taxdetective-Sandusky-Register

So who thinks they can persuade their doctor to certify in writing the infirmity for one or more of your dependent relatives?  Who might that be?  Any one of these five categories of dependent for whom you currently claim a personal tax credit on your tax return:
Your Spouse
Your Child (multiple)
Your Eligible Dependent (can't double dip here with child though)
Someone who you claim as Infirm over 18
Someone you claim under the Caregiver Amount

For an explanation of these credits, see RC4064 or the TD1 federal, (you'll have to wait for 2012 form in mid December) which should provides amounts and limits.

Each of these credits will get a $2,000 federal tax credit boost, worth $300 per dependent for 2012, that is, if you can persuade a qualified medical practitioner to certify infirmity.

If you can certify this early in 2012, watch the TD1 form, as you may be able to pay less tax at source, and have the $300 during the year, instead of having to wait until April 2013 for this amount.

Of course Wall Street gets it, they'll even tell you, it's right in this article. It's our tax code and the choices we make about how we arrange our affairs to cope with those rules.  Our tax system is not only so complex, it's designed to shape our choices. The people who draw up the rules will even tell you that's what they are doing. 

Why do you think we in Canada were introduced to a new tax credit this year called the Family Caregiver Amount?  It's designed to bolster up the perception that we're going to care for our family at home. This credit is designed to make sure we're making looking after family members a priority as are most of the other tax credits, designed to guide us because they know something we may not have figured out.  The message is that we can't afford to keep all those boomers in care facilities.  There aren't enough beds.

If I'd known as a teen what I know today about tax, I probably would have made completely different choices about how I arranged my life.

Our education system, at least here in BC, not sure about the rest of Canada, but ours doesn't provide teens with the opportunity to learn about tax.  Not saying that what they learn in school isn't valuable, but it sure isn't practical in terms of life skills if it doesn't include a healthy dose of how tax is going to affect the rest of your teens life.  Remember, tax free day isn't until when? June or something?  A huge chunk of what we earn goes to taxes.  Doesn't that deserve airtime?

We don't shares with teens how to complete a TD1 and why, so they can ask their employers to reduce the tax taken at source when they first start to work.

I doubt we talk about the long term dangers of the underground economy and how the choice to work for cash can influence a person's ability to ever even get a mortgage to own a home. Just ask any banker, and they'll tell you sad stories about people who only report $30,000 as income and now want a mortgage. The banks want nothing to do with them.

Why? Qualifying for a home in Vancouver, not on $30,000 income, unless there is a stash of cash for a huge down payment.  And the potential of questions by CRA...where did the money come from for you to afford that address?  Think they aren't watching? Hah.  CRA has a program that compares addresses and last names for who lives with who to find rental suites. It's only a short step from there.

Why do only commerce students and accounting students study tax?  Tax influences how all of us make choices, the least we should do is to expose our teens to how the system works, let them use their imaginations to find ways to use the system to their advantage.  After all, if you want to give them a leg up, studying tax code, that's what the folks on Wall Street did.

This announcement precedes more technical documentation to follow. 

It will be interesting to see if this is something I'd pursue given my age and income and aversion to risk.

Does the title make you want to buy the book?

Please tell me what you think. eileen@taxdetective.ca

My book is going to be published soon, and we need a short, sexy, two or three word at most, title:

Does this make you want to buy?

Intimate Details

Your Guide to Taking Control of Personal Finances

If spouses are involuntarily separated as one is in a care home for example, reversing spousal CPP split to the spouse in the care home when that was advantageous could increase the GIS by about $200 a month. 

Watch to make sure that not splitting the CPP doesn't increase the tax beyond what you'd expect, about 10%, in my example, their tax went up $500, in exchange for $4,800 of GIS...and definitely watch out for the potential for OAS repayment on line 422 of your tax return. 

If you want to try out your numbers, use TurboTax Online for free, just use SIN # 000000000 to run a trial return for both spouses for free.  You don't pay unless you file.

Take out your OAS before using this calculator (click above on the title to access the calculator and calculate for single instead of married if involuntarily separated)

Also complete
SC ISP-1811 Statutory Declaration - Separation of Spouses/Partners
NCC001 Statement for OAS and CPP Involuntary Separation
Applications for GIS for prior years
3025 (2009)
3026 (2010)

You can call for forms, 1-800-277-9914 or find the forms online and some are even fill-able online to print and send, saves on handwriting the information.

Click on Home page, select Forms from other on the right side,
then find the Forms page link to search for forms.
If you just search on the main website, none of the forms come up.

Alternatively: Click here for the direct link to the Service Canada Forms and type those form numbers in the search box.

Not only that, but if you hire a caregiver, or have a home office, those could void it too! That is, if you haven't put a rider about non family living in your home, or business use of your home...

Thanks John, for the great administrative reminder...

Work sharing initiative with EI topping up employees who work a reduced work week, interesting idea... extended to October 2012