As you grow older, you get to enjoy a wide range of tax benefits. Partnering with a CPA can help you identify all the opportunities to enjoy tax benefits that are often not available to the younger taxpayers. The reason why the Canadian government provides seniors with tax credits is to ensure that they are able to save more on their taxes and have as much money on their hands for retirement. Many seniors don’t have the luxury to work and earn as the younger taxpayers. Making sure they are able to save on their taxes is important because they need the income to go through life after retirement. Let’s look at some credits and benefits that are available for seniors in Canada.
Age amount: This is a tax benefit that seniors who are 65 years of age or older can claim when filing their taxes. The age amount that you are able to claim will depend on your income. You must have a net income of not more than $82,353. You can only claim up to $7,033.
Pension income amount: Most people stop working when they get older which means their income is derived from other sources such as a pension plan. You may have taken a private pension plan or the Canadian pension plan which is considered as a source of income when you get older. In this case, you may claim up to $2,000 in tax credit if you have an eligible pension income.
Medical expenses: You can claim taxes on any medical expenses paid for you or your spouse/common-law partner or your children born in 1998 or later. The medical costs can be any amount that was spent on attendant care, bathroom aids, prescription medication costs and even devices that you’ve had to acquire in order to support a disability.
Disability amount: You may also be eligible for a disability tax credit. This happens if you or a dependent has a severe or prolonged impairment that interferes with their physical or mental function. There are certain conditions that you must meet in order to be eligible for this tax credit. You must complete the disability tax credit certificate form and take it to your medical practitioner to be signed. You can file online when claiming the disability tax credit for seniors in Canada.
GST/HST credit: For seniors with a modest income, you may be eligible for the GST/HST credit. For you to be eligible for this credit, you need to file your income tax returns including for those years that you did not receive any income. Remember that this credit is only available for one spouse or common-law partner so both of you cannot claim HST/GST. The credit will only be paid to the person who made the claim first and the amount is usually the same regardless of the person who gets it.
Public transit amount: Seniors are also entitled to claim the expenses they’ve incurred on certain public transit passes for travel anywhere in Canada.