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NB Telegraph-Journal ~ The Bottom Line ~ Three Common Mistakes ~ April 17, 2006 - 16 Apr 2006 by TaxHelp

I hope your holiday weekend was as happy an experience as mine was. By some lucky convergence my anniversary and Easter fell on the same weekend as it did 27 years ago, when Betty and I celebrated our first. While Rob is still off at school doing exams, Jenn made it home last week, in time to go to work as we move toward the crush of tax filing that accompanies the approach of the deadline.

While many Canadians have been able to file since the end of February, and most of us have had everything we need to take on the task for a couple of weeks now – apparently we’re lacking the motivation. Hopefully, a couple of days of over-eating will spur on the call-to-action.

Last year to the middle of May, there were some 475,000 returns filed here in the province. As of last Monday, there was a relatively puny 225,000 returns assessed, leaving more than half to still be submitted. And in keeping with our technological advances, almost 200,000 of those were filed through some electronic medium like a phone or computer, rather than using the old-fashioned Canada Post approach.

Anyway, with Rob away, Jenn invited one of her girlfriends over for dinner. You see, she hasn’t had much time to take in the evening social life that the city offers and her school chum Melissa thought they could visit the hotspots after catching up on their respective weeks. I know Jenn’s boss had her working in the office – efiling returns, doing data entry and learning how to read a trucker’s log book. Coincidentally, Melissa works for a large multinational accounting firm in the city centre, and so she’s been immersed in the tax world as of late as well.

After dinner the girls visited until the appropriately appointed hour to head out for the evening. I volunteered to give the girls a lift from the Valley to the Uptown. While we were waiting for Betty to join us in the car, as she usually keeps me company, I asked Melissa about work. In unison, and as practiced as any church choir, they together responded “Work?!?!?!?” While not wanting to ruin the mood of the upcoming evening, I casually asked Melissa her thoughts on how she enjoyed the business.

Of course she was happy to tell me about her experiences, and good for her. Knowing that by Sunday afternoon I’d be putting today’s column together, I asked her if there were any errors or omissions that she noticed that people continue to make, and that she thought would be good to point out.

Melissa pointed out three that we often see, not surprisingly in the area of deductions and credits that taxpayers can elect to make. The first deals with Registered Retirement Savings Plans (RRSPs). In Canada we have both the calendar year and the first sixty days of the following year to make contributions to our RRSPs that can be claimed on a single tax return. In addition to that, some people make contributions that they are allowed to deduct, and do not claim for various reasons. Additionally, some people over-contribute to their RRSPs (which they are entitled to do up to a maximum of $2,000 over their officially stated limit). Occasionally, people lose track of these things, and so it’s not unusual to see potential additional refunds going unclaimed or to see over-contribution penalties being applied. As a reminder, you are allowed to put in only the limit as stated on your prior year’s Notice of Assessment plus $2,000, if you want to avoid the fine.

The second area we talked about was child care. Everyone who pays for daycare or a babysitter and who has employment income can claim these expenses. For couples it is the lower income spouse who files the deduction (although there are exceptions). Finally, whether your child is sitting on the floor in someone’s family room watching TV or sitting on the ice listening to a hockey coach, a deduction is a deduction. Day and overnight camps (subject to limits) both qualify for the claim. However, on-going seasonal registrations like soccer or piano do not.

The last item she pointed out was in the area of medical expenses. Most people have come to understand that they may claim the premiums they pay for their health care as a credit as well as the deductible and co-insurance portions of their care and prescriptions. However, for many the travel for treatment is still not recognized. If you travel over 40 kilometres to seek medical care you may claim an amount equal to the return trip distance based on 45.5 cents per kilometre and for those traveling over 80 kilometres one way they may also include $15 for a meal without a receipt (plus an equal meal amount if they require a traveling companion).

Anyway, the ride to town with the girls proved uneventful. I don’t know who the old guy is in the photo accompanying this column but I still think of myself as young and in-my-prime. So I can tell you, I was somewhat disappointed when we stopped by a banking machine on King Street. As Melissa was returning to the car, a few young guys strolled by. “Imagine that” one of the dudes said, “those two girls have to go out with their parents on Friday night!”

Roger Haineault is with Help 4 Taxes. He can be reached with specific questions or suggestions by calling 506-693-1212 or by e-mailing him at roger@help4taxes.ca. His column appears Mondays.