If you find yourself staring at a blank tax return form and a shoebox full of crumpled receipts, it might be time to get your act together. But try not to panic.
"When time is not on your side, you are in a rush," says Cleo Hamel, a senior tax analyst with H&R Block Canada. "If you owe money and don't pay on time, the panic is that you will have to pay a penalty."
Ms. Hamel joined H&R Block in January, 2000, as a tax associate and was a tax course instructor, an assistant district manager and district manager before taking her current position in 2006. Prior to joining H&R Block, she was an independent financial adviser, with a broker's license, in the Calgary area.
Ms. Hamel joined us live to answer your questions about income tax filing. A transcript of the discussion follows:
11:54 Dianne Nice - Hi, thanks for joining us for our tax discussion with Cleo Hamel, senior tax analyst at H&R Block in Calgary. We'll start in a few minutes, but you can begin submitting your questions now.
12:06 [Comment From Cleo Hamel]
Always a pleasure to provide tax information to your viewers.
12:06 [Comment From Sidd]
Is there an exhaustive list of questions or points Ontario Residents should consider to ensure they have covered all deductions or maximize tax refunds?
12:08 [Comment From Cleo Hamel]
Sidd - Unfortunately, there is no list. You have to do the leg work yourself by researching and talking to tax professionals.
12:08 [Comment From Bob]
I have been paying medical expenses for my mother(she is not a dependent) Can I claim these?
12:10 [Comment From Cleo Hamel]
Bob - If you mother is not a dependent, you would not be able to claim medical expenses you paid for her. She has to be to depend on you for support to make the claim.
12:10 [Comment From Gina]
Hi, I have a question about the medical expenses. I have a skin condition for which my GP sent me to a dermatologist. The solutions she proposed didn't work, so I chose to do Intense Laser therapy on my skin, which is not a medical treatment covered by OHIP. Can I claim this laser treatment as a medical expense on my taxes? This treatment was not prescribed per say by my doctor, but it is to treat a skin condition for which the GP referred me to a specialist. Thanks!
12:12 [Comment From Cleo Hamel]
Gina - Whether or not you can claim the laser therapy is not based on if it is covered by OHIP, but rather if the laser therapy treatment was preformed by a medical practioner.
12:12 [Comment From Guest]
Are my rent payments deductible?
12:13 [Comment From Cleo Hamel]
Guest - Credits for personal rent paid can only be claimed in Manitoba or Ontario.
12:14 [Comment From AP]
Can i deduct some home office expenses if i've been planning for a business throughout the year? it hasnt got off ground yet (i.e. no revenues), but hopefully will in 2011
12:14 [Comment From Cleo Hamel]
AP - If your business operations have not commenced, yet, you are not able to claim expenses.
12:14 [Comment From Ray]
Are the interest fees I pay on money I have borrowed to invest tax deductable?
12:16 [Comment From Cleo Hamel]
Ray - Interest paid on money borrowed to earn investment income is deductible unless it is in a registered plan, such as an RRSP, TFSA, and therefore cannot be deducted.
12:16 [Comment From Al]
Hi. I used to live with my elderly parents and claimed the caregiver amount in previous years. However, both my parents and I have moved to two different places in July last year. Can I still claim the caregiver amount for 2010? Thanks.
12:19 [Comment From Cleo Hamel]
Al - Yes, you can still make a claim for 2010, since you lived together at some time in the year. In future years, you will not be able to unless you start living together again.
12:19 [Comment From Jignesh]
Hi I am Jignesh. I am a Foreign Trained Professional and got my Credentials assessed with CGA Ontario. I paid $350 to get it assessed. Can I claim Tax Credits for this payment .
12:21 [Comment From Cleo Hamel]
Jignesh - Unfortunately, professional accreditation fees cannot be currently claimed.
12:21 [Comment From claudette]
Is there a credit for replacing a roof last May?
12:23 [Comment From Cleo Hamel]
Claudette - The Home Renovation Tax Credit expired January 31, 2010. If you had the work done after this date it does not qualify.
12:23 [Comment From Justin]
I took the CFA and CSC exams in 2010. Are the tuition fees deductible? I also took a prep course for the CFA exam. Is that fee deductible?
12:25 [Comment From Cleo Hamel]
Justin - If the exam fee is included as part of the course, it can be claimed as a tuition. But if it is assessed separately, you cannot claim it.
12:25 [Comment From Brumby]
If you claimed RRSP deductions and did not have the room and that has been rolling over for the last few years, what is the approach to correct this error? Thank you Ms. Hamel for taking the time to provide insight on which direction to take when encountering a tax problem.
12:29 [Comment From Cleo Hamel]
Brumby - You are able to be over-contributed by $2,000. If you are over this amount and the over-contribution is such that you will never have RRSP room to claim the deduction, you should withdraw the excess as soon as possible. This will limit any futher penalty tax. If you make this withdrawl within two years of the contribution, you can claim an offsetting deduction.
12:29 [Comment From Chuck]
For the child care credit - is it by child or family ?
12:31 [Comment From Cleo Hamel]
Chuck - I'm not sure which child care item you are talking about, but childcare expenses are based on the amount you pay to a maximum amount per child.
