$4638 Recaptured by Claiming Selling Costs of House

We recently helped a couple who moved from Nanaimo to Victoria in 2011 and rented the house out. In 2013 they sold the home after waiting for market conditions to improve a bit.

We advised these clients they should be claiming the selling costs as a Moving Expense and the adjustment request we submitted for them resulted in a reassessment and saved them $4638 of tax they otherwise would not have received.

Often moving expenses are not all incurred in the same year, and some of the costs eligible to be claimed are not as obvious as others, such as Realty Commissions, Legal Fees, and Land Transfer Tax. If they cannot be applied in the year that you moved, as there was no income earned in the new location yet (or you haven't found the job yet), then you can apply them in a future year.

The expenses must be reported on the tax return in the year they are incurred. So in this case there were expenses in 2011 and 2013 from the same move.

Keep in mind if you move again and haven't claimed them in the location of where you moved, they will be cancelled at that point.

Single Parents with Children Under 6 - The UCCB can be claimed on your child

One of the most frequently overlooked tax savings available to a Single Parent for the past few years is the ability to claim the UCCB Benefit ($100 per month for each child under 6) as the income of an eligible child rather than including it in their own income.

If the parent is claiming an Amount for an Eligible Dependant (claiming the Child for additional credits instead of a spouse), the UCCB income has to be used for that specific child and their credit reduced by the income.

If the parent is not claiming the Amount for Eligible Dependant, the income can be claimed as the income of the child for whom you are receiving the benefit instead.

The child does NOT need to a file a tax return to take advantage of this option.

Either way, taking advantage of this reduces the taxable income of the parent and in most cases results in some tax savings even if the Amount for Eligible Dependant is reduced. In some provinces it makes more difference than others because of the provincial tax calculations.

For example, with a single parent in BC with a taxable income of $60,000 it can mean a savings of an approximately $180.

To do this, instead of reporting the UCCB on line 117 of your tax return, report it on line 185.If you haven't been taking advantage of this, it's not too late. You can go back and adjust your tax returns for the last 10 years using form T1 Adj.

Feel free to contact us at service@painfreetaxes.ca or 1-844-EZ-TAXES for a free consultation about this or other potential missed credits.

Another $5000 Back in Our Clients Hands

Today we got confirmation of a combined $5000 that was put in the hands of some of our new clients by adjusting tax returns for them for 2011 and 2012 where credits were missed by other tax firms.

In one case, they paid an extremely low fee to have their taxes done but it cost them nearly $3,000 in lost refund due to missed credits and poor advice... and this also led to problems with Canada Revenue Agency that are still being worked out and being appealed.

In another case, they paid $300 for a couple to have their taxes prepared and items were missed, costing them $1,200 as well as incorrect advice about another credit they could have claimed.

We review prior year returns at no charge to look for any missed credits. We only charge for the work required to help you get back money you are entitled to.