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Keeping up with all the changes that come with every new taxation year can be difficult, especially if a client is in a complex situation such as being a caregiver or trying to determine the provisions between provincial and federal governments.

With more than three weeks to go before the tax-filing deadline, advisors have the opportunity to check in with such clients to make sure they’re on track to apply for the right claims or exemptions – depending on their situations.

Evelyn Jacks, tax expert and president of the Knowledge Bureau Inc., spoke with Globe Advisor editor Pablo Fuchs about the key tax changes for educators, students and those with disabilities.

What changes to tax credits should taxpayers be aware of this season?

If you’re an eligible educator, certified teacher, or a child care educator, then we have an educator tax credit and it has increased to 25 per cent from 15 per cent of $1,000. That’s $250 in real terms on the federal government’s side. Now, we have one in Manitoba, and it’s sort of an equivalent or a mirrored amount as it’s at 15 per cent. [But] federal and provincial taxes don’t necessarily mirror each other with all of the provisions, [which is] another thing for people to keep in mind.

We have had some changes to the disability tax credit as well. That’s a very lucrative credit. If you’re taking care of someone who has dementia, Alzheimer’s, or some kind of emotional behavioral [impairment] … that markedly restricts their daily living activities, then you will be able to perhaps qualify this year if you have the right form you’re filing… which is T2201. You have to get it over to your doctor.

Can you explain the changes affecting registered retirement savings plan (RRSP) contribution room?

First of all, you have to look to your [clients’] notice of assessment to make sure they understand what their contribution room is. Second, the government is starting to play with that contribution room with other provisions.

For example, currently, we have a new change that if you have a postdoctoral student and they had earnings granted to them to do those studies, the government is now going to allow you to go back to 2001 – over a 10-year period – to create unused RRSP contribution room. That’s fantastic news, but [eligible clients] have to apply for that by 2026. So, a professor or someone who is working on postdoctoral studies at this time, that’s really good news for them.

Likewise, we have another provision whereby people who have contributed to a defined-contribution [pension] plan are going to be able to correct over or under contributions to those plans with the result that their pension adjustment could change. That could result in a negative RRSP contribution room in some cases. So, we want to watch for that because it’s going to become a new [financial] planning scenario.

This interview has been edited and condensed. The entire interview can be viewed here.

- Globe Advisor Staff

Must-reads from Globe Advisor this week

Leveraging life insurance for loans grows in popularity

Permanent life insurance is no longer just about providing security and cash for beneficiaries after death. It can be used as a strategic wealth generation product for clients looking for low interest loans through an immediate financing arrangement (IFA). An IFA leverages the universal or whole life policy so clients can use it as collateral to obtain a loan. Renee Sylvestre-Williams looks at why this strategy is best suited for high-net-worth clients who may be business owners.

The tax perks of being a couple

Sharing a range of benefits such as splitting income, tax credits and using spousal RRSPs and loans are just some ways couples can reap the rewards of being together when filing taxes. The various deductions, allowances, and incentive programs vary so widely that many might not be aware of them all. Jameson Berkow reports on what strategies work best for couples to get a tax-efficient return.

Pent-up demand drives travel despite headwinds

Rising inflation and fuel prices combined with the pressures from the Ukraine-Russia war aren’t putting a damper on travel plans if March Break was an indicator of demand. Two years of pandemic restrictions have travellers keen to make up for lost time. Adam Mayers looks at which areas of the travel sector are best positioned in the short and long run and why experts believe the demand is intact.

How to manage debt as interest rates set to surge

The stage is set for the cost of servicing certain types of debt to rise significantly this year as the Bank of Canada plans to raise interest rates aggressively. Experts say cash flow will be a key concern for clients as more money goes toward paying down debt. Helen Burnett-Nichols reports on strategies to manage this effectively while staying on track with long-term financial plans.

Also see:

How to make the most of filing taxes as a single person

Advisors want ‘ownership’ to drive better outcomes for clients, says wealth manager

Investors seeking inflation hedge snap up U.S. farmland

Why some of the most feared activist investors are no longer so hostile

How advisors are managing clients with limited time and resources

What you and your clients need to know

What you need to know about housing from federal budget

Measures aimed at taming home prices were centre stage in the Trudeau government’s latest budget. It promises $10-billion to make housing more affordable. Erica Alini gives details on the Multigenerational Home Renovation Tax Credit, the Tax-Free First Home Savings Account and doubling of the First-Time Home Buyers’ Tax Credit and more.

Why employers are reluctant to formalize hybrid and remote work arrangements

One of the biggest sticking points for candidates looking for white-collar jobs over the past six months is that they do not want to go back to the office full time, according to a boutique recruitment firm. But employers are hesitant to formalize hybrid or remote work arrangements in offer letters or employment contracts. Vanmala Subramaniam digs deeper on what’s holding employers and employees back.

Why this well-known investor is getting out of bonds

Bond total returns have been negative for months and with interest rate hikes coming, they will certainly get worse, according to Gordon Pape. He sees more pain ahead and explains why this is the worst bear bond market we’ve seen in many years. Here’s more on why he’s moving fixed income money into one-year guaranteed investment certificates.

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