit-proof returns and claim everything you’re entitled to, this year and next. Knowledge Bureau’s Introduction to Personal Tax Preparation certificate course is another great resource if you typically prepare your own returns, or do so for family and friends.

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