12:31 [Comment From Angela]
My questions are: Are real estate agents considered self employed independent contractors earning business income, or commission employees earning commission income from their employer? Also if they are considered independent contractors if they have a loss in a year can this loss be claimed against other income? If they are considered employees earning commission income and their expenses are greater than their commissions in a year can they claim these additional expenses in the next year or are these expense write offs lost? Once more thing, can real estate agents claim the 20% of their commission paid to their brokerage as a business expense? I am a new agent trying to do taxes for the first time. Thanks!
12:34 [Comment From Cleo Hamel]
Angela - Whether you are self-employed or a commissioned employee depends on the contractual arrangement you have with the realty company.
12:34 [Comment From Guest]
I have a condo that I rent out. Aside from condo fees, property tax and insurance, are there any other expenses I can claim?
12:35 [Comment From Cleo Hamel]
Angela - As a commissioned employee your expenses are limited to the amount of your commission. As self employed, business losses can be claimed against other income.
12:35 [Comment From Jim]
A small business submits returns on time but cannot pay full income tax due. Instead pays over time with monthly payments including CRA interest. Is the CRA interest deductible as a business expense?
12:36 [Comment From Cleo Hamel]
Guest - You can claim any maintenance and utilities not covered by the condo fees.
12:36 [Comment From Jen]
What are some of the best - but little known - expenses that self-employed Canadians can claim?
12:38 [Comment From Cleo Hamel]
Jim - You cannot deduct penalties incurred but we do not see any reason why you cannot claim the interest charge.
12:42 [Comment From Cleo Hamel]
Jen - Unless your expenses are specifically prohibited, you can claim all expenses incurred to earn income. Keep track of all your spending.
12:42 [Comment From John]
I am a professional with a professional corporation. I sometimes have meal and entertainment expenses which can get pretty expensive. Is there an amount of meal and entertainment expenses that raises a red flag at the CRA for an audit?
12:44 [Comment From Cleo Hamel]
John - The CRA probably has a set amount however, for obvious reasons they don't make it public.
12:44 [Comment From Edith]
I am renting out a couple of rooms in my principal residence to students to help cover the mortgage. We are not claiming any capital costs whatsoever. From what I have read, some capital costs can be argued as current costs and vice versa. For example, if I replace a broken dishwasher as I had to do this year, I can claim this as a current cost. But I am not sure. Please also comment on claiming small appliances such as kettles and lamps as current costs since they may not last more than a year anyway.
12:51 [Comment From Cleo Hamel]
Edith - The new dishwasher and furniture are capital items and are depreciated in Class 8, with other major appliances. at a rate of 20%. China, cutlery and linen (under $500) can be depreciated at 100%, in class 12.
12:51 [Comment From Brumby]
I just recently found out that my Mother-in-law's final tax filing was never completed and sent in to CRA. She died in Dec 1996. Any particular approach I should take in filing this now?
12:53 [Comment From Cleo Hamel]
Brumby - To put your mind at ease and get this corrected, you could submit this return under the Voluntary Disclosure program.
12:53 [Comment From SYLVIA]
I withdrew 6500$ from my rrsp to fund my education in 2009. I am currently still in school. I was thinking to put the entire amount as an additional income for this year tax return. FYI my 2010 income is low (approx 13,000). Do you think this is a good idea instead of paying it back for 10 years. I am pretty much in difficult financial situation and unable to repay the RRSP, which is due as of this year.
12:56 [Comment From Cleo Hamel]
Sylvia - The repayment of the Life Long Learning plan can be done in one year, however if you are not paying the money back to your RRSP, you can not include the full amount in income in one year. You have to do it over 10 years.
12:56 [Comment From Guest]
If a couple separated in 2009 and did not change the status on their 2009 return should they complete a T1 Adjustment for 2009 or just change their status for 2010?
12:57 [Comment From Cleo Hamel]
Guest - You should file a T1 Adjustment to correct your marital status for 2009.
12:57 [Comment From Guest]
My father is in a nursing home. Additionally he has a private care giver who attends him daily. Is it possible to deduct both costs? Does the limit of $14 k apply to the total of the two expenses?
1:00 [Comment From Cleo Hamel]
Guest - You can claim the cost of the nursing home and the private care giver, if your father is not claiming the Disability credit. If he is claiming the Disablity amount then there are limitations to claiming these expenses.
1:01 [Comment From Christina]
We have contributed two years of RESP for our daughter in a group plan and we are now thinking of withdrawing from the plan. If we withdraw, about $5000 "membership fees" would be lost. Are we able to claim these $5000 as investment expenses on our tax returns? Thank you.
1:02 [Comment From Cleo Hamel]
Christina - Unfortunately, you are not able to claim expenses relating to registered plans, on your tax return.
1:02 [Comment From Michael]
If my business was running but i now don't have revenues, can i still claim expenses?
1:03 [Comment From Cleo Hamel]
Michael - If this is an ongong business and you temporarily do not have income, you can continue to claim expenses. However, if you have ceased business operations, you cannot.
1:04 Dianne Nice - Unfortunately, that's all the time we have for questions today. If your question did not get answered, join us again on Monday at noon (ET) for a live tax chat with Evelyn Jacks.
1:04 Dianne Nice - Cleo, thanks so much for your time. Is there anything you'd like to add?
1:05 [Comment From Cleo Hamel]
Thanks Dianne, Remember we have until May 2, 2011 to file our tax returns, try to get it done before then.
1:06 Dianne Nice - I'll try! On behalf of Globe and Mail readers, thanks for your great advice today.