Should I file a tax return?

Should everyone file a tax return? Even your teenage children can benefit from filing a tax return.

Some of the benefits include tuition transfers. You can transfer education and tuition credits if your older child was enrolled in a post-secondary program. You cannot get this credits for transfer unless that child has filed a tax return.

This could mean as much as $5,000 worth of tuition credits can be transferred from the student to the parent. A parent will then get up to $1,300 in tax savings. This is done by the student signing over the T2202A slip in favour of the parent. As well a Schedule 11 must be completed and the provincial form done to show the amount of credit that will be transferred. A nice way to get back some of that money you have put out!

Another reason a teenager might want to file a tax return is to get back any taxes that were overpaid. If you work then an employer will automatically take Canada Pension plan contributions and income tax from your pay check. You cannot get this back unless you file a tax return.

Do children need to be concerned about RRSPs? Why not? For every $100 of wages that your child reports as income it opens up $18 of RRSP contribution room. If a child reports income of under $10,320 they do not have to pay any tax. So the babysitting, yard work or delivery newspaper earnings can all be reported and start building RRSP contributions.

Having RRSPs set up is not only useful for future retirement. When you go to buy a house you can use RRSP funds and do not have to pay immediate taxes under the Home Buyer's Plan.

Another credit that you might want to take advantage of is the child fitness credit. This is available if you have a child under 16 that was registered to take part in a physical activity program in 2009. If it was soccer, gymnastics, or a dance program then you can save up to $75. Look for this credit on your federal Schedule 1.

An Angus Reid Public Opinion poll determined that only 8% of employees said they will claim the employment tax credit for 2009. This will save most employees $156. So why do people not claim everything they can?

How do you get to work? If you buy an annual or even a monthly public transit pass then you can get backup to 15% of this by claiming on the cost of your passes on your tax return and for the passes of your dependent children under 19.

Most people are aware of the home renovation tax credit made available last year. You had to spend over $1,000 on your home or vacation home. The tax credit is up to 15% of your home renovation expenses up tot a maximum of $1,350. The deadline on the work is after January 27, 2009 and before February 2010. This is the only time period for this tax credit, it was not extended into 2010.

Did you buy a new home in 2009? If so, and if it was after January 27th then you can get a tax credit worth $750. You must not have any any other dwelling after 2004 unles the dwelling you bought was more accessible for a disable dependent then the home you owned before.

Do you have a child under the age of 19 with a disability? An intellectual or physical disability can be recorded on a child's T2201 form. Once the disability credit application has been approved the tax credit can be transferred to a parent's tax return.

If you have a child in your household who is 19 or older and who is not making great wages you should complete Schedule 6. This is even if the child is not a student. That same child could have dental and other medical expenses that could be refundable.

It is your job to find out about all the possible income tax benefits available to you. You might want to ready the General Income Tax and Benefit Guide or check out the website here. Talk to your accountant if you think that you have a benefit that has not been declared. There is not a software program out there that will give you all the possible credits unless you ask for them.

You can go backwards. You can go back to the Canada Revenue Agency on prior years taxes and ask for credits that you should have received. You will get refunds and the interest for those years that were not correctly reported.